Why buying the site is often the hardest part to fund
For developers and builders, the land comes first. A good site with the right zoning, frontage or position doesn't stay on the market long, and vendors favour buyers who can settle cleanly. The trouble is that most lenders want to fund the whole project in one package. They want plans, approvals, costings, a builder's contract and pre-sales before they will lend on the land, and that can take months you don't have.
Banks can be even slower for land and sites with no income. Approval can take up to three months or more, often with a lower lending limit for vacant land, and the bank may not lend the amount you need.
What we fund, and what we don't
Equity Tap is a direct, independent private business lender. We lend our own money, from $50k to $5m, for one to twelve months, secured by a first mortgage, second mortgage or caveat over residential or commercial property anywhere in Australia. For development sites, we fund the purchase and settlement of the land itself.
We are not a construction lender. We don't offer construction loans or progress draws during a build. Our role is to get the site bought and settled quickly so you control it, then step aside when your construction finance or another exit is ready.
| We can help with | Not something we offer |
|---|---|
| Deposit on a development site | Construction loans |
| Full or part purchase price at settlement | Progress draws during a build |
| Settlement shortfall when other finance falls short | Funding tied to building stages |
| Holding the site while approvals are sought, within a one to twelve month term | Long-term land banking |
How it usually works
- Tell us about the site. Call 1300 123 024 with the contract, price, settlement date and any other property you can offer as security.
- Conditional approval. Often given on the phone, with a term sheet in about 30 minutes once we have the scenario.
- Security set-up. Usually a first mortgage over the site being bought, often with a second mortgage or caveat over another property to support the amount.
- Settlement. Eligible loans can settle in as little as 24 hours once documents are complete.
- Exit. Your construction lender, a long-term refinance or a sale repays the loan within the agreed term.
No valuation, no financials
We don't order a valuation before approval, which removes a common delay on land purchases. For a property-secured loan, we don't need tax returns, BAS, profit and loss, an accountant's letter or bank statements. We need ID, property and existing mortgage details, the contract for the site and evidence of the exit. There is no credit check at initial assessment.
Repayments while you plan
A vacant site doesn't produce income. Interest for up to the first six months can be prepaid or added to the loan, so there are no scheduled payments in that period while you prepare plans or line up your construction finance. Interest is not waived, but the loan isn't drawing on your other cash flow while the site earns nothing.
Realistic exits for site purchases
- Refinance to a construction lender once plans, approvals and costings are in place.
- Refinance to a bank or long-term lender on the land alone.
- Sale of another property in your portfolio.
- Sale of the site itself, for example after adding value through approvals.
- Settlement of a property sale already underway.
The exit must fit inside the one to twelve month term. If your approvals are likely to take longer, we'll tell you so on the first call. Our exit strategy guide and LVR guide help you plan the numbers.
For example
For example, a builder finds a corner block suited to a small townhouse project. The vendor wants a quick settlement and the builder's construction lender won't fund until plans are approved. A short-term first mortgage over the block, supported by a second mortgage over the builder's existing yard, settles the purchase. Once plans and costings are ready, the construction lender refinances the land as part of the project loan.
Related pages
Buying an established commercial building instead? See commercial property purchase funding. Bought the site at auction? See auction purchase finance. For releasing equity from property you already own, see commercial equity release.
Brokers
If your client's construction finance won't be ready in time to settle the land, send the scenario through our broker page. We fund the site; you keep the construction deal.
Lock in the site
Each loan is priced on the client's individual circumstances, aiming for the sharpest rate available for that situation, with the full cost shown before you proceed. Apply online or call 1300 123 024.
Business-purpose lending only. Approval, timing and terms depend on the scenario.
Frequently asked questions
Do you fund construction?
Can you lend on vacant land?
How quickly can I settle on a site?
Do you need DA approval or plans before lending?
Do you need a valuation of the site?
Can I avoid repayments while I plan the project?
How is the loan repaid?
Brokers: send the scenario through the Equity Tap broker channel and you will deal with the same lending team.