ABOUT DEVELOPMENT EXIT FINANCE
Do you have a development project that has reached practical completion or is complete and need to repay your original loan facility by a set date or secure additional finance to finish and exit?
If so, you may want to consider the development exit finance option also known as sales period finance, a type of short-term bridging loan that can lower your lending costs and allow access to some of your invested capital. In this article we explain how it works, and what benefits it can offer.
FAQ'S ABOUT DEVELOPMENT EXIT FINANCE
What is Development Exit Finance?
Development exit finance is a short-term loan designed for property developers who have completed or nearly completed a project and want to refinance their existing property development finance facility. Instead of waiting for all sales to complete, developers can switch onto exit bridging to reduce costs, free up capital, or release equity.
It’s commonly used when a scheme is finished but sales are progressing slower than expected, or where early repayment of the development loan avoids high extension fees. For many developers, it provides breathing space and improves cash flow while marketing the completed units.
💬 Our Insight
"Presenting evidence of practical completion and even partial sales progress often unlocks sharper rates. Lenders want confidence that the project is truly market-ready."
Why use Development Exit Finance?
The main reason developers use exit finance is cost saving. Development loans are priced higher due to build risk, so switching to an exit facility can reduce monthly interest significantly. It also gives extra time for sales to complete without pressure from an expiring development facility.
In addition, exit finance can be used strategically to release equity from a finished scheme, allowing the developer to move onto their next project without waiting for all sales proceeds. For developers managing multiple sites, this ability to recycle cash quickly is often critical to growth.
💬 Our Insight
"Think of exit finance as both a safety net and a springboard. Used well, it protects your profit margin on one scheme while accelerating progress on the next."
How does the application process work?
The application for exit finance is similar to other forms of bridging loan or development funding but typically faster since the project is already completed. Lenders will require a full valuation confirming practical completion and the open market value of the property. They’ll also want to see details of the sales pipeline, planning approvals, and build warranties.
Most applications can be processed in a matter of weeks, especially if legals are well prepared. Having all compliance documents and sales evidence ready for submission is the single biggest factor in avoiding delays.
💬 Our Insight
"Prepare your application like a sales brochure — clean valuations, warranties, and evidence of demand reassure lenders and can shave weeks off completion times."
What loan-to-value (LTV) can I expect?
Most lenders offer development exit finance up to around 70–75% of the property’s open market value (OMV), although in strong demand areas or with experienced borrowers, this may stretch higher. Some lenders are more cautious if the scheme is in a slower regional market or sales evidence is limited.
Unlike development loans, which are based on GDV, exit finance is usually calculated against current market value since the project is completed. Borrowers with a solid track record and pre-agreed sales contracts often achieve the most competitive leverage.
💬 Our Insight
"LTV is not fixed in stone — if you can show a pipeline of exchanged contracts, some lenders will push past their headline maximums."
How fast can development exit finance be arranged?
Speed depends on how quickly valuations and legals can be turned around. In straightforward cases with all paperwork in order, funding can complete in as little as two weeks. However, most transactions take 3–6 weeks to progress through due diligence.
Developers who maintain up-to-date warranties, insurance, and planning documentation typically move much faster through the process. If a developer knows their existing facility expiry date in advance, starting the exit finance application early can prevent costly last-minute extensions.
💬 Our Insight
"Exit finance can be lightning-fast if you’re proactive. Having monitoring surveyor sign-offs and warranties ready is the single biggest time-saver."
What are the typical costs of Development Exit Finance?
Costs vary by lender but generally include an arrangement fee (1–2% of the loan), legal and valuation fees, and monthly interest charged between 0.6% and 0.9%. Exit fees may also apply, although many lenders offer products without them. While the interest rate is usually lower than a development loan, the true cost depends on loan size, LTV, and the borrower’s experience.
Developers should weigh headline rates against all associated costs, including redemption penalties on their current facility. Careful comparison across multiple lenders is essential to ensure the most cost-effective structure.
💬 Our Insight
"Don’t be seduced by the lowest monthly rate — look at the full fee stack. Sometimes a slightly higher rate with no exit fee is cheaper overall."
Eligibility for Development Exit Finance
Development exit finance is available to a wide range of developers and investors, but lender criteria can vary. Most lenders prefer applicants with a proven track record, though it’s possible for first-time developers to secure funding if the project is well-presented and backed by strong professional teams (such as experienced contractors and project managers). Some lenders are open to applications from offshore SPVs, expats, or borrowers with historic credit issues, provided the scheme itself is viable and security is strong.
Lenders will typically assess the project’s completion status, valuation evidence, sales pipeline, and the borrower’s overall financial standing. The stronger these elements, the more competitive the terms offered.
💬 Broker Tip
“Even first-time developers can secure exit finance — the key is to demonstrate strong professional support around the project and present a clear sales strategy.
