Development Exit Finance
What is Development Exit Finance?
Development Exit Finance is a short-term bridging loan that repays development finance before sales complete. It unlocks equity once a project reaches Practical Completion,offering flexibility and financial breathing room.
Avoid Lender Pressure: If sales are slow or the project overruns, this loan gives you time to sell or refinance without a forced sale or default penalties.
Unlock Capital: Free up cash from completed projects to fund new opportunities.
Versatile Use: Suitable for single or multi-unit residential and commercial developments.
Bridge Loan Structure: Pays off development finance, with LTV based on the finished property up to 80% LTV, releasing additional capital.
No Monthly Repayments: Interest is rolled up or retained, with full repayment on sale or refinance.
Key Benefits
Speed: Arrange a development exit loan in as little as two weeks.
Leverage: Unlock up to 75% of the property’s open market value.
Achieve a better GDV: Sell or refinance without pressure to maximise returns.
Improve business cash flow: Free up equity before sales complete, keeping your cash flow steady.
Move on to the next project sooner: Use the capital tied up in your development to fund your next investment without delay.
Flexibility: Repay the loan anytime within the term, often without penalties after three months.
Rental income: Unlike development finance, most exit loans allow properties to be rented on short-term or 12-month ASTs.
Who is Eligible?
Limited Companies, PLCs, Sole Traders, Private Individuals, SIPPS and Partnerships are all
able to use development exit finance. Lenders will look at several factors when assessing
suitability and price including:
- The level of experience the developer has in delivering sales or lets
- Evidence of sales interest
- The GDVs of the units and how they compare with sales in the area
- The build stage of the units being financed – ideally completed but at least wind and watertight.
- The reason the exit finance is needed.
How much can you borrow?
- Loan-to-value (LTV) is typically around 75% of the unit values with some lenders doing 80% or more.
- Loan amounts starting from £100,000 to £50M+.
Interest Rates & Terms
- Rates will depend on the eligibility criteria but typically can be 0.45% to 0.9% per month depending on the risk level of the scheme. Development Exit Finance can be comparably cheaper than the original development lender’s finance.
- Loan terms are typically 6-12
- Fixed and variable rate options available.
