Quick answer: Yes, if the facility is capped by a percentage of lender-accepted GRV or completed value. A lower valuation can reduce available debt even if construction cost has not changed, creating a larger equity requirement or making the project unviable.
Questions borrowers, investors and developers commonly ask
- My feasibility says $8m GRV but the lender values it at $7m — what changes?
- Can presales override a low valuation?
Use the lender valuation in the debt model
The developer’s sales appraisal is not the bank’s security value. The funding limit should be recalculated immediately.
Challenge with evidence, not hope
Recent comparable sales, genuine arm’s-length presales and specification evidence can support a valuation review, but the lender decides what valuation it accepts.
Related guides
General information only. Commercial-property and development lending criteria vary by lender, transaction, security and market conditions. This is not legal, tax or investment advice.
Frequently asked questions
My feasibility says $8m GRV but the lender values it at $7m — what changes?
Yes, if the facility is capped by a percentage of lender-accepted GRV or completed value. A lower valuation can reduce available debt even if construction cost has not changed, creating a larger equity requirement or making the project unviable.
Can presales override a low valuation?
The developer’s sales appraisal is not the bank’s security value.
Will every lender treat this the same way?
No. Commercial and development lending policy varies materially by lender and transaction.
Should I apply before the structure is tested?
For material or unusual transactions, test lender fit and the funding structure before creating formal applications.
Sources and verification
Need help matching this to a business-finance option?
GPS Finance can review the funding purpose, conduct, documents and lender fit before you make a formal enquiry.
