Development Loan Refinance to Provide More Time for Property Sales

In this case study, Positive Commercial Finance arranged a Development Loan Refinance that gave an experienced developer an additional 12 months to sell completed homes without unnecessary pressure.

The Opportunity

Our client had successfully completed the construction of 11 detached houses in Cheshire.

Although the build progressed largely as planned, unforeseen drainage works increased construction costs slightly. Despite this, the development reached practical completion and attracted strong interest from buyers.

The Challenge

The original development finance facility was approaching the end of its term.

While three properties had already exchanged contracts, none had completed. The remaining homes were generating interest, but the developer wanted more time to secure sales at their target prices rather than accept discounted offers.

The solution needed to:

• Repay the existing development finance facility.
• Provide additional time for property sales.
• Release a small amount of equity where possible.
• Complete quickly after practical completion.

Our Solution

Positive Commercial Finance sourced a competitive Developer Exit Finance facility tailored to the client’s requirements.

The refinance completed just three weeks after the development reached practical completion, allowing the existing development loan to be redeemed without delay.

The new facility also released a modest amount of equity while giving the developer the flexibility to market and sell the remaining properties over the following 12 months.

Deal Structure

• Loan to Value (LTV): 63%
• Interest Rate: 0.49% per month
• Arrangement Fee: 2%
• Exit Fee: None
• Term: 12 months

The Result

The refinance successfully replaced the original development loan and removed the pressure of an imminent repayment deadline.

With an additional year available to complete sales, the developer could focus on achieving the best possible prices for the remaining homes rather than rushing transactions.

The first property sale was expected to complete shortly after the refinance, with the remaining homes continuing to attract strong buyer interest.

This case study demonstrates how a well-structured Development Loan Refinance can provide valuable breathing space once construction is complete, helping developers maximise returns while improving cash flow.