TRANSIQUE | STRUCTURED DEBT INSIGHT

Real estate funding is not one product

A developer seeking ₹75 crore to acquire land and a developer seeking ₹75 crore to complete a project that is 75% built are asking for the same amount of debt. To a lender, they are two different transactions.

The first has little or no project cash flow, carries approval and development risk, and depends on what the land can become. The second may already have ₹200 crore of project cost incurred, ₹150 crore of customer collections, ₹100 crore of balance receivables, ₹80 crore of unsold inventory and a cost to complete that can be measured and certified.

The amount is identical. The source of repayment, the lender universe, the security structure, the pricing and the acceptable leverage are not.

That is why real estate debt should be analysed by project stage. The question “Who is funding real estate at present?” is too broad to produce a term sheet. The question that does is: “Who can finance this project, at this stage, against these cash flows and this security?”

This article maps real estate funding in India by stage: land and pre-development funding, approvals and pre-launch funding, construction finance, mid-construction enhancement and takeover, last-mile funding, inventory funding and lease rental discounting (LRD). It sets out what lenders examine at each stage, how RERA and the RBI project finance framework shape the structure, the indicative cost of each pool of capital, and what a developer should have ready before approaching the market.

The real estate funding lifecycle

A real estate project passes through up to seven funding stages, and the debt instrument can change at each one:

1. Land acquisition
2. Approvals and pre-development
3. Project launch and early construction
4. Mid-construction
5. Last-mile or near completion
6. Completed unsold inventory
7. Stabilised leased asset (commercial and retail projects)

A project may begin with structured acquisition capital from an NBFC or a private credit fund, move into construction finance from a bank or housing finance company (HFC) once approvals are in place, refinance during execution, use inventory funding after completion and, if the asset is leased, migrate into lease rental discounting.

The objective is to move the project into cheaper and more appropriate pools of capital as project risk reduces. Each transition usually lowers the cost of debt by several percentage points and lengthens the tenor. A loan raised against bare land is priced for the risk that the project may never get built. If the developer keeps that same loan running through construction and completion, the project keeps paying for a risk it no longer has. Once approvals are in place and sales have started, the same project qualifies for cheaper debt, and the developer should move to it.

Real estate funding universe by project stage

The table below maps the usual funding requirement, the structures lenders evaluate, the lender universe and the indicative cost and tenor at each stage. Pricing bands are indicative as at October 2026 for mid-market transactions of ₹25 crore and above; actual pricing moves with the policy rate, lender liquidity, promoter track record, security cover and the project’s sales position.

The table is an indicative financing map, not a lender eligibility matrix. Actual structures depend upon project status, end use, title, approvals, cash flows, leverage, security and individual lender policy.

Stage 1: land acquisition and pre-development funding

Land funding is the most structurally difficult stage of the real estate funding cycle, because the asset has value but the project has no cash flow.

Suppose a developer is acquiring land for ₹100 crore. ₹35 crore has been or will be funded through promoter contribution and another ₹65 crore is required to conclude the acquisition. The land may be worth considerably more than ₹100 crore after aggregation or approvals. That does not create a conventional bank loan.

Who can and cannot fund land

Under Chapter VIII of the Reserve Bank of India (Commercial Banks – Credit Facilities) Directions, 2025, commercial banks may extend project-linked term loans to private builders, but they are not permitted to extend fund-based or non-fund-based facilities to private builders for acquisition of land, even where the land forms part of a housing project. This is a restriction on end use, not on product: within a construction finance facility, the land cost has to be met from promoter contribution or other sources, and the bank funds construction, approvals, development charges and interest during construction. The same Directions require banks to value land, whether as prime security or as collateral, at its current market price and not at the discounted value of the developed property, which limits the headroom a bank can give on any land-backed facility.

The bank restriction extends to the bank’s group. Under the Reserve Bank of India (Commercial Banks – Undertaking of Financial Services) Directions, 2025 and the Reserve Bank of India (Non-Banking Financial Companies – Undertaking of Financial Services) Directions, 2025, an NBFC or housing finance company that is a group entity of a scheduled commercial bank must observe the lending restrictions that apply to its parent bank, and therefore cannot lend to private builders for acquisition and development of land.

