GST funding on a commercial settlement

The situation

The following is an anonymised composite reflecting a recurring pattern, not a specific settled deal. A developer completes the sale of a small commercial development, generating a GST liability on the sale that falls due shortly after settlement. Most of the sale proceeds are already earmarked for repaying the construction facility and funding the next project, leaving a shortfall to meet the GST liability itself.

Why it's hard

The GST liability is a real, time-sensitive obligation, but the cash to meet it is tied up in proceeds already committed elsewhere, and re-arranging those commitments at short notice is disruptive to the developer's broader pipeline. Whether the margin scheme applies to the sale also affects the size of the liability, and this needs to be confirmed with the developer's accountant rather than assumed.⚠

How it can be structured

A dedicated GST funding facility, secured against the settled property or another asset in the developer's portfolio, covers the liability directly, sized to the confirmed GST amount and structured for a short, defined term until the developer's cash flow from the broader project resolves; the exit is typically the developer's own trading cash flow, or proceeds from the next project stage settling. Where the developer holds other unencumbered property, a short bridging facility against that asset can achieve the same outcome, sized more broadly than a GST-specific facility if other short-term needs exist at the same time. Because the amount and timing are usually well defined once the sale has settled and the liability confirmed, this is typically one of the faster facilities to arrange in the category.

Because the GST liability crystallises at a specific point tied to the settlement itself, lenders in this space typically want to see the settlement statement and the accountant's calculation of the exact amount owing before finalising terms, rather than an estimate prepared earlier in the sale process that may not reflect the final adjustments made at settlement. Where a developer runs several projects with staggered settlements, GST liabilities can arise in close succession, and some lenders will structure a standing facility limit the developer can draw against as each liability crystallises, rather than arranging a fresh facility for every single settlement, which is generally more efficient for a developer with an ongoing pipeline. Confirming with the ATO directly, through the developer's accountant, that no other outstanding lodgements or liabilities exist alongside the specific GST amount being funded is also a sensible check before finalising the facility, since an unrelated liability discovered later could affect the developer's broader compliance standing.

What it typically costs

Pricing on GST funding reflects the short, defined term and the certainty of the underlying liability, quoted on enquiry once a lender has reviewed the settlement and the confirmed GST amount. An establishment fee is standard, with the total cost generally modest given the short facility term involved.

Timeline

1. Same day — scoping call confirming the settlement, the GST liability and available security.
2. 1–3 business days — confirmation of the GST amount and lender matching.
3. 2–5 business days — credit approval and offer.
4. 1–3 business days — settlement and funds released ahead of the GST due date.

Questions we'd ask you

1. Has your accountant confirmed the exact GST amount payable, including whether the margin scheme applies?
2. What security is available to fund the shortfall — the settled property, or another asset?
3. When exactly does the GST liability fall due?
4. What is the source of funds expected to repay this facility, and over what timeframe?
5. Are there other short-term funding needs in your pipeline at the same time that should be considered together?

Related

Settlement & GST funding · Bridging loans · GST margin scheme · Property developers