Unsold units and a facility maturity date? Get an indicative answer within 2 business days.
- Indicative assessment within 2 business days, with settlement timed to your construction loan maturity
- Residual stock loans from $500K to $20M, sized on the as-is value of the unsold stock
- Developers, builders and investors with finished stock still to sell
- Unsold apartments, townhouses, duplexes, terraces and small lot subdivisions
- Full-doc (tax returns), low-doc or alt-doc (BAS, bank statements or an accountant's letter instead) and no-doc options across our 90+ lender panel
The building is finished. The construction loan is due. Some of the stock is not sold yet. Once the maturity date passes, many facilities move to default interest, and an extension usually comes with fees and tighter conditions. A residual stock loan replaces the construction facility with a loan secured over the unsold units, so you can keep selling at a fair price instead of selling under pressure. Lender appetite, loan limits and buyer settlement rates change with the market, so it helps to line up a residual stock lender well before the maturity date. Joseph Farhat and his team can help you do that.
Who we can help access finance
- Developers whose construction facility matures in the next few months while a handful of units are still on the market.
- Builders who developed their own townhouse project and need to clear the construction debt before starting the next job.
- Developers whose off-the-plan buyer could not settle, leaving a unit back on the market after completion.
- Developers already past the maturity date who are paying default interest and need a way out of it.
- Investors who would rather rent some units for a period than accept a discounted sale price today.
- Developers who want to release part of the equity in their finished stock towards the deposit on the next site.
- Self-employed developers whose own income is hard to document but whose finished stock is clear to value.
How Residual Stock Loans Work
A residual stock loan is a new facility secured over the completed, unsold units in your project. On settlement, the new lender pays out the construction lender, which then discharges its mortgage. From that point there is one loan over the remaining stock, a new term, and a sell-down plan agreed with the new lender at the start.
The loan is sized on the as-is value of the unsold stock, net of GST. On new residential premises the buyer withholds GST at settlement and pays it directly to the ATO, so the developer only receives the balance of the price. Lenders lend against that balance. Indicatively, lenders on our panel advance around 65% to 70% of the net value, depending on the location, the type of stock and how quickly comparable units are selling. That percentage is the loan-to-value ratio (LVR), the loan as a share of the property's value. Interest is often capitalised, meaning it is added to the loan rather than paid monthly, so the project is not drawing on your cash each month. Each unsold unit carries a share of the debt, called the allocated debt. When a unit sells, the lender wants a release price that is higher than that share, usually somewhere between 105% and 120% of the allocated debt, so the loan reduces faster than the security does.
Joseph Farhat and his team review the stock schedule, the sales evidence and the payout figure, then match the project to the right lender from our panel of 90+ bank, non-bank and specialist lenders. We are a finance broker, not a tax adviser. GST, the margin scheme and the tax on each sale are matters for your accountant, and it helps to speak with them before the loan is sized.
What Lenders Assess for Residual Stock Loans
As-is value net of GST
an independent valuation of each unsold unit, less the GST the buyer will withhold. This sets the loan amount.
Sales evidence
settled sales within the project and nearby comparable sales. Recent settled prices carry more weight than list prices.
Sell-down plan
how many units, at what prices, over what period. Lenders want a realistic timeline with some room in it.
Payout figure
the full amount needed to discharge the construction lender, including any default interest, extension fees and break costs.
Occupation certificate and defects
the project needs to be complete and able to be occupied, with any defect items identified.
Stock mix and location
a few units in a large building are assessed differently from a whole row of townhouses in a regional town.
Leasing
whether some units are tenanted, on what lease terms, and how that fits the sale plan.
The Residual Stock Loans Process: What to Expect
- Speak with Joseph Farhat and his team about the maturity date, the number of unsold units, the asking prices and the current payout figure. We will give you an honest read on whether the numbers are likely to work.
- Send the basics: the stock list with asking prices, any sales contracts, the occupation certificate, the latest loan statement and your financials or bank statements.
- We approach the lenders on the panel most likely to fund the stock at the LVR and release prices you need, and return with an indicative assessment, usually within 2 business days.
- The lender orders a valuation of the unsold units and issues a formal approval setting out the LVR, release prices, capitalised interest and the sell-down period. We go through it with you before you sign.
- On settlement, the new lender pays out the construction facility. As each unit sells, the release price goes to the lender until the loan is repaid, and the balance of each sale is yours.
Indicative Finance Options
| Lender Type | Indicative Rate | Max LVR | Typical Loan Range | Loan Term | Key Consideration |
|---|---|---|---|---|---|
| Bank | From ~7% p.a. | Up to 60% of as-is value, net of GST | $1M to $20M | 12 to 24 months | Full financials and a clear sell-down plan usually required |
| Non-Bank Lenders | From ~8.5% p.a. | Up to 65% to 70% of as-is value, net of GST | $500K to $20M | 6 to 24 months | Capitalised interest common; release prices set per unit; leasing considered |
| Private Finance | From ~1% per month | Up to 70% of as-is value, net of GST | $500K to $20M | 3 to 12 months | Available for unique scenarios |
Indicative figures only. Actual rates and terms depend on your project, financial position, property location, and lender assessment at the time of application. Rates are subject to change.
Why borrowers choose Settled With Joe for residual stock loans
We represent you, not the lender
Joseph Farhat and his team work for you from the first call until the last unit sells.
We work back from your maturity date
valuation, approval and settlement all have to fit before default interest starts, so the timetable is set on day one.
