Scenario
Residual Stock: Refinancing Out the Senior Lender
When a development reaches practical completion with units unsold and the construction lender wants out, residual stock finance repays the senior facility and buys time for a proper sales campaign. Vía Private lends $1,000,000 to $20,000,000 at up to 70% of the as-is value of the remaining stock, over 6 to 36 months.
Who this suits
- ✓A developer at practical completion with a handful of units unsold, typically 2 to 8
- ✓A project where the construction lender’s repayment timeline is forcing a premature or discounted selldown
- ✓A market where running a 6 to 12 month sales campaign would achieve materially better prices than a forced sale
- ✓A company or trust borrower with a corporate trustee, holding completed stock
How it typically runs
Step 1
Stock valued as completed units
Each remaining unit is independently valued at its current as-is market value. The facility is sized at up to 70% of the aggregate value of the stock.
Step 2
Senior facility repaid
Vía Private takes a first registered mortgage over the unsold units and advances funds to discharge the existing construction or senior facility. The time pressure from the prior lender ends at settlement.
Step 3
Sales campaign runs the loan down
The developer runs a measured sales campaign. As each unit settles the facility reduces, and when the final unit sells the loan is repaid and discharged.
What we need for indicative terms
We aim to give indicative terms within 24 business hours of a complete submission.
- ✓Project address and confirmation practical completion has been reached
- ✓Schedule of remaining units with current as-is values (valuation or contract evidence)
- ✓Existing senior facility details: lender, balance, and repayment deadline
- ✓Loan amount requested and proposed term
- ✓The proposed sales and marketing strategy for the remaining stock
- ✓Borrower entity structure (company or trust with corporate trustee)
Common questions
When does residual stock finance become available?
At practical completion. Vía Private does not fund construction risk, so the facility is only available once the project is complete and the remaining units can be valued as finished stock at as-is market value.
How is the lending amount worked out?
An independent valuation is commissioned for each remaining unit at its current as-is market value, and up to 70% LVR is applied to the aggregate value of the remaining stock. Facilities run from $1,000,000 to $20,000,000 over 6 to 36 months.
What happens as units sell?
The facility reduces as each unit settles, and when the last unit sells the loan is repaid and discharged. A credible sales timeline is required at the outset; terms are not extended indefinitely.
Can the facility sit behind the existing construction loan?
No. Vía Private takes first mortgage security over the residual units, so the existing registered mortgage is discharged as part of settlement; the residual stock loan repays the senior facility.
Have a scenario like this?
If the senior lender is pressing for repayment on completed stock, submit the scenario with the unit schedule and we will respond with indicative terms within 24 business hours.