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Strata Tip 65: Development financing – Pre-sales coverage

Most construction finance facilities contain conditions regarding pre-sales.  That is, the number of “off the plan” sales contracts that need to be achieved before the first, or another, drawdown can be made.  The banks are fairly sophisticated about this and will only count ‘arms length’, third party pre-sales.  To avoid embarrassment and delay, make sure you have more than you need before you invite the bank to check the pre-sales.