What changes the funding
Without presales, the lender loses the debt cover that qualifying contracts provide — so the deal is underwritten on GRV, margin and exit instead. Private-credit senior fills the gap, typically at a lower leverage and higher rate than a presale-backed bank facility.
It's the right tool where presales would erode price or delay a start, and the margin is strong enough to carry a more conservative debt position.
| Presales | Not required |
|---|---|
| Leverage | More conservative (e.g. lower % of GRV) to offset |
| Pricing | Higher than presale-backed bank senior |
| Key credit test | Margin, builder, and a credible sell-down or refinance exit |
Worked example
The same $18.0m / $12.5m reference deal, funded two ways — a bank facility that requires qualifying presales, versus a non-bank facility with no presales. No-presale finance costs more and needs less equity because it leans harder on the debt; the trade-off is a lower net margin.
Bank senior — with presales
| Senior debt | $8.66m |
|---|---|
| Developer equity | $4.66m |
| Loan to value (LVR) | 48.1% |
| Loan to cost (LTC) | 65.0% |
| Senior rate | 8.50% |
| Finance cost | $736,078 |
| Development profit | $4.32m |
| Return on equity | 92.6% |
Lower rate, but sales must be achieved before or during construction. Larger equity cheque; strongest margin.
Non-bank senior — no presales
| Senior debt | $9.81m |
|---|---|
| Developer equity | $3.82m |
| Loan to value (LVR) | 54.5% |
| Loan to cost (LTC) | 72.0% |
| Senior rate | 10.50% |
| Finance cost | $1,030,310 |
| Development profit | $4.01m |
| Return on equity | 105.1% |
Start without presales and sell into completion. Higher rate and lower margin, but speed to market and less pre-commitment.
Illustrative only — actual leverage, pricing and presale tests depend on the lender, market and project.
When it's the right structure
No-presale finance suits well-margined projects where presales would discount pricing or delay the program, and the developer would rather sell completed stock into the market.
Advantages and limitations
Advantages: start without waiting on presales; capture completed-stock pricing. Limitations: lower leverage and higher cost, so more equity is required up front.
Related services
Frequently asked questions
Can I fund a development with no presales?
Yes. Private-credit senior can proceed without qualifying presales, assessing the deal on GRV, development margin, builder capability and the exit. It's priced higher than a presale-backed bank senior to reflect the absent cover.
Why proceed without presales?
Because presales can be slow, discount your pricing, or simply not materialise in the current market — and completed stock often sells at a higher price than off-the-plan. No-presale funding lets a well-margined project start now rather than wait.
What do lenders require instead of presales?
A conservative leverage position, a strong development margin, a capable builder on a fixed-price contract, and a credible sell-down or refinance exit. The absent presale cover is replaced by a lower LVR and a higher rate.