Quick answer: Development lenders commonly test more than one leverage measure: loan against current or completed value, loan against total development cost and sometimes debt as a percentage of GRV. The binding constraint is whichever produces the lower acceptable facility after interest, fees and contingency are included.
Questions borrowers, investors and developers commonly ask
- The broker says 70% of cost but also 65% of GRV — which number matters?
- Does my land equity count toward the developer contribution?
LTC measures project leverage against cost
Total development cost can include land, construction, consultants, statutory costs and approved finance/contingency items depending on lender methodology.
GRV/LVR measures security exposure against value
End value depends on a lender-accepted valuation and can move with comparable sales, presales, market conditions and project specification.
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
The broker says 70% of cost but also 65% of GRV — which number matters?
Development lenders commonly test more than one leverage measure: loan against current or completed value, loan against total development cost and sometimes debt as a percentage of GRV. The binding constraint is whichever produces the lower acceptable facility after interest, fees and contingency are included.
Does my land equity count toward the developer contribution?
Total development cost can include land, construction, consultants, statutory costs and approved finance/contingency items depending on lender methodology.
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.
