Property developers in Australia face a financing squeeze. Traditional banks have tightened lending requirements while construction costs continue to rise.

"We can't get viable deals," says Evans, a property developer with multiple projects in the pipeline. "The costs have risen so much that we can't actually get a feasible project off the ground."

This squeeze has pushed many developers to the brink. Some have entered voluntary administration or liquidation, unable to secure the financing needed to move forward.

Yet amid these challenges, a significant shift is occurring in how property development gets funded.

The Rise of Private Credit

Private credit in Australia has grown to approximately $40 billion, representing 2.5% of total business debt. This alternative financing pathway serves property developers with unique financing needs or irregular cash flows that struggle with conventional bank financing. Reserve Bank of Australia data confirms this trend.

For developers, private credit offers a trade-off. It's more accessible than traditional bank loans but comes at a higher cost.

"It's easier to get private credit, but the costs can. be higher," Evans notes. "And it's much more difficult to get equity investment from potential partners."

This trade-off has become increasingly relevant as traditional financing options narrow.

Research shows 70% of industry participants have significantly increased their use of private credit over the past five years. While private lending comes with higher costs, 95% of respondents believe the benefits make it worthwhile. These benefits include quicker decision-making, higher loan-to-value ratios, and more flexible terms, according to a Centuria Bass Credit study.

The Financing Bottleneck

The traditional property development process follows a familiar path: acquire a site, secure approvals, and obtain financing.

But financing creates a bottleneck that slows everything down.

"A big sticking point of getting a project going is acquiring the site and getting approvals. But the financing part is always difficult," explains Evans. "Unless you get the finance organised pretty well at the beginning, it makes it much more difficult to make the project move quickly."

This bottleneck becomes more problematic as market conditions tighten.

Many developers rely on a standard formula: secure 10-20% equity from partners, develop feasibility studies, then pitch to lenders. But rising costs have made this formula increasingly difficult to execute.

Technology Platforms Enter the Scene

Digital platforms have emerged to address these financing challenges. These platforms connect property developers directly with alternative financing sources, including private credit providers.

Commercial real estate marketplace platforms use proprietary algorithms to match borrowers with lenders who can make deals happen. This approach means property developers get exactly what they want while lenders only see deals they can quote, creating mutual benefits according to Finance Lobby.

These platforms offer two key advantages: greater transparency and access to more options.

"It can make the whole process much more transparent," Evans observes. "A lender can see if the deal is good because the borrower and sponsor are good companies. And the borrower can see what sources of capital are available to them."

The result? A smoother, faster financing process.

Overcoming Resistance

Despite these advantages, digital financing platforms face resistance from traditional industry players.

"Often the brokers are very threatened," Larkin notes. "It's hard work at the beginning because they're used to doing things in a particular way."

This resistance mirrors what's happening with modern construction methods. These new approaches can reduce costs by 30% and construction time by 50%, yet face pushback from established builders.

Change comes slowly in conservative industries like real estate and finance. But necessity often drives adoption.

"As it makes life easier for the people in the transaction, then they'll adopt it," Evans predicts. "There'll be a groundswell of people who take them up, as has happened with many other tech tools."

The Path Forward

For property developers navigating today's challenging market, digital platforms offer a promising path forward.

These platforms provide greater visibility into available financing options. They simplify the complex process of matching projects with appropriate funding sources.

"The opportunity is seeing more deals and being able to filter them easily," says Larkin.

For lenders, these platforms offer better-qualified leads and reduced risk through improved transparency.

Companies like Lendhaus are at the forefront of this transformation, creating digital marketplaces that connect property developers with global financiers while streamlining the entire loan management process.

Their approach aligns perfectly with what developers need: a simpler way to secure financing that doesn't sacrifice deal quality or certainty.

Practical Next Steps

Forward-thinking developers can take several steps to leverage these emerging platforms:

1. Explore digital financing marketplaces alongside traditional channels

2. Prepare comprehensive project documentation that highlights strengths and mitigates concerns

3. Consider how modern construction methods might improve project viability

4. Organise financing early in the project lifecycle to maintain momentum

5. Be prepared to educate traditional partners about the benefits of new approaches

The property development financing landscape continues to evolve. Those who adapt first will find opportunities where others see only challenges.

As Evans puts it: "I want to do more projects and more deals. So I like it."