ACL 390611 | MFAA Member | Established 2005
Commercial Construction LoansDrawn Down Stage by Stage.
Building your own premises, extending what you have, or building to lease. A construction facility is not a lump sum. It is approved on two numbers, released against certified progress, and it will not grow if the build does. Getting that structure right before the contract is signed is most of the work.
15 minutes with a commercial specialist. Bring the plans, the contract or just the site address. We won’t approach a lender until you’ve approved it, and we charge you nothing at any stage. Lenders pay us a commission on settlement and we disclose it in writing before any work begins.
Intellect Finance – Commercial Construction Brokers
Independent since 2005 | ACL 390611What Is a Commercial Construction Loan?
A commercial construction loan funds the building or substantial refitting of commercial premises. It is approved as a total facility up front, then released in stages as the build progresses, with each stage paid only after an independent inspection confirms the work has actually been done.
That staged structure is the whole difference. A standard commercial property loan settles once and you own an asset from day one. A construction facility funds something that does not exist yet, so the lender is carrying delivery risk as well as credit risk, and it manages that risk by controlling when money leaves.
Two consequences follow that catch people out. Interest is usually capitalised during the build, meaning the loan pays its own interest and that amount consumes part of the approved limit rather than sitting outside it. And the limit does not move. If the project costs more than the facility was sized for, the difference is funded by you.
Common Situations
Why People Come to Us for a Commercial Construction Loan
Six projects account for most of the construction files we run. They are funded very differently from each other.
Building your own premises
Owner occupied is the most straightforward case, because the business behind the loan is also the tenant. Serviceability is assessed on your trading figures rather than on a lease that does not exist yet.
Extending or refitting what you own
Adding floor space, upgrading a fit-out or converting use. Often funded against existing equity as well as the works, which can be simpler than a ground-up build.
Building to lease out
Here the finished income is hypothetical, so lenders look hard at demand evidence and at any pre-commitment. A signed pre-lease changes the assessment materially.
Land now then build later
Two facilities in sequence rather than one. Buying the site first has its own assessment. See commercial lot loans for that stage.
Multi-unit or speculative projects
Once a project is built for sale rather than for use, it stops being construction finance and becomes development finance, assessed on realisation and total cost.
Detachable plant and equipment
Not everything belongs in the construction facility. Detachable plant and equipment is often cheaper financed separately through equipment finance.
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Joseph Sukkar
Principal Broker · ACL 390611
Who You’re Dealing With
Built on 25 Years in Australian Finance
Joseph Sukkar started in finance in 2000 and founded Intellect Finance in Penrith in 2005. Since then the team has arranged more than 6,500 loans for clients across Australia, from first homes to complex commercial and asset finance.
Commercial construction sits with Charbel, our Commercial & Complex Lending Specialist, and it is the kind of file where the useful work happens before the building contract is signed. Once that contract is executed, the contingency allowance and the drawdown schedule are largely fixed. Construction appetite varies more between lenders than on any other commercial product, so matching the project to one that actually funds this type of build is most of the value, along with planning the take-out at approval rather than at practical completion.
Part of Our 100+ Lender Panel
The names most people recognise are residential lenders. Much of what we arrange runs through funders that do not advertise to the public. Accreditation with a lender is not an endorsement by it, and which lender suits you is decided by your file rather than by who is on this list.
Haven’t Signed the Building Contract Yet?
That’s the right time to call. Fifteen minutes, no paperwork.How It Actually Works
The Lender Works to the Lower of Two Numbers
The lender values what the property will be worth on completion, and separately totals what the project will cost to deliver. It derives a limit from each and lends to the lower of the two. Everything else about a construction facility follows from that, and from the fact that the money is released only against certified progress.
End value and total development cost
Total development cost includes land, construction, professional fees, contingency and the interest capitalised during the build. Which of the two numbers binds tells you a great deal: if cost binds, the project is thin, and if value binds, the margin is there but the lender wants more of your equity in first.
Your equity goes in first
Most lenders require your contribution, whether cash or the value of land you already own, to be spent into the project before construction funds start flowing. The early part of the build is therefore funded by you, not by the facility.
