How to prepare a development feasibility for lender scrutiny
Most development feasibilities are built to convince the developer. Very few are built to survive a credit assessor. Those are different jobs, and the gap between them is where a lot of otherwise fundable projects lose momentum — not because the numbers are wrong, but because nobody can tell from the document whether they are right.
A feasibility submitted to a lender is not a sales tool. It is evidence, read by someone whose job is to find the assumption that breaks and who has no obligation to give you the benefit of the doubt. Preparing for that reader changes what you put in, what you show your working on, and what you stop hiding.
What a credit assessor is actually reading for
An assessor is not trying to work out whether your project is a good idea. They are trying to work out three things: whether the revenue is real, whether the cost is complete, and whether the timeline is achievable. Everything else in the document is context for those three questions.
That has a structural consequence. A feasibility that opens with a glossy summary and buries the inputs in a back schedule forces the assessor to go looking. One that leads with the assumption set, sources each material number and then presents the outcome reads as though the developer already knows where the pressure points are. That does not guarantee an approval — nothing does — but it removes the friction of an assessor rebuilding your logic from scratch.
A workable structure is: project and site summary; the approval position; the assumption register; revenue schedule by lot or unit; total development cost by category; funding structure and interest; the cash flow across the program; profit measured on cost and on revenue; and the sensitivity table. Nothing exotic. The discipline is that every number in the outcome traces back to a stated assumption.
Marketing feasibility versus finance feasibility
A marketing feasibility exists to justify a decision that has often already been made. It tends to use the top of the agent's appraisal range, an optimistic sales rate, a builder's early estimate rather than a priced contract, and a duration measured from an ideal start date that has already passed.
A finance feasibility is the same project modelled on what can be evidenced today. Revenue sits at the supportable end of comparable evidence, not the aspirational end. Construction cost comes from a signed contract, a quantity surveyor's estimate, or a builder's tender with a scope attached — and the feasibility says which. The program runs from a realistic commencement, not a hopeful one. If the two versions of your feasibility produce materially different answers, that difference is the actual risk in your project, and an assessor will find it whether or not you disclose it.
Make the assumptions explicit and defensible
The single highest-return change most developers can make is to put an assumption register at the front. One line per assumption: the number, the source, the date of the source, and who prepared it. Sale rates sourced to specific comparable settlements. Construction cost sourced to a named QS report or contract. Council and authority charges sourced to a current schedule or a written estimate. Statutory timeframes sourced to the relevant approval.
Undated evidence ages badly. A comparable from an earlier market, or a builder's rate card from a prior cost cycle, invites the assessor to discount the whole document. So does an assumption with no name against it. “Allowance” is not a source.
The line items that get tested first
- GST. State the basis you are modelling and be consistent. Whether the margin scheme applies to your structure and acquisition is a question for your accountant, not for a feasibility template — but the document must say which basis it assumes, and the revenue and cost lines must both follow it. Double-counted or silently omitted GST is a common reason a set of numbers stops reconciling.
- Selling costs. Agent commission, marketing spend, legal and settlement costs, and any incentives. A single blended line with no build-up reads as a plug.
- Holding costs. Rates, land tax, insurance, body corporate on completed stock, and security or site maintenance — modelled across the full period including the sell-down tail, not just the construction window. Stock that has not settled is still costing you money.
- Contingency. Show it as a deliberate, separately stated line calculated on construction cost, not a rounding adjustment buried in the total. An assessor who cannot find the contingency assumes there isn't one.
- Interest and facility costs. Interest should be modelled on drawn funds over the actual drawdown profile, with line fees, establishment costs and any extension assumptions shown. Interest calculated on the full facility from day one overstates cost; interest omitted entirely destroys credibility.
If you want a structured starting point for the cost and funding build-up, the development finance calculator sets out the categories in the order a credit reader expects to see them.
Sensitivity: what to move, and by how much
A sensitivity table is not decoration. It is the developer demonstrating that they have already asked the questions the assessor is about to ask. At minimum, sensitise revenue, construction cost, the sales absorption period, and the finance term — individually, and then in a combined downside case where more than one moves at once.
The point is not to prove the project survives everything. It is to show where the break-even sits and what the response would be. A feasibility that identifies the point at which the project no longer works, and pairs it with a plan, is more persuasive than one that shows a comfortable outcome under every scenario. The second one just tells the reader the scenarios were chosen carefully. To find that point quickly, the free development feasibility calculator shows the break-even sale price and how far prices can fall before the project stops making money.
The self-inflicted errors
These come up repeatedly, and all of them are avoidable:
- Revenue at the top of the appraisal range with no supporting comparable evidence.
- A feasibility that does not reconcile to the cost plan, the building contract, or the application itself — three documents, three different totals.
- Hardcoded numbers typed over formulas, so the model no longer recalculates.
- Land carried at contract price when the acquisition was structured, related-party, or settled long enough ago that the assessor will ask.
- A program that ignores approval conditions still outstanding. The Yarragon RFI case study shows how long a referral-authority process can genuinely run, even when managed well.
- No profit shown on both cost and revenue, leaving the assessor to calculate the less flattering one themselves.
- Version drift — the feasibility attached to the application is not the one the QS priced.
Preparation of this kind lets a package be assessed on its merits rather than its gaps. In the Moama bridging matter an evidenced package was assembled before the valuation was instructed; in the Altona North duplex the same rigour ran through delivery. Each describes one past transaction and is not a benchmark or an indication of what another project may achieve.
If you would like your feasibility reviewed the way a credit team will read it before you submit it, start with development finance advisory or get in touch.
This article is general information about business and investment-purpose finance only. It is not financial, credit, legal, accounting or tax advice, and you should obtain your own professional advice before acting.