Finance
Residual stock finance for developers
Residual stock finance is funding secured against completed but unsold apartments, townhouses or lots. It repays a maturing construction loan so the developer can keep selling instead of discounting. The loan is assessed on the finished stock and a realistic sell-down plan.
Written by Richard Goodwin, Founder and author, PrivetReviewed by Privet Team, Editorial review team, PrivetLast reviewed 23 October 2026
How residual stock loans work
Residual stock loans are usually first mortgages over the unsold lots. Each sale repays part of the loan at an agreed release price. Interest is often capitalised or prepaid because the stock may not produce income.
Who provides it
A residual stock lender may describe the product as residual stock property finance, residual inventory finance, unsold property development finance, unsold apartment finance or completed apartment development loans. The names differ; the structure is broadly the same.
What lenders assess
| Item | Why it matters |
|---|---|
| Occupancy certificate | Confirms the stock is complete |
| As-is valuation | Sets loan size per lot |
| Sales evidence | Tests price and demand |
| Sell-down plan | Shows how and when the loan clears |
| Developer track record | Indicates delivery and sales capacity |
Costs to model
Model interest, fees, marketing, holding costs and agent commissions against expected sale prices. The exit timeline tool helps test how long the sell-down could take.
For brokers
Brokers look for a residual stock lender for brokers who understands release prices, GST and settlement timing. See the completed stock sale scenario and development exit finance.
Frequently asked questions
Is this the same as development exit finance?
They overlap. Exit finance refinances the construction loan; residual stock finance focuses on funding unsold lots during sell-down.
Can I rent the unsold stock?
Some lenders allow it, which can change how they assess the loan. Confirm before signing.
What happens on each sale?
An agreed amount, the release price, is paid to the lender to discharge that lot.
Does GST affect the loan?
It can affect sale proceeds and cash flow. See the GST margin scheme tool and get tax advice.
Is Privet a residual stock lender?
No. Privet explains options and lets you send one enquiry to finance providers.
For brokers
Placing this type of deal for a client? Read private lending for brokers.
Related guides
- Development exit finance explained
- Construction and development finance
- Completed stock sale
- Land and residual stock loans
Glossary: practical completion, as is value, exit strategy
Run the numbers
Test cost and timing with the matching calculator before you speak to anyone. Then send one enquiry to finance providers.
Cite or share this guide
Privet (2026). Residual stock finance for developers. Retrieved from https://privet.com.au/finance/residual-stock-finance
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