Drawdowns are certified before they are paid
The builder claims, a quantity surveyor or panel valuer inspects and confirms what has actually been built, and only then is the stage released. That surveyor is engaged by the lender, not by you. An uncertified claim does not get paid whatever the building contract says.
The builder is assessed as closely as you are
The contract, the licence, the insurances, the builder’s financial capacity and their record on projects of this size and type. A strong borrower with an overcommitted builder is one of the most common reasons a construction file gets declined or heavily conditioned.
The limit does not move so overruns are yours
The facility is sized at approval. Variations, delays and price rises are funded from your cash unless the lender agrees to increase it, which means a fresh assessment at exactly the point in the project where you have least time. Contingency and a fixed price contract matter more than the rate here.
GST is paid out before it comes back
GST sits on progress claims as they fall due, and the credit is recovered afterwards through your BAS. That gap is a cash flow issue during the build, and lenders differ on whether the facility funds the GST component or expects you to carry it.
Checked August 2026. Facility limits, drawdown schedules, certification requirements and terms are set by individual lenders and are indicative only. The ATO states you can claim a GST credit where you intend to use the purchase solely or partly for your business and it does not relate to input-taxed supplies, the price included GST, you are liable to provide payment, and you hold a tax invoice for purchases over 82 dollars 50. See when you can claim a GST credit. Best Interests Duty scope is sourced from ASIC Regulatory Guide 273. We are not tax agents. Confirm your position with a registered tax agent or the ATO. Everything else on this page is described in the important information at the foot of the page.
We don’t publish rates, and we’d be cautious of anyone in commercial who does. What we can do is tell you which of the two numbers is binding on your project, and what that means for how much of your own cash goes in before the first drawdown. Ask us to look at the numbers.
The Honest Comparison
Do You Need a Construction Facility at All?
If you already hold equity, there is a simpler route that avoids certification, staged drawdowns and quantity surveyors entirely. It is not always the cheaper one.
Borrowing against existing security
- No staged drawdowns, no quantity surveyor, no certification delays
- You control when the builder gets paid
- Usually faster to arrange and cheaper to establish
- Limited by the equity you already have, not by what the finished building will be worth
- You carry the full interest cost from day one on money you have not spent yet
A progressive drawdown facility
- Sized on what the finished property will be worth, not only on today’s equity
- Interest accrues only on what has been drawn, not the whole limit
- Independent certification is a check on the builder as well as a hurdle for you
- 100+ lenders assessed, including second-tier, non-bank and private construction funders
- No fee to you at any stage, on any loan type, including no clawback fee
For a small refit, the simple route usually wins. If the works are modest relative to the equity you already hold, borrowing against existing security avoids a layer of cost, delay and administration that a construction facility brings with it, and we will tell you that rather than arrange the more complicated product. A construction facility earns its complexity when the project is large relative to your current equity, when the finished value is what makes the numbers work, or when carrying interest on the full amount from day one would be expensive enough to matter.
Ask Us Whether You Need the Complicated One
Tell us the works and the equity you hold. We will say if borrowing against existing security avoids a layer of cost you do not need. No obligation.The Difference
Construction Files Fail on Structure Rather Than Rate
The ones that go wrong were mis-structured before the first brick, usually by someone who treated a construction facility as a bigger version of a normal loan.
Structured Before the Contract Is Signed
The building contract, the contingency allowance and the drawdown schedule all affect what a lender will do. Once the contract is executed, most of that is fixed. The useful conversation happens before it, which is why we would rather see plans than a signed deal.
Construction Appetite Varies Wildly Across 100+ Lenders
Some lenders will not touch a ground-up build. Others do it every week and have a panel of surveyors ready. The gap between the two is far wider in construction than in any other commercial product, and a decline from one says nothing about the rest.
Always in Writing
Business purpose lending sits outside the consumer credit rules, so Best Interests Duty does not apply to a commercial construction loan. ASIC Regulatory Guide 273 limits that duty to credit regulated under the National Credit Act. We disclose in writing how we are paid before you proceed regardless.
