Before 2009, Australian lenders provided loans by taking into consideration the projected property plan or land value. While those norms were an effective and relatively straightforward way to close deals before the economic recession, they have changed since.

Alternatives for Down Payment

Banks require you to make a down payment for new construction, whether you’re building a house, a duplex, triplex, quad, or multi-unit apartments. Moreover, if you own the land outright, or have a partner who does, there’s a possibility of getting approved for the entirety of the construction funding loan without having to put a down payment. This is because if the land is owned by you (or a partner) in its entirety, it has a high enough value to offset the loan cost.

Conversely, if you are looking to purchase property from a seller, it’s possible to ask the seller to pay them when the project is finished or refinanced.

Also, there is an option to make the seller an equity partner. This way, they can contribute the land, and you can get the loan for the construction, which you are liable to pay off when it sells. This way, it is possible to get a commercial construction loan with little or no down payment.

Build a Strong Financial Background

There are several ways to structure a construction finance deal. The key to obtaining bank financing is having strong financial records with cash reserves. Moreover, you have a greater chance of being approved if you’re borrowing the money as a builder or an experienced general contractor.

Furthermore, you must have a complete financial package with your tax returns and balance sheet, showing your assets, liabilities, and net worth. Also, the bank will likely require you to pay a deposit.

Different Banks & Different Deals

Banks prioritize clients who deposit their loans into their own financial institutions, and often, this is one of the conditions for becoming approved for the loan.

Moreover, banks can have different requirements for loan approval. For instance, some banks are more likely to lend money to clients for construction and speculative development projects. In addition, certain banks also specialize in construction funding, while others offer construction loans during specific timeframes. Therefore, it is best to do your research beforehand and get in touch with multiple banks and lenders to achieve the best results.


Getting approved for commercial loans can be tricky. As such, it is essential to ensure that you are well prepared before applying for any commercial loan. This includes putting together an application with all your requisite plans, such as site inspection details, plan permits, etc. If you have contracts with your builder, it will be considered by the bank as a separate entity from you as the owner-developer. In addition, this also applies even if the project belongs to your own building company.

Finally, each bank has its own standards and discretions, which are subject to change. Therefore, it is best to do extensive research on all the options available to you, as well as to contact an expert commercial loan broker to help you find the best option for your requirements.