Residual Stock Finance
We are innovative, positive and solution-focused.
- Fast loan approvals and turnaround
- Tailored property development finance
- Up to 90% funding of the total cost of property development
- Creative funding solutions
- Flexible interest payment options
- Competitive pricing
- Lower requirement for construction loan pre-sales
- Early equity release
- Dedicated Relationship Management Team
- Access to networks and expertise
- A collaborative and fair approach
Maximise Return on your Investments
Hold or leverage completed property stock for best returns.
Range of residual stock loan options
Loans from $100K to $50M, from 3 months to 3 years.
Up to 90% LVR financing.
Best residual stock loans deal in Australia
Access Australia’s top non-bank lenders for reliable site financing.
Wide range of options
Loans from $100k to $50M, one week to three years. Immediate and emergency funding options!
Cash Out Equity or Refinance for better terms and interest rates
Transparent Best and Fair Non-bank lending
Access property and development finance through top-tier non-bank lenders.
The rapid growth in house prices and housing costs in Australia and around the world has resulted in the need for better and more timely information about the contributing factors.
A housing market works like many other markets, with prices fluctuating to balance supply and demand. Housing markets, however, have unique determinants of supply and demand and time frames for adjustment.
What are Residual Stock Loans?
The term “Residual Stock” refers to (as the name indicates) the stock of apartments that remain unsold in development and for which a developer wants to borrow.
Most property development projects involve significant construction debt that must be repaid upon completion. In the case of townhouses and land subdivisions, this typically means selling enough units to pay off the construction debt. The developer must refinance the balance if they do not have enough sales at completion. Retained stock loans can assist with this.
Developers often use residual stock loans to maximize their return on investment from an unsold project. In a market downturn, it may be challenging to sell the remaining stock, which means the developer will need more time to settle the construction loan balance. It may be better for developers to hold some of their stock and sell it when the market is favourable rather than compromise sales prices.
Remaining stock finance involves refinancing the development loan against the unsold units and repaying it over six to twelve months. The residual stock loan is essentially a cost-saving measure by paying out the higher-interest rate construction finance and replacing it with a lower interest rate loan. Since residual stock loans involve a completed product, there is no construction risk, so interest rates are minimal.
The developer may still wish to reinvest their equity in the remaining stock in their next project, even if there are sufficient sales to repay the construction debt at completion. Remaining stock loans can also provide developers with working capital, which can be used for other projects in the pipeline, such as purchasing their following development site. Investors choose to hold some of their stock to sell later when market conditions are more promising and to maximise their return on investment (ROI). Property developers planning more projects in the future may need more time. Residual stock financing can assist with a development loan refinanced as a short-term loan. Reserve or residual stock can then be held until a more favourable time. Instead of a large facility covering all residual stock, separate loans can be set up for each unit or dwelling. These loans are settled and closed when the unit or dwelling is sold.
If a developer benefits financially from a remaining stock loan, it is also a good option. You can rent out the residual stock from property development and take advantage of negative gearing benefits while paying only interest on the residual stock loan. Some traditional lendMost traditional lenders offer Residual Stock loans but are limited to about 75% LVR since the rent from residential dwellings must cover the loan payments (a debt cover ratio of 1.2 is required). We offer a higher LVR ability for the project. We are an option if the devA developer may choose us if they want to maximise cash available today for their next project. They will sell relatively quickly. Age against the reThe company could then leverage its residual stock to invest in other areas – for example, buy its next development site – or improve its balance sheet by retaining these assets, thus.
How can we assist?
Land developers who have completed a project and want to retain some of the remaining units rather than sell them to settle their property development loan balance may use residue stock loans.
If you are applying for a development loan, the lender may stipulate the level of sales you need to achieve. After the development is completed, you must repay the loan. You can refinance or sell some of the residual amounts
of stock. Suppose market conditions aren’t right. In that case, residual stock can be challenging to sell because lenders may be reluctant to provide financing to buyers in developments with high vacancies.
Residual stock financing can help with a short-term loan refinanced as a development loan. The remaining stock can then be held until a better time. In general, lenders will set up separate loans for each unit or dwelling instead of a single large facility for all residual stock. When each unit is sold, that particular facility is closed.
Commercial projects, such as the redevelopment of retail shops, supermarkets, office suites, or large apartment blocks may also qualify for property development income, allowing you to refinance more units.
How can we offer you a better deal with private loans?
If you would like to hang on and sell in better market conditions:
Some property developers hold some of their stock to sell later when market conditions are more promising and can maximise their return on investment (ROI). Property developers planning future projects often need more time.
In this situation, maintaining a strong capital position is a smart strategy, especially when faced with potential gaps in cash flow between starting construction and generating revenue.
An investment for the long run
A developer may find it financially beneficial to rent out residual stock from land improvement and gain negative gearing advantages while paying only on remaining stock loans.
The residual stock can also be used to buy their next development site or improve processes.
Retaining these assets will provide long-term capital growth.
Why use us for your residual stock loan?
Our pre-qualified pool of over 300 investors – lenders provides fast, transparent non-bank property and development financing. We strive for excellence and best practice.
Construction finance has been reinvented for property developers and business owners. For faster, more reliable, and secure construction funding, we use the latest technology. Australia’s best commercial brokers and lenders use this process.
We are more than a lender; we are your wealth creator. Before your application is presented to lenders on our platform, our team helps you structure it. Lenders can submit their terms to finance a deal after reviewing all the information.
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