The Exit Planned at the Start
A construction facility is short term. What replaces it on completion depends on the finished valuation and, on a leased property, the tenant secured. Planning that take-out at approval rather than at practical completion is what stops a finished building sitting on expensive short term debt.
The Process
What Happens and What We’ll Need
Construction is the most document-heavy commercial product we arrange, because the lender is assessing a project and a builder as well as a borrower.
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15 minutes
The project before the contract
What you are building, on what land, for what use, and roughly what it costs. No documents. You will finish the call knowing whether the project is fundable, which of the two numbers is likely to bind, and how much of your own cash goes in before the first drawdown.
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You gather
Project and business documents
More than a standard commercial application, because the project is being assessed alongside the business. We confirm which of these the chosen lender needs before anything is collected.
- Fixed price building contract
- Plans, specifications and permits
- Development consent or approval
- Builder licence, insurances and profile
- Full development cost schedule
- Two years of business financials and tax returns
- Evidence of your equity contribution
- Pre-lease or demand evidence where building to lease
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We handle
From lender selection through to approval
Construction appetite varies more than any other commercial product, so matching the project to a lender that actually funds this type of build is most of the value. The valuation covers both the current site and the projected end value.
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Through the build
Drawdowns then the take-out
We manage the drawdown requests and the certification cycle with the lender and the surveyor through to practical completion, then arrange the facility that replaces the construction loan once the building is finished and, where relevant, leased.
Track Record
Commercial Is Not a Sideline For Us
Most brokerages run almost entirely residential and treat construction as something to refer on. We have run a commercial desk alongside residential since 2005.
Related Options
If This Isn’t Quite Your Project
Construction sits between buying land and holding a finished building. These are the facilities either side of it.
Commercial lot loans
Buying the site or a strata lot first, before any build begins.
Development finance
Building for sale rather than for use. Assessed on realisation and total cost.
Commercial property loan
Buying a building that already exists, to occupy or to lease out.
Commercial property refinance
The take-out facility that replaces a construction loan on completion.
Equipment finance
Plant, machinery and detachable fit-out, often cheaper funded outside the build.
Every commercial facility we arrange
Back up to the full commercial finance range if none of these is it.
Tell Us What You’re Building.
We’ll tell you which number binds and what cash you need up front.Questions Answered
Commercial Construction Loan FAQs
The questions owners and investors ask us most often before signing a building contract.
What is a commercial construction loan?
A commercial construction loan funds the building or substantial refitting of commercial premises. Unlike a standard commercial property loan it is not advanced in one amount. The facility is approved up front and drawn down in stages as the build progresses, with each stage released only after an independent inspection confirms the work has been completed.
How is a commercial construction loan sized?
On two numbers rather than one. The lender takes a valuation of what the finished property will be worth on completion, and separately the total development cost including land, construction, professional fees, contingency and capitalised interest. It derives a limit from each and works to the lower of the two. Which one binds depends on the project.
How do drawdowns work on a construction loan?
In stages, and only after certification. The builder claims for completed work, a quantity surveyor or the lender’s panel valuer inspects the site and confirms what has actually been built, and the lender then releases that stage. The surveyor is engaged by the lender, not by you, so a claim that has not been certified will not be paid regardless of what the contract says.
Do I need to contribute my own money first?
Usually yes. Most lenders require the borrower’s equity, whether cash or the value of land already owned, to be spent into the project before construction funds begin flowing. That means the early part of the build is funded by you. Planning cash flow on the assumption that the loan starts on day one is one of the most common mistakes we see.
What happens if the build costs more than expected?
The facility is sized at approval and does not automatically grow. Variations, delays and cost increases are funded by you unless the lender agrees to an increase, which requires a fresh assessment and takes time you may not have mid build. This is why a contingency allowance and a fixed price contract matter more here than the interest rate does.
Does the lender assess my builder as well?
Yes, closely. Lenders review the building contract, the builder’s licence and insurances, their financial capacity and their track record on projects of similar size and type. A strong borrower with a weak or overcommitted builder is a common reason for a construction application to be declined or heavily conditioned.
