GRV Finance

Gross Realisation Value Finance
(GRV Loans)


A Gross Realisation Value Loan is a superior development finance facility that is a common choice among experienced property developers.

Challenges and restrictions faced by property developers when considering a major Bank for a construction loan facility include:

Minimum Presale Conditions:

Major Banks typically impose a greater level of debt coverage through presales well before the construction has even commenced.

Having such preconditions before approving the development loan facility for developers has a direct impact on both the timing and profitability of a developer’s project including:

  1. Land Holding Costs: It imposes limitations to getting a property development off the ground and therefore holding costs of the land can increase greatly.
  2. Greater Marketing Costs: Engaging a project marketing company typically attracts a fee as high as 8% of the purchase price compared with the typically 2-2.5% fee incurred by a local real estate agent.
  3. Reduced Selling Price: Quite often a new property buyer whether an investor or first home buyer, would better appreciate the completed dwelling finishes both internally and externally. This appreciation leads to greater prospects of buying the property and at the normal price compared to the reduced price typically experienced when selling off the plan.

Cross Securitisation

When dealing with major banks, property developers are often finding themselves being offered competitive finance then finding the bank in turn imposes cross collateralisation of other existing assets in the developers name including other investment properties or their own principle place of residence.

The banks do so to minimise their risk in the event that the new development does not proceed as planned and in the event of any fall out in the economy or even business partnerships among developers.

The Advantage:

While GRV Loans typically attract a higher interest rate and fees the benefits of the product far outweigh that of a traditional bank construction loan facility. The graph below demonstrates the key advantage of opting for a GRV Loan. With an end value of $9,000,000 of a development project one can see that the blue line representing the GRV product comes much closer toward the actual project costs when compared to the green line which is representative of what a major bank typically lends.

The advantages of GRV Funding

Explore your next property development project option through GRV Finance by contacting our development finance specialists obligation free. Call us now 1300 780 1961300 780 196

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