Development Exit Finance is used to repay your current Development Loan.
Development Exit Finance – also known as ‘Sales Period’ or ‘Developer Exit’ Finance – is a new Loan, for up to 18months, that is used to pay off the outstanding balance on a recently completed or nearly completed Development Project.
The rate is invariably cheaper than the original Development Loan – due to there being no more construction risk and now just sales risk – which not only saves the Borrower significant sums of money on Finance but also removes the need to reduce Asking Prices to speed-up sales to pay off the impatient Development Lender, thus retaining and increasing Profit.
Kingswood are one of the UK’s most experienced Brokers in this area, helping shape Lender’s policies and working closely with the Founders and Directors to get best results for our Clients. Our experienced team understand the pressures that Developers face, including not wanting to sell their sites under pressure or face extension fees with their existing lender.
Our team can swiftly assist with a development exit loan, providing the time needed to market and sell the remaining properties at the best possible prices, maximising the profit of the project.
What: 82 Flats in the Midlands
Value: £38m total value
Mid-Project: £6m sold in the Construction Phase
Reason for Finance: Development Lender wanted their money back as the Project was late due to Planners and COVID
£32m Value of Flats remaining
75% LTV
£24,360,000 Gross Loan inc all Fees
0.5%pcm for 12 months
Facility was cheaper than the Development Loan, preserved the great relationship with the Development Lender and gave the Clients a fresh 12 months to sell without crashing prices to repay the Development Lender quickly.
Raise additional equity to allow a developer to move onto the next project. Often utilised nearing completion to allow developers to fund their next project without being impacted by delayed sales which can lead to cashflow issues. Allowing developers to take advantage of any new upcoming opportunities and get ahead of competition.
A lower interest rate can be achieved compared to the original development finance. This is due to the reduced risk of the project being near completion. Flexible underwriting with rolled-up interest for no monthly payments.
Development exit finance buys time on projects that may have an overly optimistic timeline. There are often delays due to extended building time, planning conditions or unseen circumstances. A property may be largely completed but still requires finishing touches in order to complete the sale. Developer exit facility can help fund this time and reduce the need for lowering asking prices.
If you would like to speak to us about funding options for your project, contact us today.
If you would like to talk to a member of our team about project funding, please contact us today.
We are a specialist property finance debt arrangement firm based in the heart of London. Our commercial team facilitate investment and construction funding for real estate investors and developers.
£1,245,782 to date since 2015.
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