Can I claim the GST on construction costs?
Where the ATO’s conditions are met you can claim a GST credit. Those conditions are that you intend to use the purchase solely or partly for your business and it does not relate to input-taxed supplies, the price included GST, you are liable to provide payment, and you hold a tax invoice for purchases over 82 dollars 50. The credit is recovered after payment, so it is a cash timing issue during the build. Confirm your position with a registered tax agent.
What happens to the loan when construction finishes?
Most commercial construction facilities are short term and are refinanced on completion into a standard commercial property loan, often called a take-out. Arranging that exit should be part of the original plan rather than something addressed at practical completion, because the terms available depend on the finished valuation and, where the property is leased, on the tenant secured.
Visit Us
Penrith Based.Clients Australia-Wide.
Penrith is our head office and the one you can walk into without an appointment. We also meet clients at Parramatta and in the Sydney CBD by arrangement. Construction files run by phone, email and video through the build, so we work with builders and owners in every state.
Ready When You Are
Talk to Us Before You Sign the Contract.
Fifteen minutes with a commercial specialist. We’ll tell you whether the project is fundable, which of the two numbers is binding, how much of your own cash goes in before the first drawdown, and what should replace the facility when the build is finished. If a simpler facility would do the job, we’ll say so. Penrith based, clients Australia-wide. Intellect Finance Pty Ltd, ACL 390611.
Business purpose lending sits outside the consumer credit framework, so Best Interests Duty does not apply to it. We disclose how we are paid before you proceed on every transaction. Nothing on this page is credit assistance, financial advice, tax advice or an offer of credit, and no outcome is guaranteed.
Intellect Finance Pty Ltd | Australian Credit Licence 390611 | MFAA Member | AFCA Member
Important information General information only. Not credit assistance or an offer of credit. We charge you no fee. Every caveat and source on this page is collected here. Tap to read.
General information only. The content on this page is general in nature and does not take into account your objectives, financial situation or needs. It is not credit assistance, financial advice, legal advice or tax advice, and it is not an offer of credit. You should consider whether it is appropriate for you and seek your own advice before acting on it.
Nothing here is a guarantee. Loan approval, borrowing capacity, interest rates, loan to value ratios, valuations, timeframes and eligibility are determined by individual lenders and by independent valuers, not by us. Facility limits, drawdown schedules, certification requirements and terms are set by individual lenders as well, and vary with the project, the contract, the builder and the strength of the application. Certification is carried out by an independent surveyor engaged by the lender, and timeframes vary with the project, the builder and the certification cycle. They differ between lenders and change over time. Any figure, range or timeframe on this page is indicative and is not a quote, an offer, a statement of what any particular lender will do, or a prediction of your outcome.
Business purpose lending. Credit provided wholly or predominantly for business purposes is not regulated consumer credit, and the Best Interests Duty and responsible lending obligations under the National Consumer Credit Protection Act 2009 do not apply to it. We disclose how we are paid in writing before you proceed on every transaction regardless.
Tax and legal. GST, stamp duty, land tax and the tax treatment of any ownership structure depend on your circumstances and on how the contract is written. We are not tax agents, accountants or solicitors. Confirm the position with a registered tax agent, the Australian Taxation Office, your accountant or your solicitor before acting.
How we are paid. Intellect Finance does not charge borrowers a fee for arranging finance, and does not charge a clawback fee where a loan is discharged early. Lenders pay us a commission on settlement. The basis of that commission is disclosed to you in writing in our Credit Guide before any credit assistance is provided.
Third-party information. Where this page refers to government schemes, regulatory settings, tax treatment or lender policy, that information is sourced from the relevant authority and was correct to the best of our knowledge at the date shown on this page. Those rules change, sometimes without notice. Always confirm the current position with the issuing authority or with us before relying on it.
Found something wrong? If you believe anything on this page is inaccurate or out of date, tell us at joe@intellectfinance.com.au and we will review and correct it.
Intellect Finance Pty Ltd | Australian Credit Licence 390611 | MFAA Member | AFCA Member