| Purpose | Repay the development loan and allow time to sell or let |
|---|---|
| Typical loan | Often up to around 70–75% of the completed value (GDV) |
| Term | Typically 6 to 24 months |
| Repaid by | Unit sales, or refinance to a term or portfolio mortgage |
| Regulated? | Usually not; lending is normally to a company or SPV |
| Lenders want | Building control sign-off, warranties and a sales plan |
Why developers use exit finance
- Avoid default costs if the development loan term is ending before the units are sold.
- Reduce the cost of funds: exit finance is often priced below development finance, because construction risk has gone.
- Avoid discounting: more time to sell at full value rather than to a deadline.
- Release equity to start the next scheme.
What lenders need
- Building control completion certificate, or a clear route to it
- New-build warranty (such as NHBC or equivalent) and professional consultant certificates where relevant
- An independent valuation of the completed units
- Sales evidence: reservations, exchanges, agent advice on pricing and timescales
- Details of the existing development facility and redemption figure
Exit routes
Most exit loans are repaid from unit sales, with each sale reducing the loan. Where you plan to keep some or all units, the exit can be a portfolio buy-to-let, multi-unit freehold or commercial mortgage. We plan the exit alongside the bridge so you are not refinancing twice. For new schemes, see development finance.
Check your dealIndicative borrowing, total cost and the questions a lender will ask, in about two minutes.
Open the deal checkerExample cases
Illustrative examples based on the type of case we arrange. Not specific clients; every case is different.
£1.95m development finance at 62% LTGDV for an office-to-residential conversion
£1.43m development finance at 55% LTGDV for four new houses near Maidstone
Frequently asked questions
What is development exit finance?
A short-term loan taken once a development is complete or nearly complete. It repays the development facility and gives the developer time to sell or let the units, often at a lower cost than staying on development finance.
When should I arrange development exit finance?
Ideally a few months before your development loan term ends, as soon as practical completion is in sight. Arranging it early avoids default interest and gives you time to compare lenders.
Can I release equity with development exit finance?
Some lenders will lend more than the existing development debt, releasing part of your profit for the next project, subject to the completed value and their maximum loan to value.
Is development exit finance regulated?
Usually not, because it is normally made to a company or SPV and secured on property that the borrower will not live in.
Important: Bridging and development finance are short-term, secured borrowing and can be expensive. You need a clear, realistic exit plan. Loans secured on a home you live in may be FCA-regulated; most others are not. Your property may be repossessed if you do not keep up repayments.