Why traditional lenders decline this request
Banks avoid development lending because development risk is high: timelines are uncertain, costs can exceed budget, buyer/leasing markets can shift. Adding a second mortgage makes banks even more nervous—if the development stalls or fails, the second lender is in a weak position. Banks would rather decline than manage this complexity.
The problem is that most development sites have clear value: they have development approval, defined land banks, and clear end-use. But banks can't see past the risk to assess the genuine equity and opportunity. Developers are stuck without access to bridge or construction funding, even when projects are viable.
How specialist lenders approach this differently
- Development experience — They assess development timelines, costs, and market risk.
- Bridge financing — They fund development and construction periods, not just completed property.
- Fast assessment — Development funds can move in 48 hours with the right structure.
Dealing with something similar?
Check Your OptionsWhat a typical deal looks like
Illustrative example — not a real caseImagine a developer who owns a $3.2M land site with development approval for a 24-apartment mixed-use building. A first mortgage of $1.0M is in place. The developer has development finance in place for the building costs, but needs an additional $1.2M for early works (subdivision, infrastructure, contingencies). Their bank refused a second mortgage because they don't offer development funding. A specialist lender reviewed the land ($3.2M), development approval (24 apartments with presales interest), first mortgage ($1.0M), and the development timeline (24 months). They approved a $1.2M second mortgage at 8.49%, 24-month term, LVR 69%. Settlement in 2 days. The developer could start early works immediately.
What lenders want to see
- Development approval — Council approval or conditional approval for the planned development.
- Development timeline — Detailed schedule from early works through completion.
- Cost estimate — Professional cost estimate for early works and full development.
- Market evidence — Presales, feasibility study, or comparable development values.
When this might not work
Development second mortgages may not work if: (1) approval is uncertain, (2) cost estimates are vague, or (3) the end-market is unclear.
- Approval pending — conditional approval with major conditions not yet satisfied.
- No budget detail — cost estimates are rough or preliminary.
- Speculative market — no market demand evidence for the end product.
- Fast approval based on deal merit
- Flexible terms suited to your cash flow
- Options with complex structures
- Direct lender relationships
How to get started
- Step 1: Describe your situation. Tell us what you need and any challenges.
- Step 2: Get matched with lenders. Our AI finds the right fit from specialists on our platform.
- Step 3: Review and move forward. Choose your option and connect directly with lenders.