The "Retained Stock" Finance Strategy: Unlock Developer Profits Without Selling Out Cheap
- Team CapStack
- 25 minutes ago
- 4 min read
Don’t rush to sell your final units to pay off the bank. Learn how Retained Stock Finance (Residual Stock Loans) can release your equity, reduce your holding costs, and fund your next project while you sell at premium prices.
You’ve reached the finish line. Practical completion is done, titles are issued, and the project looks spectacular.
But now the clock starts ticking.
Your construction facility - expensive, short-term, and designed for risk - is due for repayment. You’ve sold 50–70% of your units, but the remaining stock represents your actual profit margin. If you’re pressured to repay the lender quickly, you lose negotiating power. Buyers know it, and discounts creep in.
There is a smarter option: Retained Stock Finance (also known as a Residual Stock Loan).It is one of the most effective ways for Australian developers to preserve profit, free up cash flow, and take control of their sell-down strategy.
What Is Retained Stock Finance?
Retained Stock Finance is a specialised commercial loan that allows developers to refinance unsold units (residual stock) once a project reaches completion.
Unlike a construction loan which is priced for high risk, a retained stock facility is priced against a completed asset, meaning:
Lower rates
Longer terms
More flexibility to sell down stock at optimal prices
The new facility repays the construction lender, releases trapped equity, and buys you the one thing every developer needs: time.
Why Smart Developers Use Retained Stock Finance
1. Maximise Sale Prices (Avoid the Fire Sale)
When a lender’s repayment deadline is looming, buyers can sense urgency. They negotiate harder, push for discounts, and chip away at profit you spent years creating. Retained stock finance removes that pressure and lets you hold firm on price.
2. Unlock Equity for Your Next Project
Your final unsold units hold a significant portion of your equity. Instead of waiting 6 -12 months to realise it, a residual stock loan advances that equity upfront.
Fund your next DA
Secure your next site
Keep your development pipeline moving
3. Reduce Your Cost of Capital
Construction loans are priced for peak risk and therefore peak cost. Once the project is complete and income-producing (or close to it), the risk profile drops. Residual stock loans often price significantly cheaper, lowering monthly interest and improving your cash position.
4. Increase Tax & Investment Flexibility
Some developers choose to hold part of their stock long-term. A retained stock facility allows you to:
Rent out units to cover interest
Generate passive income
Capture long-term capital gains
Benefit from depreciation and tax planning flexibility
How the Process Works (Step-By-Step)
Valuation Instruction A valuation is ordered on either: a “one-line” basis (bulk value), or individual unit basis (usually higher). CapStack works hard to ensure that the correct methodology is used, to protect your LVR and maximise borrowing.
Facility Structuring Loans typically range from 65%-80% LVR depending on location, stock type, and quality, but other factors may allow these numbers to be increased.
Payout of Construction Debt The retained stock loan repays your current debt.
Equity Release If the new loan exceeds the outgoing debt, the difference is released to you, cash in hand.
Sell-Down & Debt Reduction As units sell, proceeds reduce the loan until it is fully repaid.
Why Developers Choose Capstack
Your end-of-project finance strategy is too important to leave to chance or to a lender who may be fatigued by the end of the construction cycle.
CapStack approaches retained stock finance with a structured, competitive, and valuation-led mindset.
1. We Create Competition
We leverage relationships with 70+ bank and non-bank lenders, across the spectrum, knowing exactly which lenders are aggressive right now on LVRs, rates, and turnaround times.
2. We Move Fast
If your construction facility expires in 30–45 days, you can’t afford slow. We aim deliver indicative terms within 48 hours and move to settlement as quickly as possible, depending on valuation speed.
3. We Understand the Developer Mindset
CapStack isn’t just a finance brokerage, we operate with a developer’s commercial mindset. We understand cash flow cycles, pre-sales dynamics, valuation pressure points and the realities of gearing a multi-stage pipeline.This means our advice isn’t theoretical. It’s practical, strategic, and commercially aligned with how developers actually grow their business.
4. We Structure Deals for the Long Game, Not Just the Exit
Residual stock finance is not just an end-of-project facility it’s a stepping stone to your next acquisition. Capstack structures facilities that:
Preserve your borrowing capacity
Support the next site purchase
Strengthen your lender relationships
Improve your long-term capital strategy
The Bottom Line for Developers
Your profit isn’t real until it’s in your bank account.Retained Stock Finance gives you the runway to sell strategically—not desperately.
Time is money. Retained stock finance buys you both.
FAQs: Retained Stock Finance
Q: What LVR can I expect? Most lenders offer 65%–75% of completed value (ex-GST), this can change in either direction depending on factors such as the client background, asset and location.
Q: Can I lease out the units? Yes. Rental income can improve serviceability and is often preferred by lenders.
Q: Are residual stock loans cheaper than construction loans? Generally, yes. The reduced risk of a completed asset usually results in lower interest rates.
Q: How fast can Capstack arrange finance? Indicative terms in 48 hours. Settlements as soon as possible, depending on valuation and lender timeframes, and how quickly we can compile the required information.
Ready to unlock the equity in your finished project?
Speak with the CapStack team for a confidential review of your retained stock strategy and valuation options.Your next project could begin sooner than you think.
About Capstack
Capstack is a forward-thinking commercial finance advisory specialising in development funding, structured debt, and creative capital solutions for property developers and investors across Australia. With deep market knowledge and strong relationships across more than 60 bank and non-bank lenders, we pride ourselves on delivering tailored finance strategies that unlock value, accelerate project pipelines, and support long-term growth.
Whether you’re acquiring land, funding construction, or refinancing completed stock, Capstack acts as a true capital partner bringing clarity, competition, and confidence to every transaction.
Ready to strengthen your capital strategy? Contact Capstack today for expert guidance and customised financing options for your next project.