Release prices are negotiable
a release price of 105% and one of 120% can change how much of each sale you keep, and we compare them across lenders.
We know which lenders allow leasing
some will let you rent units while you sell, others want vacant stock. That decides which lenders are worth approaching.
One conversation, not a round of applications
each application costs time you may not have before the facility ends.
90+ lenders on one panel
bank, non-bank and specialist, so a project with strong sales evidence and full financials can go to a bank at a sharper rate, and a slower-selling project still has options.
Private finance for unique scenarios
where bank and non-bank lenders are not the right fit, we can introduce you to private finance options.
Usually no direct cost to you
as a broker we are typically paid by the lender on settlement.
An honest answer early
if your construction loan matures in the next few months, talk to us now and we will tell you what is realistically achievable before that date.
Frequently asked questions
What is a residual stock loan?
A residual stock loan is a loan secured over the completed but unsold units in a development. It pays out the construction facility and gives the developer more time to sell. The loan is sized on the as-is value of the remaining stock, net of GST. It is repaid as each unit settles, with the lender taking an agreed release price from every sale until the debt is cleared.
How much of the end value can I borrow?
Lenders size the loan on the current as-is value of the unsold units, not the original gross realisation value (GRV), what the finished project is expected to sell for. They also deduct the GST the buyer will withhold at settlement. Indicatively, lenders on our panel advance around 65% to 70% of that net figure, and banks sit lower. A valuation that comes in under your asking prices reduces the loan, so recent settled sales in the project help. Some lenders will also consider releasing part of the equity in the finished stock at the start, usually at a lower LVR and with closer review of the sell-down plan. Some developers put that towards the deposit on their next site; how you use the proceeds is a decision for you and your accountant. Joseph Farhat and his team will work through the numbers with you before you apply.
What release price will each sale need?
Each unit carries a share of the loan, called the allocated debt. The lender sets a release price for each unit, usually between 105% and 120% of that share. When the unit settles, the release price goes to the lender and the balance comes to you. A lower release price leaves more of each sale with you. A higher one pays the loan down faster. Lenders set it based on the stock, the LVR and the sell-down period.
Can I rent units while I sell down?
Often, yes. Some lenders on our panel allow units to be leased during the term, which can help where buyers are slow and the units would otherwise sit empty. Lenders look at the lease length, because a long lease can make a unit harder to sell to an owner-occupier. Some ask for the rent to go towards interest. Others want vacant stock only. Joseph Farhat and his team will tell you which lenders allow leasing before you sign any lease.
What sell-down timeline do lenders want?
Most lenders want a plan that shows the stock selling within the loan term, often 12 to 24 months, with an agreed number of sales by set points along the way. They test it against the sales rate in the project so far and in the local market. A plan with room in it is easier to approve than one built on the best case.
What if the residual loan will not cover the whole construction debt?
That gap needs to be closed before the new lender will settle. It might come from your own funds, from equity in another property, or from second-ranking finance. Where the gap is large, a different lender, a longer sell-down period, or selling one or two units before the refinance may change the numbers. If the business may not be able to pay its debts as they fall due, speak with your accountant or a registered insolvency practitioner first, then talk to us.
Can I get a residual stock loan with low-doc or no-doc?
Often, yes. Residual stock lending is assessed mainly on the finished units and the sales evidence, so several non-bank lenders will accept BAS, bank statements or an accountant declaration instead of full financials. No-doc options exist, generally at a lower LVR and a higher rate. Full financials usually open up the sharpest pricing.
Do you work with borrowers with bad credit?
Yes, we do. Defaults, arrears or a judgment do not rule you out of a residual stock loan, and we will not make you feel awkward about it. A listing often comes from a stretch of the build that did not go to plan, and it says little about the value of completed units ready to sell. Several lenders on our panel weigh the stock value and the sales evidence more heavily than the credit file, and will price for the risk rather than decline it. Telling us early lets us approach the right lender first, without extra enquiries on your file. Joseph Farhat and his team will tell you honestly what is achievable before you apply anywhere.
Why work with Settled With Joe to arrange your residual stock loan?
Because you have one conversation instead of a round of applications. Most of the people we help with residual stock loans are developers, builders and company directors working to something fixed: a facility maturity date, default interest that has already started, or a buyer who could not settle. Those situations are not unusual to us and there is no judgement in the conversation. What matters is the as-is value of the stock, the sales evidence and a believable sell-down plan. Our panel covers 90+ bank, non-bank and specialist lenders, so a well-documented project can go to a bank at a sharper rate, and there are still options when sales are slow or time is short. We are based in Sydney and work with developers Australia-wide. Joseph Farhat and his team will tell you honestly and early whether we can help and what can be done before your maturity date.
Do you give financial advice?
No. We do not guide you on your finances, nor give financial advice. We focus on outcomes and solutions of presenting your unique scenario to the right lender so you can access funding in a timely and compliant manner.
Do you help with residual stock loans outside Sydney?
Yes. Settled With Joe is based in Sydney and arranges residual stock loans Australia-wide, covering both metro and regional areas. We work with clients in Sydney, Melbourne, Brisbane, Perth, Adelaide, and Canberra, as well as regional areas including Newcastle, Wollongong, Geelong, Gold Coast, Sunshine Coast, and Toowoomba. Lender appetite for unsold stock varies by location, and LVRs are often lower where comparable sales are thin. Joseph Farhat and his team will identify which lenders on the panel are the best fit for your project.
