In conversations between brokers, borrowers and lenders, discussions around private lending often begin with pricing. Interest rates, fees and leverage are typically the first points of comparison, and understandably so – they are tangible, easy to measure and simple to communicate.
However, across the development finance market, there is a growing recognition that pricing alone rarely determines the success of a project. More often, outcomes are shaped by how a transaction is structured, how it is managed through the life of the project, and how effectively challenges are addressed along the way.
A Changing Perspective on Risk
Development projects, by their nature, evolve over time. Construction programmes shift, costs can move, approvals take longer than expected, and market conditions may change between commencement and completion. These are not exceptions – they are part of the process.
As a result, the assessment of a funding proposal increasingly extends beyond feasibility metrics and into broader considerations around deliverability. This includes questions such as whether a structure is aligned with the realities of the build programme, whether there is sufficient flexibility to accommodate delays, and whether appropriate controls are in place to manage cash flow during construction.
These factors, while less visible than pricing, tend to have a more direct impact on project outcomes.
The Role of Structure and Early Engagement
There is also a growing emphasis on the role of early engagement between brokers, borrowers and lenders. Where discussions take place at an earlier stage, there is often greater opportunity to refine assumptions, identify potential risks and adjust the structure before positions become fixed.
Many lenders, including TierONE Capital, are increasingly engaging at this earlier point in the process, often through indicative funding views, to help brokers and borrowers assess alignment before progressing to more formal stages.
This approach tends to reduce friction later on and provides greater clarity around what is realistically achievable.
Execution Through the Life of the Project
While much of the focus in lending is placed on origination and approval, industry experience suggests that a significant portion of project risk emerges after settlement. During construction, the coordination of payments, progress claims and contractor activity becomes critical.
Even well-structured projects can encounter difficulties if cash flow is not aligned with actual progress, or if delays are not identified and addressed early. For this reason, there has been an increased focus across the non-bank lending sector on providing greater visibility and oversight during the construction phase.
At TierONE Capital, for example, this is supported through our internal Property Services Team, who work alongside borrowers and consultants to monitor progress and manage drawdowns. The intent is not to introduce additional layers, but to maintain alignment between funding and delivery as projects evolve.
Collaboration Across the Process
Another theme emerging across the market is the importance of collaboration between brokers, borrowers and lenders. Each party brings a different perspective, whether it is deal structuring, market insight, or delivery expertise. Outcomes tend to improve where these perspectives are aligned early and maintained throughout the process.
From a lender’s perspective, this often involves working closely with brokers to balance client objectives with credit parameters, and to arrive at structures that are both competitive and achievable. Maintaining clear and consistent communication throughout the lifecycle of a transaction is a key part of this process.
Looking Beyond Headline Terms
None of this diminishes the importance of pricing. It remains a key component of any funding decision. However, in the context of development finance, it is increasingly being considered alongside a broader set of factors, including certainty, flexibility and execution capability.
For many projects, the ability to settle on time, adapt to change and maintain momentum through construction can be just as important as the initial cost of funds.
A More Holistic View
As the market continues to evolve, there is a gradual shift towards a more holistic view of development finance, one that considers not only how a deal is priced, but how it is delivered.
For brokers and borrowers, this provides a useful framework when assessing funding options and engaging with lenders. And for lenders, it reinforces the importance of combining capital with practical, delivery-focused support both at the outset and throughout the life of a project.
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