$20M Residual Stock Loan Extends Sydney Sell-Down
When a construction facility reached expiry before every property had sold, the borrower needed additional time - not another construction loan.
Assetline structured a $20 million residual stock refinance that repaid the existing construction debt, released additional capital and provided the runway needed to complete the final sell-down of four completed duplexes in Sydney's Eastern Suburbs.
The Scenario
Construction had been completed successfully.
The borrower had delivered four completed duplexes in Sydney's Eastern Suburbs and had entered the final stage of the project - selling the remaining stock.
Their existing $17 million construction facility was approaching expiry before all properties had been sold.
To maximise the project's outcome, they required a lending solution that would:
Refinance the existing construction debt
Release additional capital
Fund holding costs during the sales campaign
Support marketing and property presentation
Provide sufficient runway to complete the sell-down
The exit strategy was clear. The funding structure simply needed to evolve with the project.
The Challenge
Construction finance is designed to support projects through the build phase.
Once construction is complete, developers often move into a completely different stage of the project, where the focus shifts to selling completed stock rather than funding construction.
That stage can require additional time, ongoing holding costs and greater flexibility than a traditional construction facility is designed to provide.
Rather than refinancing into another construction loan, the borrower required funding structured specifically for the residual stock phase.
The Assetline Solution
Assetline refinanced the existing facility into a $20 million residual stock loan designed around the project's exit strategy.
The facility included:
Refinancing the existing $17 million construction debt
Additional capital for marketing and project presentation
Funding for holding costs
A 12-month loan term aligned with the expected sales program
Capitalised interest throughout the loan term
By structuring a private lending facility around the timing of the sell-down rather than the construction program, the borrower gained the flexibility needed to maximise the project's outcome.
"Once construction is complete, the funding conversation changes. That's where private lending can provide the flexibility traditional facilities often can't."
Steven Filler
National Director - Private Lending
Deal Snapshot
Loan Amount | $20 million |
Product | Private Lending |
Purpose | Residual Stock Refinance |
Location | Sydney, NSW |
Security | Four completed duplexes |
LVR | 70% |
Loan Term | 12 months |
Interest | Capitalised |
Exit Strategy | Sale of remaining completed stock |
Why This Structure Worked
Residual stock lending requires a different approach to construction finance.
With construction complete, the emphasis shifts from delivery risk to the quality of the completed assets, market demand and the borrower's exit strategy.
By refinancing into a facility specifically designed for completed developments, Assetline provided additional working capital and time to complete the sales program without unnecessary refinancing pressure.
Common Scenarios We Fund
Assetline regularly assists brokers with:
Residual stock refinancing
Construction facility refinances
Completed apartment developments
Townhouse and duplex developments
Holding cost funding
Additional marketing capital
Development finance exits
Developers requiring additional runway before final sales
Frequently Asked Questions
What is a residual stock loan?
A residual stock loan is a short-term lending solution secured against completed but unsold properties within a development. It provides developers with additional time to complete the sale of remaining stock once construction has finished.
Can Assetline refinance an expiring construction facility?
Yes. Assetline regularly refinances completed developments where borrowers require additional runway beyond their existing construction finance facility.
Can additional capital be released?
Subject to assessment, Assetline may provide additional capital for holding costs, marketing, project presentation and other costs that support the project's exit strategy.
Is capitalised interest available?
Yes. Capitalised interest may be available, allowing borrowers to preserve cash flow throughout the loan term.
What types of completed developments can Assetline consider?
Assetline can consider completed residential developments including apartments, townhouses, duplexes and other residual stock opportunities, subject to lending assessment.
