Land Bank Loans for Undeveloped Land

Undeveloped land rarely generates income, and we understand how hard it is to buy land with little cash flow. If you’re wanting to secure finance to purchase undeveloped land, you’ve come to the right place.

Here at ASAP Finance, we provide bespoke Land Bank loans to help make your purchase a reality. These are loans made on land where the highest value and best use (of the land) is to develop, but where the development timeframe is yet to be determined.

When developers approach our team, we use our expertise and business acumen to assess the hidden potential in an undeveloped piece of land. With a focus on the value of the asset (as opposed to income), we swiftly review the application, prioritising the creation of a loan facility enabling you, the developer to secure your next development asset.

Our bespoke land loan packages are available to fund:

  • Land awaiting a plan or zoning change.
  • Development land awaiting resource and building consents.

Key Advantages of the ASAP Land Bank Loans

  • Land is the start of the development life cycle, however it is also the most difficult to fund. Partnering with ASAP Finance you are choosing to work with a funder who not only recognises the value in your land, but one who is also committed to seeing you project reach completion.
  • ASAP Finance has the ability and scale to lend $50,000,000 on a single transaction.
  • Evergreen funding lines provided by ASB & BNZ are supported by private equity ensuring funding is always available for our clients.
  • While we don’t offer second mortgage loans, we are extremely flexible when it comes to loan structuring and can look to implement second mortgages to support and existing first mortgage position.
  • Take advantage of our term specific rates, with lower interest rates available for short term loans.
  • Our experienced lending managers have a strong business acumen that allows us to assess the potential in property quickly, so there’s no risk of the deal falling over.

Land Loan Assessment

For land where the highest value is in development, but a development timeframe has yet to be established, the creation of an appropriate loan requires a keen eye and a lot of experience. Our assessment process allows us to understand the potential locked in undeveloped land and allows you to purchase a section with little hassle.

What we review:

  • Details of the security
  • Your current loan balances and proposed equity contribution
  • Sale and purchase agreements
  • Project feasibilities
  • Potential development projects and timeframes
  • Exit strategy
  • Cashflow

For more on what we review in our assessments, please visit our lending criteria page.

ASAP Funding Process

  1. Submit a funding application. We work quickly, assessing your project and providing indicative terms in as little as 24 hours.
  2. Issuing of formal letter of offer. Following your acceptance of the indicative terms, we issue a letter of offer detailing:  
    • Our fees (including a legal quote for your solicitor)
    • Your interest rates
    • Loan terms
    • Any terms and conditions (we try to keep these as minimal as possible)
      Unlike other lenders, our letters of offer are fully credit approved; we stand by our commitment to fund your project.
  3. Creation of loan documents.Once you have accepted the offer and paid the loan deposit, we work with your mortgage broker to arrange complete loan documents.

If you are working with a mortgage broker, we will pay brokerage direct, typically equivalent to 1% of the loan amount on drawdown. Our establishment fee and legal costs are payable by you. These are stipulated upfront.

Apply for Land Bank Loans for Undeveloped Land

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FAQ

Do you lend on future urban/unzoned land?

Yes, ASAP Finance lends on future urban and unzoned land. 

How do you value the land for landbank loans?

The methodology used to derive the value of a property depends on the specific attributes of the property. For future urban land that is yet to be zoned the development potential is often unknown – in such circumstances the simplest method is to often use a comparable sales method, which considers the prices of other similar properties in the same location, that have recently sold. For zoned land, development outcomes are more certain, in which case a residual valuation method may be used. The residual method is based on the concept that the value of a property with development potential is derived from the value of the property after development, minus the cost of undertaking that development including a profit for the developer. At ASAP Finance, we use our expertise and business acumen to assess the potential in an undeveloped piece of land. 

Do you lend on land bank assets without any holding income?

Yes. In such instances, the focus is placed on the client’s ability to generate cashflow from wider group activities or alternatively, ASAP can provide a capitalised interest facility within the loan facility.

What happens if you are not able to exit a land bank loan within the term of the loan?

We work with clients to understand proposed exit strategies and likely timeframes for delivery before the commencement of the loan. We then structure the loan facilities with this exit strategy in mind, building in realistic timeframes to achieve key milestones including appropriate contingencies. Should a loan extension be required at the end of the term of the loan, we are happy to explore this with you. 