Standalone NBFCs in the RBI’s middle and upper layers may fund land, within limits set by the Reserve Bank of India (Non-Banking Financial Companies – Credit Facilities) Directions, 2025. Commercial real estate is a sensitive sector: the board must fix an internal ceiling on commercial real estate exposure and a specific sub-limit within it for land acquisition, and a real estate loan may be disbursed only after the borrower has obtained the statutory permissions required for the project at that stage. A facility that qualifies as project finance under the project finance chapter of the Credit Facilities Directions, whether from a bank or an NBFC, cannot be disbursed until at least 75% of the project land is available and the applicable clearances are in place, so a project finance loan cannot itself fund the land purchase. Land funding is therefore structured as corporate or structured debt, repaid from a refinance or an alternate source, and not as a project loan.

A developer searching for a “bank loan for land purchase” will therefore keep meeting the same answer, whatever the land is worth. The financing universe at this stage is standalone NBFCs with headroom under their land sub-limits, structured credit providers, and private credit funds and AIFs, which are regulated by SEBI and sit outside these lending restrictions. Appetite and pricing vary widely from one institution to the next, and both reflect a smaller pool of capital than is available at any later stage.

How land is usually funded

• Promoter contribution, which remains the largest single source of land capital and is counted by every subsequent lender at documented cost.
• A term loan or non-convertible debentures (NCDs) issued by the project company or SPV, subscribed by a standalone NBFC under its land sub-limit, with the coupon often part-serviced and part-accrued until collections begin.
• NCDs subscribed by a private credit fund or AIF at project or holding company level, usually with a redemption premium, where the leverage or structure does not fit NBFC policy.
• Deferred consideration agreed with the landowner, or a joint development agreement under which the landowner retains a share of saleable area and the land is never purchased with debt.
• A loan against property or lease rental discounting on another group asset, with the proceeds applied to the land.

How land funding is usually structured

• Loan-to-value of about 40–60% of the land’s documented or independently assessed value, with the balance funded by the promoter.
• Security comprising a mortgage over the land, a pledge of the SPV’s shares, promoter personal guarantees and, where available, a charge on an alternate group asset.
• Tenor of 12 to 36 months, with the exit pre-agreed: refinance into construction finance once the licence, plan sanction and RERA registration are in place, with the land loan repaid from promoter funds or launch collections, or repayment from the sale of an alternate asset.
• Disbursement conditioned on the approval status the lender’s policy requires, which for most NBFCs means at least the change-of-land-use or licence application on file.
• In joint development agreements, the lender finances the developer’s security deposit or upfront payment to the landowner against a charge on the developer’s share of saleable area.

What a lender will examine

The last row decides the transaction. Land value creates security; the project journey creates repayment. A ₹150 crore valuation by itself does not explain how a ₹60 crore loan will be repaid in eighteen or twenty-four months.

Stage 2: approvals and pre-launch funding

There is often a gap of twelve to twenty-four months between acquiring land and reaching the stage at which conventional construction finance becomes available.

During this period the developer spends on licence and approval fees, external and internal development charges, conversion or change-of-land-use premiums, consultants, design, statutory deposits and early site development. In licensed-colony markets such as Gurugram, external and internal development charges are payable per acre in instalments from the date of licence, so a material part of this outlay falls due before launch. The project has value but no customer cash flow.

The financing case at this stage rests on six things: title, promoter track record, approval visibility, project economics, security and an identifiable exit.

What the RBI framework requires before disbursement

The project finance chapter of the Reserve Bank of India (Commercial Banks – Credit Facilities) Directions, 2025, and its counterpart in the Reserve Bank of India (Non-Banking Financial Companies – Credit Facilities) Directions, 2025, set the conditions a lender must satisfy before it disburses a project finance exposure to a commercial real estate (CRE) or CRE-residential housing (CRE-RH) project:

• Financial closure must be achieved and the original date of commencement of commercial operations (DCCO) documented before disbursement.
• All applicable approvals and clearances required at that stage must be in place.
• At least 75% of the land required for the project must be available to the borrower before disbursement.
• Disbursement must be aligned with the stage of completion and with the promoter’s equity infusion, as specified in the loan agreement.