REAL LIFE CASE STUDIES
Case Study 1: Urban Apartments Project in London
A London-based investor had completed a 50-unit apartment complex. Their initial loan facility's high rate was straining cash flow, and they needed more time to secure sales. By securing developer exit finance, they replaced their costly loan with a more affordable option, allowing them to extend their marketing period. This led to all units being sold at premium prices within six months, significantly boosting profits.
Case Study 2: Luxury Villas just outside Glasgow
A house builder specialising in high-end semi-rural properties faced challenges selling their 12 luxury villas due to market seasonality. With development exit finance, they were able to extend their sales period and launched targeted marketing campaigns. The result? The entire project sold out during the peak buying season, maximising returns.
Case Study 3: Mixed-Use Development in Birmingham
A mixed-use venture in Birmingham encountered delays in securing tenants for its commercial units. By leveraging development exit bridging, this allowed additional finishing touches to be completed and attract premium clients. This was a resounding success, delivering a strong ROI.
POST-EXIT PATHWAY: WHAT COMES NEXT?
Securing development exit finance isn’t always the end of the journey. Many developers use it as a stepping stone into longer-term facilities. For example, if you plan to retain units as investments, you may refinance onto a buy-to-let mortgage or a portfolio facility once sales are complete. For mixed-use or commercial schemes, a commercial mortgage can provide a natural transition from short-term funding into a more stable structure.
Some lenders also reward energy-efficient or sustainable developments with preferential long-term rates, making it easier to convert an exit facility into a cost-effective holding solution. By planning your post-exit pathway early, you can avoid unnecessary refinancing delays and ensure a smooth move from project completion to your next investment.
💬 Broker Tip
“Think beyond the exit loan — aligning your strategy with buy-to-let or commercial refinance options early can save both time and money when units start to sell.”
DEVELOPMENT EXIT FINANCE TRENDS
(2025 AND BEYOND)
The development exit finance market has shifted significantly in recent years, reflecting wider property and lending conditions. Some key trends borrowers should be aware of include:
Rising Demand for Quicker Exits
With sales pipelines taking longer to complete, more developers are leaning on exit finance to release cash flow earlier. Expect lenders to expand product ranges to meet this demand.
Increased Lender Competition
New specialist lenders are entering the market, driving competition on rates and fees. For experienced developers, this means more options — but also more scrutiny of track record.
Valuation-Driven Lending
Lenders are paying closer attention to GDV (Gross Development Value) evidence, especially in slower markets. Borrowers who can demonstrate strong demand through reservations and sales data will gain access to better leverage.
Green and Sustainable Focus
More lenders are rewarding sustainable builds with preferential pricing. If your development includes energy-efficient features or EPC improvements, highlight this to secure stronger terms.
Regional Variations
Markets like London, Glasgow and Edinburgh see faster lender turnaround due to high demand, while more rural schemes face stricter underwriting. Understanding these regional nuances can make the difference in achieving a competitive facility.
DEVELOPMENT EXIT FINANCE: DON'T LET DEALS FALL APART
Sometimes a project is complete but delayed in sale or refinance. Development exit finance bridges the gap, helping you:
• Release equity before final sale.
• Improve cash flow for your next project.
• Avoid extensions on your original development loan.
This approach is especially useful in Scotland’s slower or seasonally affected markets.
RISKS AND PITFALLS OF DEVELOPMENT EXIT FINANCE
While development exit finance can be a powerful tool for reducing costs and unlocking equity, developers should be aware of the potential risks:
• Overestimating Valuations – Lenders base borrowing on open market value, not developer expectations. An optimistic valuation can result in lower-than-anticipated funding.
• Hidden Costs – Arrangement fees, exit fees, and monitoring surveyor charges can quickly erode the headline rate advantage if not factored in upfront.
• Timing Issues – Delays with legals, sales, or warranty documentation can leave developers exposed to extension fees on their current loan.
• Overleveraging – Stretching to the maximum LTV may look attractive but can reduce flexibility if market conditions weaken or sales take longer.
💬 Our Insight
"Always model your developer exit finance on conservative valuations and longer sale periods. That way, if things go better than expected, you’re ahead of the curve — not scrambling for a backup plan."
HOW TO APPLY: A STEP-BY-STEP-GUIDE
Consult with a Development Exit Finance Specialist
We can guide you through the intricacies of the process, help you explore the type of loan funds available, and provide personalised guidance.
Who Is It For?
• Property Developers.
• Landlords & Investors.
Application Process
• Speak to an expert broker.
• Provide Documentation.
• Financial forecasts.
If your application aligns with the criteria, you’ll receive initial terms within 24 hours. The strategy has a lot of moving parts, preparation and professional guidance on an acceptable exit strategy are essential for a successful application.
Speak to an Exit Finance Expert
Development exit finance is a viable choice for those who want to reduce their costs, extend their marketing period, and release some of their capital. It can help them transform their sales and achieve their goals. However, it is not a one-size-fits-all solution, and it requires careful planning and evaluation. A professional broker or adviser can help find the most competitive rates and terms.
