POST-CONSTRUCTION
Residual Stock Finance, Explained.
Residual stock finance is the loan that bridges between a completed development and the final sale of every unit in it. The construction facility has matured, but you still have unsold apartments, townhouses, or lots on the books, and you do not want to fire-sale them into a soft market just to clear the senior debt. This is what residual stock finance solves.
What it actually is
Residual stock finance is a property-secured term loan against completed, untenanted, unsold dwellings inside a project you've just built. The proceeds repay the construction facility (which is typically expiring), release any held equity back to the developer, and give you a 12-24 month runway to sell remaining stock at full retail price rather than at an off-the-plan or distressed discount.
It is sometimes also called 'completed stock finance' or 'completion finance.' Blackfort offers it as part of our residual stock product.
How a lender sizes it
The headline number is loan-to-as-is-value of the unsold stock, on a 'gross realisation less selling costs and GST' basis. Typical Australian non-bank residual stock loans sit at up to 70% of that net realisation, with capitalised interest preserved inside the facility.
The lender will also look at the absorption rate (how many units per month can realistically settle), the spread of buyers (owner-occupier vs investor), and any pricing pressure from competing stock in the same suburb.
When residual stock finance is the right call
Three classic situations. First, your construction facility is maturing and not enough units have settled to clear it - residual stock finance refinances the senior debt and resets the clock. Second, you want to release trapped equity from a completed project so you can fund the next acquisition without waiting for every unit to sell. Third, you are deliberately holding stock for a price recovery or a rental yield strategy.
What gets you a better number
A clean QS report at completion, an independent valuation that supports your realisation expectations, and evidence the units are genuinely settlement-ready (occupation certificates, strata registration, working services). A realistic, suburb-comparable sales-rate assumption helps - optimistic absorption rates tend to trigger a tighter LVR, not a higher loan.
If you have a project nearing completion and want to test what a residual stock facility looks like for it, the fastest path is to enter the project address on the homepage and run indicative terms.
Have a deal in mind?
Enter a site address and we'll generate indicative terms in minutes.
Get instant terms →