For a residential project this usually means the licence or development permission, the sanctioned building plan, environmental clearance where the built-up area crosses the statutory threshold, and RERA registration are all in hand before the first construction finance drawdown.

At pre-launch stage these conditions cannot be met. The approvals are the very thing being paid for, there is no completion date to document and no construction to certify. A loan at this stage therefore cannot be a project loan, and conventional construction finance from banks, HFCs and NBFCs is not available, however strong the land. What is available is structured debt: a loan or NCDs secured on the land and usually on an alternate group asset, underwritten on the security and the promoter rather than on project cash flows, and repaid from the construction finance that replaces it once approvals and RERA registration are in place, or from launch collections. It comes from standalone NBFCs and private credit funds, not from banks or bank-group lenders.

The difference between “land acquired” and “financeable project” is therefore wide, and pre-launch capital, where it is raised at all, is priced closer to land funding than to construction finance.

Stage 3: construction finance, when the project starts financing itself

Once the project has approvals, RERA registration and a launch, the funding universe widens to banks and HFCs, and the cost of debt falls.

Construction finance is sized on a combination of project cost, promoter contribution, construction progress, sales, customer collections, balance receivables, unsold inventory and projected project surplus. Unlike an ordinary corporate term loan, repayment is linked to the project itself. The project finance chapter of the RBI’s Credit Facilities Directions treats an exposure as project finance only where at least 51% of repayment is expected from cash flows generated by the financed project and all lenders have a common agreement with the borrower.

A simplified construction finance position

A lender will not look at ₹350 crore of unsold inventory and sanction ₹100 crore. It will test whether the remaining cash-flow waterfall can complete construction, service the debt and still leave a project surplus. In practice three tests run in parallel:

1. Cost-to-complete test: do the ₹100 crore of debt, the ₹190 crore of sold receivables that fall due before completion and the collections from further sales together cover the ₹275 crore of balance cost, with a cushion for escalation?
2. Cover test: do balance sold receivables plus unsold inventory, both valued at achieved rather than brochure prices, give the lender 1.5 to 2.0 times cover over the facility?
3. Surplus test: after the facility is repaid, does the project still leave a surplus large enough to absorb a slower sales velocity or a price correction?

What drives construction finance capacity

• Cost incurred versus cost to complete, certified by the lender’s independent engineer
• Promoter equity already brought into the project, counted at cost
• Sales achieved, collection efficiency and balance customer receivables
• Unsold inventory and the achieved selling price against projected pricing
• Monthly sales velocity, which is the number lenders now watch most closely
• Construction timeline and the realism of the DCCO
• Existing lender exposure and the charges already created
• Project surplus after debt repayment

A developer with ₹500 crore of unsold stock but poor sales velocity is often less financeable than a project with ₹250 crore of inventory that sells steadily every month. Realisable cash flow matters more than headline gross development value.

Security, disbursement and covenants

The security package for construction finance is usually a mortgage over the project land and unsold units, hypothecation of receivables from sold units, an escrow or trust-and-retention account through which all customer collections pass, a pledge of the project company’s shares, promoter personal guarantees and, where the project company is an SPV, a corporate guarantee from the flagship entity.

Disbursement is tranched against construction progress certified by the lender’s engineer, and the loan agreement will carry covenants on minimum sales and collections per quarter, a floor price below which units cannot be sold without consent, a bar on additional debt and a cost-overrun undertaking from the promoter. Repayment usually runs through a moratorium during construction followed by a cash sweep from collections, with a scheduled tenor of three to five years.

Institutional construction finance is a large, established market. The leading housing finance companies run dedicated developer finance books alongside their retail home loan portfolios, and construction-phase CRE-RH lending is a category the RBI’s 2025 Directions regulate specifically, which is discussed further below.

RERA changes how project cash can be used

Project collections cannot be treated as unrestricted corporate cash, and a construction finance structure that ignores this will fail at documentation.