Can you capitalise interest for a land bank loan?

Yes, both interest–only and capitalised interest loan repayment types are available for land bank loans.  

Client Reviews

We are proud of work our clients have completed

Subdivided Sections

90 residential Lots (including Super Lots) located in Hobsonville Point, Auckland. The subdivided sections were unencumbered, and the client required funding to complete the construction of houses across the wider group. An on-demand cashflow facility was provided to enable the group to meet cashflow obligation.

Loan: $20,000,000
End Value: $33,500,000
Loan-to-value: 60%
Term: 12 months

Residential Block Refinance

A large block of residential land located in North Auckland. A Land Bank Facility was provided to enable the client to complete resource consenting for the subdivision. The Loan Facility provided refinance for the existing mortgage, a further advance facility to cover consenting costs, as well as capitalised interest and fees.

Loan: $6,000,000
End Value: $12,000,000
Loan-to-value: 50%
Term: 12 months

Commercial Property Acquisition

A client was in the process of selling a residential investment property, when settlement was called on the commercial property he had recently purchased in Te Aro, Wellington. A 3-month bridging loan (secured against both properties) was provided to enable the client to meet his settlement obligations while he completed the sale process for his residential investment property. No valuations were required.

Loan: $1,750,000
End Value: $2,620,000
Loan-to-value: 67%
Term: 3 months

Land Purchase

Vacant industrial land located at Tauriko Business Estate, Tauranga. The industrial property loan was provided as a ‘bridge’ to enable the client to complete a restructure of its group debt currently with a main bank. The client would eventually build a warehouse on the site. Repayments were on an interest-only basis. No valuation was required.

Loan: $5,000,000
End Value: $7,500,000
Loan-to-value: 67%
Term: 6 Months

Commercial Office Purchase

A six-level commercial office building in Auckland CBD. A commercial property loan was provided to assist with the purchase of the property. Settlement occurred within just 48 hours of receiving the loan application enabling the client to avoid penalty interest and default action. Repayments were on an interest only basis. No valuation was required.

Loan: $7,200,000
End Value: $10,500,000
Loan-to-value: 69%
Term: 3 months + extension

Purchase

A residential investment property located in Mt Roskill, Auckland. The ‘low doc’ loan facility was approved with limited financial information provided by the client. Repayments were to be made on an interest-only basis. No valuation was required.

Loan: $635,000
End Value: $910,000
Loan-to-value: 70%
Term: 6 months

Master-planned Subdivision

This construction loan was structured into two parts: (i) the purchase of an unconsented block of land in Lincoln, Christchurch, and (ii) construction and associated earthworks for the initial stages of the 120-lot land subdivision. The construction loan included capitalised interest and fees, and a revolving GST facility. 50% presales cover was achieved prior to drawdown from the construction facility.

Loan: $19,000,000
End Value: $29,230,000
Loan-to-value: 65%
Loan-to-cost: 80%
Term: 12 months + extension

Single-house Build

A section purchase and construction of a single house within a greenfield subdivision in Flat Bush, Auckland. The construction loan included capitalised interest and fees with no repayments required during the build. Funding was approved without a fixed price contract in place and no valuation drawdown reports were required – instead, drawdowns were provided based on agreed milestones.

Loan: $840,000
End Value: $1,200,000
Loan-to-value: 70%
Loan-to-cost: 82%
Term: 9 months

Terrace-townhouse Development

Construction of 29 terraced townhouses, and subsequent subdivision located in Whenuapai, Auckland. The loan facility provided for capitalised interest and fees, and included a revolving GST facility. Funding was provided without any pre-sales or a QS appointed to the project.

Loan: $12,950,000
End Value: $19,300,000
Loan-to-value: 67%
Loan-to-cost: 81%
Term: 12 months

Commercial Property Acquisition

A client was in the process of selling a residential investment property, when settlement was called on the commercial property he had recently purchased in Te Aro, Wellington. A 3-month bridging loan (secured against both properties) was provided to enable the client to meet his settlement obligations while he completed the sale process for his residential investment property. No valuations were required.

