Navigating private lending in times of uncertainty

The word “uncertainty” strikes fear in some financial institutions. That’s what I’ve learnt after 20 years through the ups and downs of property development finance. It’s a dirty word—people simply don’t like hearing it. “Uncertainty” is treated like a nasty rumour we shouldn’t talk about just in case we accidentally manifest it.

The reality is, our world at the moment—literally and on an industry level—feels uncertain.

Nonstop talk of interest rate rises, geopolitical volatility, fluctuating price of diesel affecting the supply chain… It’s easy to see why some of our competitors may be choosing to sit on their hands.

At Bowery Capital, we view the current climate differently.

We don’t see a market in retreat; we see a time of transition. Whether you’re a developer looking for capital or an investor looking for opportunity, the key to navigating today’s uncertainty isn’t found in a crystal ball. It’s found in a flight to quality and a commitment to commercial common sense.

Here’s what that means.

The new competitive front: banks vs. private lending.

One of the most surprising shifts we’ve seen recently isn’t actually in the economy—it’s in the banks. For years, major lenders were seen as being notoriously conservative, often requiring equity contributions that made projects unviable for many.

That’s changing. Banks are loosening their lending parameters on construction facilities, with high LVR and lower pre-sales hurdles – something that was unheard of in the past.

• To help developers meet bank requirements, the NSW Government launched a $1 billion Pre-sale Finance Guarantee (late 2025). This program allows the Government to “guarantee” up to 50% of pre-sales in qualifying projects, meaning banks can fund projects that would have previously been too risky or stalled by slow off-the-plan sales.
• When APRA introduced new debt-to-income caps on mortgage lending by ADIs in early 2026, it explicitly carved out construction loans for new dwellings — recognising that constraining development finance would work against housing supply goals.

What does that mean? Banks have massively stepped up their game. For experienced developers with strong balance sheets, this is an opportunity to access cheaper debt.

The bank answer isn’t always the best answer…

I’m not going to say it’s never the right answer… But, when you blend a bank’s senior debt with the 15–16% interest rate usually charged on the mezzanine debt required to fill the equity gap, the blended rate often lands exactly where a private stretch senior loan from Bowery sits anyway.

So, what’s the difference? With private lenders like us, you get the speed, the relationship, and the flexibility that a bank’s typical standardised credit policies simply cannot match. Private lenders aren’t just a source of funds; we’re your capital partner that remains nimble when the Big Four start to slow down.

A measured view of volatility.

We have to acknowledge the global happenings. We’re watching energy prices and interest rate speculation closely, and rising diesel prices haven’t yet caused a significant visible fracture that has put builders under immediate stress.

The lack of immediate stress is partly due to the National Fuel Security Plan (March 2026). The Federal Government’s move to secure a domestic diesel reserve has prevented the panic-buying or localised fuel shortages that typically precede a supply chain fracture. This means freight and logistics are, for now, still moving. While it is more expensive, the availability of fuel hasn’t been significantly compromised, keeping site activity business as usual, for now.

However, the situation has moved faster than many had anticipated. The fuel crisis has hit some construction inputs hard — PVC and other petroleum-based materials are already repricing sharply, and builders on fixed-price contracts are feeling the stress now, not later. But in our experience, this is what separates seasoned developers from the rest.

Prudent planning by developers and financiers is knowing that these increases are probably coming and preparing accordingly. As a solutions-based financier, Bowery is on the front foot when it comes to these matters.

In these times, Bowery’s measured lens focuses on three pillars.

1. The build-for-purpose mandate.

When we talk about a “flight to quality,” we aren’t talking about gold-plated taps or chandeliers full of crystals. We’re talking about suitability. Does the product match the local demand? Is it priced to meet the market, or is the developer holding out for a “yesterday price” that is no longer realistic?

Quality development means the right product for the right market at the right time.

2. The strength of the counterparty.

We’ve always maintained that who you partner with matters just as much as the deal itself. A good counterparty doesn’t disappear when a project hits a snag; they work with their project partner to find a solution. We look for developers with strong balance sheets and a track record of seeing projects through to the end. Our appetite to back these players remains as strong as ever.

3. The strategy of the exit.

For our investors, the most important question we ask is, “how do we get out?” As a private lender, we don’t need to have the same gaze as a property developer. To exit our facility, we don’t need to sell out an entire 15-townhouse project, for example. We may look at the market absorption and ask if the developer can sell, say, five. If they can sell enough to enable an exit to another facility or clear the debt, the investment is relatively sound from an exit perspective. We don’t look at projects through the optimistic eyes of a developer; we look at them through the pragmatic eyes of a lender.

Finding the “shots in the arm”.

While some States face headwinds (notably Victoria, where the current tax and regulatory landscape is making developers and landlords weary) we’re seeing incredible opportunities elsewhere.

South Australia continues to offer genuine value for money with a developer-friendly atmosphere, and Queensland remains a high-conviction region for us. In New South Wales, new planning laws allowing for increased height (and therefore yield) are providing a much-needed “shot in the arm” for projects that were previously stuck and are now viable.

Additionally, we can no longer treat commercial, industrial, or retail as catch-all categories. The Capital Foresight 2026 report (Green Street News) argues that sector-level themes are being replaced by asset-level excellence. Today, the winners are defined by specifics: where the building sits, who is inside it, and how effectively the property can grow its income.

The brick & mortar standard.

To our investors—we hear you.

It is natural for volatility to breed nervousness, but history is an excellent teacher. During the disruption of 2008, we saw a clear trend: when the world feels unstable, capital flows back to the tangible.

Investors return to brick and mortar because it is the cornerstone of the economy. It’s tangible, it’s understandable. And—when managed with the increasingly rigorous due diligence we pride ourselves on—it offers a level of certainty that paper assets cannot.

At Bowery, we’ve intentionally beefed up our property and due diligence teams. We aren’t interested in growth for the sake of growth. We’re interested in meticulous, responsible lending that takes appropriate care of our investors’ capital while supporting developers.

To the developers & brokers watching the headlines: Don’t be afraid of uncertainty.

In our experience, uncertainty is simply where the box-tickers fall away and the real opportunities emerge. It’s not about waiting for the storm to pass; it’s about having a partner who knows how to navigate it.

The right partner isn’t just a source of funds—it’s a team that understands the grit of a construction site and the nuance of a shifting market. We’ve seen these cycles before, and we know that it takes the right counterparty and a build-for-purpose strategy to find a path to success.

The path forward.

The landscape is shifting, but our mission isn’t.

Whether the banks are competing or retreating, and whether interest rates are rising or settling, our approach remains the same. We stay calm, stay commercial, and stay focused on the quality of the project and the person behind it.

If you have a project that needs a partner who understands the nuance of the current market, let’s have a conversation.