Section 4(2)(l)(D) of the Real Estate (Regulation and Development) Act, 2016 requires the promoter to deposit 70% of the amounts realised from allottees into a separate account maintained in a scheduled bank, to be used only for the land and construction cost of that project. Withdrawals are permitted in proportion to the percentage of completion and only after an engineer, an architect and a chartered accountant in practice have certified that the withdrawal is in proportion to completion. The account is audited annually by a chartered accountant within six months of the end of each financial year. The remaining 30% of collections is free of this restriction.

There is a terminology point that matters in lender discussions. The statute refers to a separate account. It is commonly called a RERA escrow, but it is not a lender-controlled escrow: the promoter operates it, and the control is the three-professional certification, not a lender’s instruction.

A lender’s own escrow or trust-and-retention account sits alongside the RERA account. The waterfall that results usually runs as follows: all customer receipts land first in the lender-controlled collection account; 70% is transferred to the RERA separate account and released against certified construction progress; the balance 30%, together with any surplus in the 70% account once construction cost is fully covered, is applied to interest, principal and other project costs in the agreed order. Lenders take a charge on the 30% stream and on the eventual surplus, and typically require the RERA account to be held with the lending bank or a bank acceptable to it.

Two consequences follow. First, whether interest and principal on the project loan can be paid out of the 70% account depends on how the relevant state’s RERA rules define land and construction cost: the Maharashtra rules, for instance, count principal and interest paid to banks and NBFCs for the project as construction cost, while other states’ rules and regulator circulars are narrower, so the treatment has to be confirmed state by state before the waterfall is drafted. Second, a lender assessing debt capacity will not count the full collections towards debt service; it will count the stream that is actually free to reach it under the applicable rules and the escrow agreement.

Construction finance therefore has to be designed around RERA cash flows, lender escrow requirements, construction expenditure and debt servicing together, which is why the cash-flow waterfall is central to every real estate credit structure.

Stage 4: mid-construction, when a project needs more than the original sanction

A project does not need to be distressed to require additional capital part-way through construction.

A mid-construction funding gap arises when sales are slower than projected, construction is accelerated, costs rise, collections are back-ended into possession-linked milestones, the original facility was undersized, or the project has outgrown its first financing structure. At this point developers usually consider one of three routes.

Existing lender enhancement

Suitable where the current lender remains comfortable with the project and sufficient additional cash flow and security exist. It is the cheapest and fastest route when it is available, because the security and escrow are already in place.

Takeover plus enhancement

A new institution refinances the existing facility and simultaneously provides the additional construction funding. This is relevant where the incumbent lender will not increase exposure despite acceptable project performance, or where the incumbent’s pricing or repayment profile no longer suits the project. The economics turn on the incumbent’s prepayment charge (commonly 1–4% of the outstanding for a developer loan), the cost of re-creating security, and whether the new lender will fund the prepayment charge within the facility.

Structured or private credit

Relevant where conventional bank or HFC underwriting does not accommodate the required leverage, repayment profile or transaction complexity.

India’s private credit market has become a material source of real estate capital. Private credit investment in India reached US$3.5 billion in the first half of 2026 across more than 100 transactions above US$10 million, broadly in line with US$3.4 billion in the second half of 2025, and real estate took 35% of deal value, the largest share of any sector, ahead of healthcare at 13% and food and beverage at 12%. Domestic funds accounted for 74% of deal value and about 79% of deal count, and the principal uses were refinancing, holding company funding and acquisition financing (Business Today, 20 August 2026). The same report recorded that investors rank real estate as the sector with the highest perceived default risk, and that two-thirds of them target returns above 18%, which is why fund underwriting of a mid-construction project is selective and expensive even where capital is plentiful.

Private credit for a real estate project is usually structured as NCDs with a coupon in the mid-teens and, in some cases, a redemption premium that takes the all-in return higher, over a two- to four-year tenor, secured on the project and often on an alternate group asset as well.

The objective should not be to obtain higher-cost capital for its own sake. Flexible capital earns its cost where it solves a specific mismatch that can then be refinanced into cheaper debt, repaid through collections or closed out on completion.

Stage 5: last-mile funding, when ₹30 crore can unlock ₹100 crore

Near-completion finance is one of the most interesting parts of the developer funding universe, because a small facility can release a large amount of trapped cash flow.

