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Can I get development finance without presales?

Updated Sept 2026 · Reviewed by The Lienhouse team

Yes. Banks usually want presales covering most or all of the debt before they fund construction. Non-bank and private development lenders will fund with reduced presales or none, because they assess the end value, the location, the builder and the exit instead. The trade is price and leverage: the rate is higher and the lender may advance a smaller share of the end value.

Key takeaway
No-presale development finance is available from non-bank lenders. Expect a higher rate and more conservative leverage in exchange for starting the build now.

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Presales protect a lender against one risk: that the finished product will not sell for what the feasibility says. A bank deals with that risk by making the developer sell first. A private lender deals with it by lending less against the end value, looking hard at the product and the market, and charging more.

Why developers skip presales

  • Small projects. Four townhouses or a small subdivision are hard to sell off the plan. Buyers of that product want to see it finished.
  • Price. Off the plan sales often need a discount and carry agent and marketing costs up front. Completed stock in a steady market can sell for more.
  • Time. A presale campaign can add six months before construction starts, while holding costs on the land keep running.
  • Rising build costs. Locking in sale prices a year or two before completion leaves the developer carrying all the cost risk.

What the lender looks at instead

  • End value evidence. Recent sales of comparable finished product nearby, not just a valuer’s opinion.
  • Depth of the market. Who buys this product, how many sell each month and at what price points.
  • The builder. Financial strength, a fixed price contract and a record with similar projects.
  • The developer. Completed projects of similar size.
  • Equity. Real cash or land equity in the deal.
  • The exit. Sale of completed stock, or a refinance to a residual stock loan or investment facility.

Typical terms

Development finance on this site runs from 8% p.a., up to 70% of gross realisable value, for terms up to 24 months. A facility with no presales will usually sit above the entry rate and may be sized more conservatively than the maximum. Interest is commonly capitalised into the facility, so there are no monthly payments during the build.

Risks to weigh

Without presales, the developer carries the full market risk. If prices fall during the build, there are no contracts to fall back on, and the loan still has to be repaid at the end of the term. Build a margin into the feasibility that can absorb a fall in prices and a slower sales period, and have a plan for holding stock after completion.

A middle path

Some developers start with no presales, then sell a portion during the build once the structure is up and buyers can see the product. That can lower the rate at a later stage or make the exit refinance easier. The construction loans page explains how progress draws work once funding is in place.

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FAQ

How many presales do banks want?

It varies, but commonly enough qualifying presales to cover 80 to 100% of the debt. Sales to related parties and foreign buyers are often excluded.

Is a no-presale loan more expensive?

Yes. The lender is carrying market risk a bank would pass to presale buyers, so it prices for it.

Can I sell during construction?

Yes, and most developers do. Selling closer to completion often achieves better prices than selling off the plan.

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