Residual Stock Funding
Senior-secured funding against completed but unsold stock, so a construction facility can be repaid without forcing a discounted clearance.
Overview
Australian private-credit managers treat residual stock as its own product, not as an afterthought to construction. Specialist lenders write a facility secured against completed, unsold inventory so the developer can run an orderly sales campaign after the build loan falls due.
The typical trigger is simple. A residential or commercial scheme reaches occupancy or title, but not every dwelling, lot or unit has settled. The construction lender wants out. Discounting the remaining stock to clear the debt destroys the project’s margin. A residual-stock facility refinances that debt against an independent as-is completed valuation, and is repaid as individual sales settle.
VERITAS HORIZON considers selective residual-stock facilities on the same senior-secured basis as the rest of the book: documented first-ranking mortgage security, deal-by-deal leverage, and an exit that does not rely on an optimistic price rebound. Interest, term and any partial-repayment mechanics are set transaction by transaction — we do not publish a residual-stock rate card.
The facility can sit behind a Veritas development loan or replace another construction lender at completion. What stays consistent is the purpose: time to sell at the intended price, capital released for the next site, and a repayment path tied to settled contracts rather than a fire sale.
Typical security
First mortgage over completed stock
Common use
Refinance, hold, orderly sell-down
Underwriting lens
As-is value and absorption
Exit focus
Settled sales, unit by unit
Uses
What this facility can fund
- Refinance a construction or development facility at completion so the build lender can be repaid without a clearance sale
- Hold completed apartments, townhouses, titled lots or commercial units while an orderly sales campaign runs
- Release equity from unsold stock to support the next site, working capital or a later stage of the same project
- Bridge the period between occupancy or title and the settlement of remaining exchanged or unsold contracts
Sponsors
Who this is for
- Developers with completed residential or commercial stock and a construction facility that is due or about to expire
- Sponsors who can table an as-is valuation, a stock schedule and a realistic sales or settlement programme
- Owners of titled or separately saleable units who need time to sell at the intended price rather than a discount
- Borrowers whose exit is settled sales, with proceeds applied to reduce the facility as each lot completes
Underwriting
How we assess a residual-stock facility
- Independent as-is completed valuation, not a hope value based on an untested price list
- Stock schedule, title or occupancy status, and whether remaining units can be sold separately
- Sales to date, exchanged contracts, enquiry depth and the credibility of the remaining campaign
- Approved loan-to-value on the remaining security, interest treatment and holding-cost capacity
- Sponsor equity, guarantees and the capacity to support a slower sell-down
- A repayment path through settled contracts, with partial reductions as individual lots complete
From enquiry to funding
Step 1
Stock and purpose briefing
Share the completed scheme, remaining inventory, the outgoing construction facility and the intended sales path.
Step 2
As-is review
We test completed value, absorption, leverage and whether settled sales can repay a senior-secured facility.
Step 3
Valuation and due diligence
Independent valuation, title and credit work are completed on the remaining stock and the sponsor.
Step 4
Credit approval and terms
Facility size, covenants and any partial-repayment mechanics are confirmed in writing.
Step 5
Documentation and security
Loan and mortgage documents are executed and first-ranking security is registered over the completed stock.
Step 6
Funding and sell-down monitoring
The outgoing facility is refinanced and sales, settlements and the repayment plan are monitored through the term.
Other services
View allServices
Investor Solutions
Eligible wholesale investors can access selected Australian private credit opportunities secured by tangible property and documented first-ranking mortgages.
Services
Borrower Solutions
Clear, structured and property-backed private credit for borrowers and funding partners, underwritten transaction by transaction in Australia.
Services
Landholding & Land-Bank Funding
Senior-secured funding for landholders who need time to plan, rezone, consolidate or wait for a development approval — without forcing a sale of the site.
Services
Residential Development Loans
Selective senior debt for residential projects that can be underwritten on feasibility, security and a documented path from construction to sale or refinance.
Services
Commercial Development Loans
Selective senior debt for commercial real estate where income, value-add or a documented lease-up can support a first-mortgage facility through to refinance or sale.
Eligibility
Discuss this facility
Residual-stock facilities are subject to credit approval, independent as-is valuation, satisfactory due diligence, documented first-ranking security and a defined sales exit. Terms are set transaction by transaction.
Contact us