FSI Premium Funding for Developers.
Buying additional FSI through a premium payment can materially increase a project's saleable area — but the premium itself is often a large, one-time cost due before that additional area generates any revenue. EquiFin structures FSI premium funding so the payment doesn't strain the project's broader capital plan.
Fungible & Premium FSI · Project Economics · Bridge to Construction Finance
Where This Becomes Relevant
- The project's economics improve meaningfully with additional FSI, but the premium payment is a significant upfront cost.
- Premium payment windows are time-bound, and delaying payment risks losing the opportunity to utilise the additional FSI on favourable terms.
- The developer wants to preserve capital for construction rather than funding the premium entirely from equity.
What Lenders Evaluate
- Project Economics With the Premium Factored In — whether the additional saleable area justifies the premium cost.
- Regulatory Basis — confirming the premium and the additional FSI it unlocks are validly permissible under applicable regulations for the specific plot.
- Timing — how the premium payment aligns with the broader project schedule and any regulatory deadline.
- Exit Path — how the facility is expected to be repaid or refinanced once construction and sales begin.
How the Financing Is Approached
FSI premium funding is sized against the specific premium payable and the additional area it unlocks, with the underwriting focused on whether that trade-off makes sense for the project rather than the developer's balance sheet alone. As with other pre-construction capital events, the facility is typically structured as a bridge, planned to be absorbed into the project's overall cost base once construction finance is in place.
What EquiFin Does
Economics Assessment — testing whether the premium is justified by the additional saleable area it creates.
Facility Sizing — structuring capital against the specific premium payable, not a generic pre-construction estimate.
Lender Fit — matching the requirement to capital providers comfortable with this specific pre-construction risk.
Sequencing — timing the premium payment against the broader project schedule and capital plan.
Why EquiFin
- We test the premium against actual project economics, not a generic rule of thumb.
- We size the facility to the specific premium payable and its timing.
- We plan the exit to construction finance before the facility is structured.
- One point of contact from structuring through to disbursement.
Frequently Asked Questions
What is FSI premium funding?
FSI premium funding is capital structured to pay the premium charged by planning authorities for fungible or additional FSI (Floor Space Index), which allows a developer to build more saleable area on a plot than the base FSI permits. The premium is usually a significant upfront cost relative to the extra area it unlocks.
What is fungible FSI?
Fungible FSI is additional built-up area a developer can purchase from the planning authority, over and above the base permissible FSI, on payment of a premium. It effectively converts non-saleable or non-FSI area allowances into usable, saleable construction area, subject to local development control regulations.
How is an FSI premium different from a TDR purchase?
An FSI premium is a direct cash payment to the planning authority to unlock additional built-up area on the same plot. TDR, by contrast, is a transferable right originating from a different property that a developer purchases from a third party and loads onto their own project. Both increase buildable area, but through different mechanisms and different payees.
See what documents lenders typically ask for — Documents Required for a Corporate Loan →
The Premium Only Makes Sense Against the Project's Real Economics.
Structuring the payment correctly protects the capital you'll need at construction while still capturing the additional saleable area.
Discuss an FSI Premium Requirement