Commercial Construction Finance – Lender Positioning, Rates & What Actually Matters in 2026
Glenclair Financial | August 2026
Construction facilities from $500k to $150m | Progressive drawdowns | Interest typically capitalised
The commercial construction lending market remains fragmented. Major banks still offer the sharpest pricing on clean, well-pre-committed projects, but their appetite is selective and timelines are long. Specialist non-banks and institutional private credit have filled the gap with greater flexibility on leverage, sponsor profile and presales — at a clear cost premium.
Who lends what
| Tier | Lender type | Typical ticket | Leverage (% of TDC) | LVR on GRV | Indicative rate | Est. fee | Presale requirement | Time to settle | Key players |
|---|---|---|---|---|---|---|---|---|---|
| 1 | Major banks | $10m+ | 55–65% | 50–55% | 7.2–8.7% | 0.5–1.5% | ~50% of debt | 6–12+ weeks | CBA, NAB, ANZ, Westpac |
| 2 | Institutional private credit | $20m–$150m | 70–80% | 65–70% | 8.5–11.5% | 1.0–2.0% | Negotiable | 4–8 weeks | MaxCap, Qualitas, Wingate, Centuria Bass, Metrics, Merricks, MA Financial |
| 3 | Specialist / mid-market non-bank | $2m–$50m | 70–80% | 65–70% (to 75% residential) | 9.5–13% | 1.0–2.0% | Low to none | 2–4 weeks | La Trobe Financial, Pallas Capital, Millbrook, Liberty, Pepper, Trilogy, Alceon, Thinktank, Balmain |
| 4 | Short-term private / bridging | $500k–$7.5m | Sized on value | 65–70% | 10.75–14% | 1.5–2.5% | n/a | 5–15 days | Assetline, Chifley Securities, Zagga |
| 6 | Stretch senior | Blended | 80–85% | 70–75% | 12–16% blended | 2.0–3.0% | Usually none | 3–6 weeks | Tier 2–3 lenders |
| 7 | Mezzanine | $1m–$15m | Top-up to 85%+ | Assessed on senior GRV | 14–22%+ | 2.0–3.0%+ | None | 2–4 weeks | Specialist mezz funds & family offices |
Ticket size is the primary filter. A $12m project will not get a meeting with a $20m minimum desk, and a $60m project sits above most specialist non-banks' single-loan appetite.
Reading leverage correctly
Construction debt is quoted on three different bases. Always restate every term sheet as a dollar facility against your own feasibility:
- Total Development Cost (TDC) – standard for senior facilities (typically 70–80%)
- Gross Realisation Value (GRV) – usually 65–70%, up to 75% on quality residential
- As-is value – used only for land/pre-DA facilities (40–55%)
The lower of the TDC and GRV tests sets the facility size.
The real cost of a lower rate
On a project without sufficient presales, the bank facility is often the more expensive option once holding costs and delayed revenue are included. Higher leverage from non-banks can also free significant equity for the next site — frequently a stronger driver of return than the interest rate alone.
Practical takeaways
- Rank lenders by ticket size first, then rate.
- Presales (or the lack of them) decide which tier you can access more than price does.
- Price the delay, not just the margin.
- Both leverage tests bind — restate every offer in dollars against your feasibility.
- The QS report is the gate, not a formality. Fixed-price contracts, real contingencies and clean cost-to-complete figures keep drawdowns moving.
- La Trobe Financial, Pallas Capital and Millbrook remain strong options in the $5–15m band. Millbrook has no presale requirement.
How we help
Glenclair runs independent tenders across banks, specialist non-banks and institutional private credit. We model every offer on a delay-adjusted, all-in basis and coordinate valuation, QS and legal workstreams against your settlement date.
Contact us for a confidential review of your position at info@glenclair.com.au.
This update is general information only and does not constitute financial, investment, tax or credit advice. It does not take into account your objectives, financial situation or needs. Figures are indicative as at August 2026, are subject to change, and lending terms are set by individual lenders on a case-by-case basis. You should seek professional advice before acting on any information contained in this update.