Have you finished your development and now need more time to sell or refinance the properties? Or perhaps you are part-way through the works and “almost” finished? You are in the right place.
What is Developer Exit or Development Exit Finance?
Developer Exit Finance, sometimes known as Sales Period Loans or Development Exit Finance can help you refinance your current development loan.
You are approaching the end of term with the current lender.
Developers do not want to have to sell their units under pressure, nor do they want to face extension fees with their existing lender. Both can erode profits. A developer exit loan can provide the time needed to market and sell the remaining units. With no exit fees, and interest accruing daily, you can repay the loan as quickly as you wish.
You are unhappy with the current interest rate.
Rates typically range from 0.55% – 0.75% per month with a Developer Exit loan. Developers can often save considerably by switching to a developer exit loan when their sites reach, or are approaching, practical completion.
Positive Commercial Finance recently facilitated a Development Exit Loan for a developer based in the Midlands. The project had over-run and was coming to the end of the development loan term. The Development Finance Lender had extended the term once and was not prepared the extend the term again. Positive Commercial Finance arranged a Developer Exit loan that not only paid off the Senior Lender and Mezzanine Lender, but also released some cash for the developer. We managed to provide a lower interest rate, on a 12 months term to allow plenty of time for sales.
You want to release cash to work on other projects.
We can facilitate significant cash releases to provide funds for other projects. Plus, in some cases, the net sales proceeds from each sale can be shared with the developer, further aiding cash flow as each unit is sold.
Development facilities often allow a short time period for sales. In many cases, they do not quite allow long enough. Once the “out of the ground” construction risk is gone, and works have progressed significantly, it is possible to refinance, which can very often come at a lower cost than the original development facility. These facilities then give you a longer marketing and sales period, to enable you to sell the properties without any time pressures, at prices you are more willing to accept. They can afford the developer more control over the sales process, taking away the stress of worrying about redeeming a Development Finance facility on time.
If works are not yet 100% complete, then further monies can also be made available in arrears, in the same way as a development facility would.
Lenders understand that a well progressed or completed development has less risk.
Interest can be retained or rolled-up and paid on redemption, so there are no monthly payments throughout the course of the loan, nor are there any exit penalties.
There is often no set fee/ costs structure with these loans, so we can work with you to create a bespoke loan that suits your requirements. Lenders can be flexible on fees, terms and the way in which interest is repaid.
Sales Period Finance is available on Residential and Commercial Developments in England, Scotland, Wales and Northern Ireland. Options are available for all types of company structures including SPVs, Offshore companies, UK Limited Companies etc.
Up to 80 LTV%
Arrangement Fees from 1% on developer exit products
Interest Rates from 0.4% per month
No exit fees or Early Repayment Charges (ERC’s)
No Up Front Fees
Up to 36 months with development exit loans
Available in England, Scotland, Wales and Northern Ireland
Facilities for first time developers are available
Option to retain part of your proceeds from every unit sold
Adverse Credit cases can be funded
Fast completions possible with exit finance
Interest can be rolled up, retained or paid monthly.
The development will have to be built in accordance with its own planning permission and building regulations.
On completion the Development will have a suitable New Build Warranty
A First legal charge will be required on the development property
Multi-unit development schemes preferred
What Company (or name) is the project held in?
A link to the selling agents Sales Particulars, or brochure.
Planning permission details.
If the development is finished, Practical Completion certificates.
It the development is not finished, a summary of works outstanding, and costs thereof.
Details of the New Home Warranties, if applicable.
Amount of debt against the site currently.