Consider this project:

The project faces a ₹30 crore liquidity gap. If that ₹30 crore completes the building, obtains the occupation certificate, triggers the possession-linked instalments that typically make up the final 10–20% of every sold unit’s price, and makes the unsold inventory saleable as ready stock, the lender is financing an identifiable value-unlocking event, not a deficit.

That is what separates last-mile finance from repeatedly funding an incomplete project. The lender will focus on:

• How much does the project really need to finish, as certified by an independent engineer rather than the developer’s own estimate?
• What exactly does the new money complete, and does it include statutory dues, utility connections and the occupation certificate?
• Which receivables become collectible after that completion, and are any of them disputed or subject to delay compensation under RERA?
• How quickly can the ready inventory be sold at current prices?
• Will another funding gap arise after this facility?

A project that requires ₹30 crore to unlock ₹150 crore of visible cash flow has a different financing profile from one requiring ₹30 crore to survive another six months.

Last-mile capital comes from HFCs and NBFCs with completion-finance programmes, private credit funds, and, for affordable and mid-income housing, the government-sponsored SWAMIH fund. The Special Window for Affordable and Mid-Income Housing, a government-sponsored fund announced in November 2019, raised ₹15,530 crore and had committed investment in 148 stalled projects by 31 January 2026; SWAMIH Fund-2, with a proposed corpus of ₹15,000 crore to complete a further one lakh units, was announced in the Union Budget 2025-26 and is being rolled out (PIB backgrounder, 13 March 2026). SWAMIH eligibility requires a RERA-registered, net-worth-positive project where receivables and unsold inventory exceed completion cost and outstanding liabilities, which is the same test a commercial last-mile lender applies.

Stage 6: inventory funding, monetising completed or near-completed stock

Once construction risk has fallen away, the asset a lender underwrites is unsold inventory plus balance receivables plus the project’s remaining cash flows.

Why borrow against inventory instead of selling it

Consider ₹100 crore of completed inventory. The developer requires ₹25 crore immediately, perhaps to fund the land payment on the next project.

One option is to discount units and generate cash quickly. Another is to raise debt against the inventory and continue selling through the normal cycle.

The decision turns on financing cost against the discount required for accelerated sales. A borrowing cost of 12–15% a year on ₹25 crore for eighteen months is roughly ₹5 crore of interest. A 15–20% discount to move ₹100 crore of stock quickly is ₹15–20 crore of value given away, permanently. The comparison that matters is the cost of holding and financing the inventory against the value lost through accelerated monetisation, and in a market where achieved prices are rising, holding usually wins.

How inventory funding is structured

• Loan-to-value of about 50% of the realisable value of the unsold units, assessed at recent achieved prices, not list prices.
• Occupation or completion certificate in hand, or a certified cost to complete small enough to be funded within the facility.
• Security over the unsold units and the receivables, with a release mechanism: each unit sold is released from the mortgage against payment of a pre-agreed minimum amount per unit (often 60–85% of its sale proceeds) into the lender’s escrow.
• Tenor of two to four years, with repayment driven by unit sales and a minimum sales schedule written into the facility.

What lenders assess in inventory funding

A ₹100 crore inventory valuation is only the starting point. The lender will examine achieved selling prices over the last six to twelve months, monthly absorption, location and micro-market depth, unit mix and ticket size, construction and certificate status, existing charges, project debt, project receivables and the expected monetisation period.

A completed ₹2 crore apartment that regularly sells in its micro-market is a different asset from a ₹20 crore luxury unit where buyer depth is limited, even if both carry the same valuation. Inventory value and inventory liquidity are not the same thing.

Stage 7: lease rental discounting, when construction risk becomes rental cash flow

Commercial real estate can make one further transition, and it is usually the most valuable one for the developer’s balance sheet.

During construction the lender is underwriting completion risk, leasing risk and project cost. After completion and stabilised leasing, the same property generates contracted monthly rentals from identified tenants, and the financing instrument can shift to lease rental discounting (LRD).

LRD is term debt secured on the property and repaid from the rentals, which are routed through an escrow account under a tripartite arrangement between the owner, the tenant and the lender. Banks, HFCs and NBFCs all lend in this market, and it is the deepest pool of real estate debt available to a developer.

