Property developers are no strangers to change, but the current lending environment demands a sharper, more strategic approach to financing. Rising interest rates, tightening credit conditions, and more cautious lenders have shifted the game. Developers who want to succeed in this cycle need to be proactive, flexible, and well-informed.
In this article, we outline the key elements of smarter debt structuring that can help you improve project viability, reduce financial risk, and maximise returns. Whether you’re planning a boutique townhouse build or managing a multi-stage community, these principles can give you an edge.
Rethink Your Debt Structure
Getting a competitive rate is important, but how your debt is structured can make all the difference.
Understanding the role of senior versus mezzanine debt, and the pros and cons of non-bank lenders or joint venture financing, is crucial. For instance, mezzanine debt can increase your leverage but comes at a cost. Joint venture partners may offer capital without traditional interest but may want equity or control in return.
Choosing the right blend of funding sources can give your project more flexibility, improve cash flow, and reduce the risk of a single point of failure if things change midstream.
Know What Your Lenders Want
In 2025, lenders are being more selective. Developers need to respond accordingly.
More than ever, financiers are scrutinising feasibility studies, presales levels, exit strategies, and the capability of the delivery team. For newer or smaller developers, demonstrating a track record, governance, and risk mitigation strategies can make or break a deal.
Don’t wait until you need finance to start building these relationships. Engage early, be transparent, and show that you understand the numbers better than they do.
Manage Cashflow Strategically
Serviceability has become a pressure point for many developers, especially with interest rates eating into margins.
Smarter structuring involves more than negotiating lower rates. Consider how you time drawdowns, whether you can capitalise interest, and how to align repayment milestones with project cash flow.
Some developers are also exploring staged finance, where different parts of a project are funded separately. This allows greater control and more targeted risk management.
Plan for Conservative Valuations and Buffers
Lenders and valuers are taking a more cautious view of development risk. That means loan-to-value ratios may be tighter than expected, and contingency expectations are rising.
Building in financial buffers from the outset isn’t just about impressing the bank. It is a critical risk management strategy in a market where delays, cost escalations, and buyer uncertainty remain real threats.
Developers who overextend on thin margins are the most exposed in this cycle.
Use Finance to Grow, Not Just Fill Gaps
Development finance shouldn’t be reactive. The savviest developers treat it as a tool for growth and opportunity, not just a way to fund what’s already planned. By working with the right advisors and financiers, you can secure better sites, scale faster, and retain more equity in your projects. Structured well, finance can create leverage in the true sense. It can amplify your returns and your capacity to take on more ambitious projects.
With the Right Advice You Can Build So Much More
Smart finance isn’t just about numbers. It’s about control, flexibility, and long-term growth. With the right approach, you can build more than just property. You can build a business that lasts.
At HMW Finance, we work with developers across all stages of the project lifecycle — from site acquisition to completion — helping you structure finance that’s tailored to your strategy, risk profile, and long-term goals. Whether you’re navigating your first project or scaling a portfolio, our team brings deep market insight and commercial clarity to every deal.
