Construction and development loans

Development finance is our bread and butter. At ASAP Finance, our foundation is built on helping Kiwi property developers secure the funding they need to bring projects to life. Since inception, we’ve reviewed thousands of transactions and facilitated over $3 billion in property development lending across New Zealand.

Our lending managers bring real-world experience and sharp commercial acumen, delivering practical solutions that add real value to our clients. Each year, our development and construction loans contribute to the delivery of over 1,000 new homes and 500 new sections to the New Zealand housing market.

Whether you’re looking to build a single residential house or master planning a staged subdivision, ASAP Finance has a proven track record with commercial property finance. Our lending managers can tailor a bespoke funding solution for your development costs.

Our bespoke development funding packages are available for:

  • Residential developments
    • Standalone houses
    • Duplex, triplex and terrace townhouses
    • Multi-unit apartments
  • Industrial & commercial construction
    • Commercial offices/retail units
    • Industrial warehouses
    • Childcare centres and other specialist commercial assets
  • Subdivisions
    • Residential, commercial, and industrial subdivisions, including master-planned subdivisions.

Key benefits of the ASAP Finance development packages

  • Loan sizes between $500,000 to $50,000,000.
  • Simple lending criteria with no hidden costs and fixed fees – this includes funding with no pre-sales, no QS appointments, and no registered valuations.
  • We take advantage of our independence, adapting our structures and products to create highly competitive funding packages for our clients.
  • Loans can be settled within two days of the receipt of your initial funding application.
  • We staff experienced lending managers with an active hand in the development industry.
  • We tailor a solution specific to your needs with interest-only, part interest-only, and capitalised interest loans available.

Development finance assessment

From inception to realisation, ASAP lending managers review the full development lifecycle to deliver funding packages specifically tailored to clients’ needs.

Our comprehensive process allows us to give constructive feedback and advice to clients not only at an enquiry level but also on an ongoing basis during the term of the loan, assisting with communication between the client, contractors, and consultants.

What we review

Unlike turn-key home loans, development and construction loans require a comprehensive breakdown of various budgets, consents, and contracts.

  • Project feasibilities and construction budgets
  • Building plans and consents, including resource consents, building consents, and engineering approvals
  • Construction contracts and tenders
  • Pre-sales estimates
  • Exit strategy assessment

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
    • 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 construction loan documents. Once you have signed our letter of offer and paid the deposit on our fee, we work with your solicitor to arrange the completion of loan documents and work with them towards settlement.

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 Construction and development loans

It's just that simple

Apply Now

For any assistance:

FAQ

Can I get a development loan from ASAP Finance?

Yes. Development finance is a core business for ASAP Finance and includes financing for land subdivisions and construction. This includes commercial, industrial and residential developments.

What is property development finance?

Property development finance is a short-term loan for residential, commercial and industrial development projects. It can involve financing the purchase of the land and progress (staged) payments for covering associated costs to complete the development.

Will ASAP Finance fund commercial developments?

Yes. In addition to residential projects such as terraced townhouses and apartment complexes, ASAP Finance actively funds a wide variety of commercial and industrial projects. This includes the financing of retail shops, offices, industrial warehouses, showrooms, live-work units and much more. ASAP has also funded a wide variety of specialised commercial assets such as vineyards, orchards, motels, hotels, medical centres and childcare centres.

What information is required to apply for a development loan?

Documents most commonly required by ASAP Finance are (i) a sale and purchase agreement and (ii) draft building plans. Often this is all we need to issue indicative terms. Other supporting information can include approved Resource and Building Consents.

Do I require documentation such as fixed price construction contracts, valuations and full financial disclosure to get development funding?

No. ASAP Finance is not a typical New Zealand development finance company that requires you to ‘tick all the boxes’. Each project is assessed on its business merits and ASAP Finance can often waive many of these conditions imposed by other lenders.

What is the role of a QS do, do I need one?

A quantity surveyor is a qualified professional responsible for estimating the cost of a construction project. They are also responsible for monitoring the ongoing progress of the project from both cost and time perspectives.

Most financial institutions require an approved quantity surveyor to carry out an initial assessment report and provide ongoing drawdown reports during the construction phase of a development. This cost of the quantity surveyor is borne by the developer.

As ASAP Finance, we can often waive the need for a QS to be appointed to a project. Our lending managers are trained to identify key risk factors that may affect a projects successful completion. We also work closely alongside our clients to ensure that a funding methodology is agreed upon before the project commences.

What is GST Facility and how does a GST Facility work?

A GST Facility is a revolving credit facility that is used to exclusive fund the GST portion of a Progress Payment.  Funds drawn down from this facility to pay GST are repaid by the IRD in the form of a GST Refund. 

Implementing a GST Facility enables a lender to fund a project on a GST exclusive basis, at the same time ensuring that all contractors are paid in full (the GST inclusive amount).   

Simply put, using a GST Facility reduces the amount you need to borrow from a lender by approximately 15%. Where reducing the amount that you need to borrow (i) assists with meeting LVR requirements,  and (ii) reduces the total interest expense for the project.

Let’s look at a quick example. Bob has a Construction Facility of $5,000,000 and a $100,000 GST Facility. The builder makes a claim of $575,000 including GST.  