What determines LRD capacity

Tenor can run to ten to fifteen years from banks and HFCs, far longer than any construction facility, and the pricing is the lowest available to a developer because the underwriting is of a tenant’s rent, not a developer’s sales.

A completed commercial asset therefore moves from construction finance to stabilisation to LRD. The transition refinances expensive construction debt, extends tenor, and, where the asset’s value has risen above cost, releases part of the developer’s capital for the next project. For large portfolios, the stage after LRD is a REIT listing or a sale to an institutional investor, with LRD often serving as the bridge.

Refinancing can happen at almost every stage

Real estate refinancing is not limited to stressed projects; most of the refinancing we see is a performing project moving to the capital it now qualifies for.

A developer may refinance because the existing lender is expensive, the repayment profile is too aggressive for the collection curve, incremental funding is required, the project has materially de-risked, a short-tenor structured facility needs to move into conventional construction finance, or a completed commercial asset is ready to migrate into LRD.

The principle: as project risk falls, the developer should periodically reassess whether the existing capital remains appropriate for the stage the project has reached.

A project funded at the land stage at 18% should not carry land-stage pricing after approvals, substantial construction and strong sales have been achieved, when bank construction finance at 10.5–12.5% may be available. Expensive completion finance should not remain outstanding after the project has been completed and collections have stabilised. Each refinancing has to be tested against the prepayment charge on the existing facility, the cost of fresh security creation and stamp duty, and the time the new lender’s sanction will take, but on a ₹100 crore facility a 5–7 percentage point reduction in cost is ₹5–7 crore a year, which usually covers those costs within the first year.

Project stage changes what the lender is underwriting

The primary credit question moves as the project moves, which is why a single loan-to-value number is a poor way to describe real estate debt capacity.

In early-stage financing the lender cares most about title, approvals and sponsor support. During construction, cost-to-complete and project cash flows become central. At inventory stage, the focus moves to absorption and monetisation. At LRD stage, the underwriting is of rental cash flow and tenant quality.

The RBI project finance framework matters to developers

The project finance chapter of the Reserve Bank of India (Commercial Banks – Credit Facilities) Directions, 2025 and of the Reserve Bank of India (Non-Banking Financial Companies – Credit Facilities) Directions, 2025 applies one set of project finance rules to banks, NBFCs and housing finance companies, and expressly covers commercial real estate (CRE) and CRE-residential housing (CRE-RH) projects.

For developers, the practical implications are these:

• A loan is project finance only where at least 51% of repayment is expected from the project’s own cash flows and all lenders sign a common agreement with the borrower.
• Financial closure, the original DCCO and the disbursement schedule must be documented before the first disbursement, and disbursement must track construction progress and promoter equity infusion.
• At least 75% of the project land must be available before disbursement.
• Construction progress is monitored and certified by the lender; a project-specific database has to be maintained and updated within 15 days of any change.
• The repayment tenor, including moratorium, cannot exceed 85% of the project’s economic life, and repayment has to reflect realistic post-completion cash flows.
• A delay in DCCO beyond the permitted limits, or a material change in terms, is a credit event that triggers a collective lender resolution process under the Reserve Bank of India (Commercial Banks – Resolution of Stressed Assets) Directions, 2025.

The RBI’s provisioning norms for project finance also distinguish the provision a lender must hold against a construction-phase real estate exposure from an operational one:

The larger message for a developer is behind the percentages: the regulator prices the lender’s risk down as the project moves from construction to operation, and the developer’s capital structure should move with it. A construction-phase CRE loan carries the highest standard provisioning of any project exposure, which is one reason banks are more selective at this stage and more willing once rentals or collections are flowing.

Where real estate funding commonly goes wrong

Most failed real estate debt proposals fail on one of the mismatches below, usually before the lender has looked at the financial model.

What a developer should have ready before approaching lenders

A debt discussion moves considerably faster when the developer can state the project’s numbers in the form a credit committee will ask for them. The list below is the information memorandum in outline.