Loan: $1,750,000
End Value: $2,620,000
Loan-to-value: 67%
Term: 3 months

Land Purchase

Vacant industrial land located at Tauriko Business Estate, Tauranga. The industrial property loan was provided as a ‘bridge’ to enable the client to complete a restructure of its group debt currently with a main bank. The client would eventually build a warehouse on the site. Repayments were on an interest-only basis. No valuation was required.

Loan: $5,000,000
End Value: $7,500,000
Loan-to-value: 67%
Term: 6 Months

Commercial Office Purchase

A six-level commercial office building in Auckland CBD. A commercial property loan was provided to assist with the purchase of the property. Settlement occurred within just 48 hours of receiving the loan application enabling the client to avoid penalty interest and default action. Repayments were on an interest only basis. No valuation was required.

Loan: $7,200,000
End Value: $10,500,000
Loan-to-value: 69%
Term: 3 months + extension

Master-planned Subdivision

This construction loan was structured into two parts: (i) the purchase of an unconsented block of land in Lincoln, Christchurch, and (ii) construction and associated earthworks for the initial stages of the 120-lot land subdivision. The construction loan included capitalised interest and fees, and a revolving GST facility. 50% presales cover was achieved prior to drawdown from the construction facility.

Loan: $19,000,000
End Value: $29,230,000
Loan-to-value: 65%
Loan-to-cost: 80%
Term: 12 months + extension

Single-house Build

A section purchase and construction of a single house within a greenfield subdivision in Flat Bush, Auckland. The construction loan included capitalised interest and fees with no repayments required during the build. Funding was approved without a fixed price contract in place and no valuation drawdown reports were required – instead, drawdowns were provided based on agreed milestones.

Loan: $840,000
End Value: $1,200,000
Loan-to-value: 70%
Loan-to-cost: 82%
Term: 9 months

Terrace-townhouse Development

Construction of 29 terraced townhouses, and subsequent subdivision located in Whenuapai, Auckland. The loan facility provided for capitalised interest and fees, and included a revolving GST facility. Funding was provided without any pre-sales or a QS appointed to the project.

Loan: $12,950,000
End Value: $19,300,000
Loan-to-value: 67%
Loan-to-cost: 81%
Term: 12 months

Subdivided Sections

90 residential Lots (including Super Lots) located in Hobsonville Point, Auckland. The subdivided sections were unencumbered, and the client required funding to complete the construction of houses across the wider group. An on-demand cashflow facility was provided to enable the group to meet cashflow obligation.

Loan: $20,000,000
End Value: $33,500,000
Loan-to-value: 60%
Term: 12 months

Purchase

A residential investment property located in Mt Roskill, Auckland. The ‘low doc’ loan facility was approved with limited financial information provided by the client. Repayments were to be made on an interest-only basis. No valuation was required.

Loan: $635,000
End Value: $910,000
Loan-to-value: 70%
Term: 6 months

Residential Block Refinance

A large block of residential land located in North Auckland. A Land Bank Facility was provided to enable the client to complete resource consenting for the subdivision. The Loan Facility provided refinance for the existing mortgage, a further advance facility to cover consenting costs, as well as capitalised interest and fees.

Loan: $6,000,000
End Value: $12,000,000
Loan-to-value: 50%
Term: 12 months

Other Loan and Finance services

Construction and development loans

Development finance is our bread and butter. The bedrock of ASAP Finance is helping Kiwi developers with securing finance to get their development projects out of the ground, having reviewed thousands of transactions and facilitated over $3 Billion in lending to the NZ market.

Commercial & Industrial Loans

If you are planning on buying a residential or commercial investment property, then you need an investment property loan. Not all complex problems require complex solutions; our team of experienced lending managers will work with you to create a simple solution, specific to your needs.

Bespoke Investment Loans Settled Quickly

ASAP Finance is the ideal place for those needing to accelerate commercial acquisition time frames and maximise return on equity through tailored commercial property loans across NZ.

Bridging Finance Structured for Your Needs

ASAP Finance offers a wide variety of bridging loan solutions for borrowers all over New Zealand. Cashflow timing gaps are natural occurrences in business; bridging these gaps can be the difference between securing your next big project or sitting on the side-lines.

Land Bank Loans for Undeveloped Land

Undeveloped land rarely generates income, and we understand how hard it is to buy land with little cash flow. If you’re wanting to secure finance to purchase undeveloped land, you’ve come to the right place.

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