  • The Lender makes the payment of $575,000 to the Borrower made up as follows: $500,000 is paid out from the Construction Facility and $75,000 is paid from the GST facility (so the GST facility falls to $15,000 being $100,000 less $75,000) 
  • The Borrower makes the payment to the Builder/Contractor of $575,000.  
  • The Borrower then claims the GST from the IRD, i.e. lodges his monthly GST return with a claim of $75,000 
  • The IRD processes the claim and pays the GST refund directly to the Lender to replenish the GST facility, i.e. $75,000 is paid directly to the Lender and the GST facility goes back to $100,000 

For a GST Facility to work effectively, you need to ensure: 

  • The borrowing entity is GST registered and your GST position is correct, i.e. you are entitled to claim GST in relation to the project. 
  • You are on a monthly GST cycle, i.e. GST returns are filed monthly. This will ensure that the GST Facility does not go into deficit.  

Do you fund small renovations?

Yes, ASAP Finance funds smaller projects including renovations. We can assist with the initial settlement of the property (or refinance of an existing mortgage) as well as the cost of the renovation. Renovations are assessed similar to development loans and involve a review of project budgets and any relevant consents (as applicable).  

What is capitalised interest?

Capitalised interest refers to ‘capitalising’ the monthly interest expense onto the loan balance each month (instead of paying a monthly interest expense). Once the loan matures, the borrower repays both the principal and accumulated interest in full. 

How do you calculate capitalised interest?

For construction loans, interest is only charged on the outstanding balance of the loan so the interest expense will vary depending on how quickly (or slowly) funds are drawn from the construction facility. For this reason, capitalised interest is an estimate only.  

To calculate the capitalised interest provision, lenders use the ‘S Curve’; a cashflow model that forecasts monthly drawdowns and associated interest expenses. A simplified approach involves estimating the average drawn balance of the loan. This is done by applying a ‘utilisation rate’ for the construction component of the loan.    

Let’s take the following example:  

  • A developer wants to borrow $2,000,000 for 1 year  
  • $1,200,000 is advanced on settlement 
  • $800,000 is drawn down in stages for the construction 
  • The applicable interest rate is 10% per annum 

Capitalised interest would be calculated as follows: 

  •  $1,200,000 (being the initial cash advance) x 10% = $120,000 
  • $800,000 (being the construction facility) x 65% utilisation x 10% = $52,000.  

So the total capitalised interest facility would total approximately $172,000. 

What is ‘equity contribution’ in development funding?

Equity contribution is the percentage of costs that are funded by the developer as a percentage of the total project budget. The total project budget includes the costs associated with land, professional fees, construction, council fees, finance and contingency. 

Can we get 100% funding?

No, loan facilities from ASAP Finance typically require a minimum 15%-20% equity contribution as a percentage of total development costs. However, in many cases, we have funded 100% of forward-looking costs for our client’s projects. This is where the client has already contributed equity toward the property in the form of a deposit on the purchase, relevant council consents, or value uplift in the property.  

Do you consider value uplift in a property as equity?

Yes, if you purchased the property some time ago and the value of your property has increased since you purchased it, we can consider the increased value in your property as equity.  

Let’s assume a developer purchases a property for $1,000,000 funded by a $400,000 cash deposit and the balance of $600,000 being funded with debt. In this scenario the developer’s equity is 40%, being his cash contribution toward the purchase price.  

Now assume two years pass and the value of the property increases by 40% to $1,400,000. While the developer has not contributed further cash, there is inherent value in his property. The developer’s equity is now $800,000, being the market value of the property of $1,400,000 less the existing mortgage of $600,000. 

What is the best ownership structure for my development?

When it comes to structuring property development ownership in NZ, there’s no one-size-fits-all solution. Depending on the ownership structure and overall goal the shareholders/owners wish to achieve, their legal and tax advisor may recommend one type of entity over another. Some of the most common development entities we have seen over the years include Limited Liability Companies, Trust and Limited Partnership. 

We do recommend that clients consult with their accountants and lawyers before deciding on the ownership structure. 

Do you provide funding for consenting (resource consent and building consent) and other soft costs?

Yes, ASAP Finance can provide funding for consenting and other soft costs. This is typically structured as a cash flow facility secured against the as-is value of the land. 

Do I have to be an experienced developer to get a loan?

We work with developers with varying skills and abilities. For those who are new to development, ensuring that the right project consultants are involved in the project is a must. ASAP Finance partners with all clients and will freely share the knowledge and experience gained through the billions worth of projects funded over the years. 

Do you fund build to rent?

Yes, we have funded many build-to-rent developments over the years. Build-to-rent projects involve retaining the properties on completion of a project, with the developer holding them as a long-term investment. This is done by refinancing the development loan with a mainstream lender such as a bank. Early engagement with mainstream funders is essential to ensure a smooth transaction from a short development loan to a long-term investment loan.  

Do I need presales to get development funding?

ASAP Finance can fund projects with little or no presales. By removing initial presale hurdles, developers can move their projects forward at a pace instead of waiting for presale targets to be met. Selling closer to a project’s completion also enables the developer to achieve the maximum sale price. Buyers are more motivated and confident in paying a better price for a completed property rather than buying off the plans. In a market where prices are appreciating, the developer can ride the market during the construction phase and maximise project profit. 

Client Reviews

We are proud of work our clients have completed

construction and development loans

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
construction and development loans

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
construction and development loans

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
construction and development loans

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
construction and development loans

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
construction and development loans

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
construction and development loans

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
construction and development loans

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
construction and development loans

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
construction and development loans

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
construction and development loans

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
construction and development loans

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
construction and development loans

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
construction and development loans

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
construction and development loans

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
construction and development loans

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
construction and development loans

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
construction and development loans

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.

Useful Links

FAQ

Financial Advisors

Our Team

Community

About

Need bespoke funding from New Zealand’s market-leading development lender?

Contact Us