Project economics

• Total project cost, split into land, construction, approvals and development charges, finance cost and marketing
• Cost incurred to date, with the independent engineer’s or architect’s certification
• Balance cost to complete, with the construction schedule
• Promoter contribution already invested, at documented cost

Sales and collections

• Total saleable area and units, and area or units sold
• Sales value achieved and average realisation per square foot
• Collections received and balance sold receivables, with the construction-linked payment schedule
• Monthly sales velocity over the last twelve months, and cancellations

Inventory

• Unsold area and units, by typology and floor
• Expected realisation at current achieved prices
• Recent achieved pricing against launch pricing

Existing debt

• Current lender or lenders, sanctioned and outstanding amounts, rate of interest
• Repayment schedule, maturity and moratorium
• Security created and charges registered
• Foreclosure or prepayment terms

Regulatory and project position

• RERA registration and quarterly progress reports filed
• Title documents, title search report and ownership structure (own land, JDA or development rights)
• Licence, change-of-land-use, sanctioned plan, environmental clearance and fire approvals
• Construction progress against the RERA-declared completion date and the DCCO
• Existing project account and escrow architecture, including the RERA separate account and any lender escrow

These numbers say far more about financeability than “we need ₹100 crore against our project”, and a developer who has them assembled before the first lender meeting usually secures a sanction one to two months sooner.

The complete developer funding question

For a developer, the real funding universe is much wider than construction finance. Depending on the stage, the transaction may involve:

• Land or pre-development structured finance
• Construction finance
• Takeover plus enhancement
• Last-mile funding
• Inventory funding
• Receivable-backed finance
• Lease rental discounting
• Loan or structured debt against alternate group assets
• Private credit or AIF capital
• HoldCo or corporate-level structured debt

Whatever the developer calls the requirement, the right product is determined by five variables together: project stage, end use, cash flow, security and exit.

Transique’s real estate debt and structured finance capabilities

As real estate borrowing requirements move into ₹25 crore, ₹50 crore, ₹100 crore and beyond, identifying a lender is the smallest part of the transaction. The work that decides the outcome starts before the proposal goes to market:

• identifying the real funding gap, as distinct from the requested amount;
• establishing whether the requirement belongs at project level or at group or HoldCo level;
• determining the lender universe that fits the project’s present stage, rather than circulating the proposal to every institution;
• assessing cost to complete, receivables and inventory the way a credit committee will;
• structuring promoter contribution and debt so that the equity test, the cover test and the surplus test are all met;
• reviewing existing security, charges and prepayment terms;
• designing the repayment and escrow waterfall around RERA and the lender’s requirements; and
• presenting the transaction in an information memorandum and financial model that an institutional lender can underwrite without rework.

Transique Corporate Advisors works with developers and real estate groups on project, structured and asset-backed debt where the requirement goes beyond a single construction finance application. We act as transaction adviser to the borrower, from assessment and structuring through lender negotiation, documentation and disbursement; we are not a loan aggregator. In the transactions we advise on, the amount a developer asks for and the amount the project can actually service are rarely the same number, and the gap is usually found in the cost to complete, the receivable schedule and the escrow waterfall before any lender sees the file. The objective is not to identify who is lending to real estate; it is to identify which capital is appropriate for the project today and how it should change as the project moves to the next stage.

Transique’s real estate debt work covers requirements of ₹25 crore and above across India.

Part of Structured Debt. Related: Financial Modelling · Business Valuation · Deal Structuring · Raising ₹25–100 crore debt: why capital structuring matters more than interest rates

Frequently asked questions on real estate debt funding in India

Sources

• Reserve Bank of India (Commercial Banks – Credit Facilities) Directions, 2025
• Reserve Bank of India (Non-Banking Financial Companies – Credit Facilities) Directions, 2025
• Reserve Bank of India (Commercial Banks – Undertaking of Financial Services) Directions, 2025
• Reserve Bank of India (Non-Banking Financial Companies – Undertaking of Financial Services) Directions, 2025
• Real Estate (Regulation and Development) Act, 2016, section 4(2)(l)(D), and the state RERA rules on the separate account
• Business Today, 20 August 2026: real estate the largest destination for private credit in H1 2026
• Press Information Bureau, SWAMIH backgrounder dated 13 March 2026