Residual Stock Finance

If you are a property developer wishing to expedite construction to capitalise on market demand, your pre-sales are slower than ideal, or perhaps your strategy is to intentionally withhold sales until completion, residual stock finance may provide the short-term leverage you need to free up equity for your next site or re-investment. Your Green Team specialist finance broker can show you how.

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How much can I borrow?

Current lending parameters:

  • Borrow up to 80% of the value of each unit
  • Borrow up to 100% of the value of each unit using a guarantor
  • Max loan term: 1-2 years on an interest only term
  • Low doc options are available

Green Finance Group specialist finance brokers have a reputation for providing superior quality loan applications coupled with a high volume of lending to major banks and lenders. This allows us priority access to key credit department decision-makers and means we can accurately provide a clear picture of funding solutions available to you, fast.

What are lenders looking at?

  1. Concentration: i.e. the number of units held in the same complex / location
  2. Leverage: Depending on the concentration, lenders will generally consider a Loan to Value Ratio (LVR) of between 40% – 70%. This may be on the combined value of each individual unit or on the ‘In One Line’ value, that is the combined value of the units if sold as one lot (a more conservative approach usually adopted by major banks).
  3. Interest Cover Ratio (ICR): the ICR is a multiple of the loan repayment amount. From the lender’s perspective it reflects the developer’s ability to cover interest expenses on outstanding debt. Most lenders work on a minimum ICR to ensure that the debt required can be repaid with regular income. Lenders will typically require an ICR between 1.1:1 – 3:1. The more conservative the lender, the higher the ICR is likely to be. For example, for every $1 of interest payable on the loan, the lender expects net rental income of at least $1.10 – $3.00. The ICR can also have an impact on the maximum LVR the lender will allow.

It’s important to note that the ICR is just one of many financial indicators used to assess the viability of the funding requirement from the lender’s perspective. Other factors, such as cash flow, debt levels, market conditions, and project-specific risks will also be considered. In some cases, it may be more beneficial to borrow at a higher interest rate, with the option for capitalisation and with less taxing ICR requirements.

Your Green Team specialist commercial finance broker will be in the best position to provide an overview of your borrowing capacity, loan options and corresponding costs from a range of bank and non-bank lenders.

Our Residual Stock Finance Specialists

Daniel Green


Australia's leading hospitality, accommodation and childcare finance specialist and winner of Australian Broker of the Year 2022.

James Kelder

Finance Consultant

One of Australia's most in-demand commercial finance brokers and awardee of Best Finance Broker 2024 (Better Business Awards), James specialises in commercial property investment and development finance.

Mark Anyon

Finance Consultant

An award-winning finance broker experienced in all aspects of commercial lending and renowned for his expertise in securing funding solutions for hospitality venues and groups.

LATEST Residual Stock Finance ARTICLE

"Property Development Finance: Busting the top 5 myths on Residual Stock Loans"

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