Development exit finance guides
Plain-English answers on repaying development finance at completion, sizing a bridge on gross development value, costs and rates, and exiting a finished scheme, from a specialist arranger.
Straight answers to the questions developers and investors ask before they exit a completed scheme. Written by Matt Lenzie, who has arranged more than £500 million of property and development finance over 25 years. This is finance to repay a development facility, fund the sales period and refinance a finished scheme as a business or investment, not a regulated home loan.
What is development exit finance?
Development exit finance is the short-term bridge that repays a development loan once a scheme is built but not yet sold or refinanced. This guide defines it, shows when a scheme needs it, how it is sized on GDV, what it costs and how it is repaid.
Read the guide → DefinitionsGross development value (GDV) explained
Gross development value is the headline number in every development appraisal, and the figure a development exit facility is sized against. This guide defines GDV, shows how it is calculated, and separates it from net development value and day-one value.
Read the guide → DefinitionsNet development value (NDV) explained
Net development value is what a finished scheme actually banks once the costs of sale are stripped out of gross development value. This guide defines NDV, gives the formula, works through the calculation with pound figures, and separates it from GDV.
Read the guide → DefinitionsWhat is practical completion?
Practical completion is the moment a building is finished enough to hand over, and it is the event that lets a developer replace a maturing development loan. This guide defines practical completion, explains the certificate, sets out what changes at PC and shows what warranties and sign-offs a lender needs to fund an exit.
Read the guide → DefinitionsLoan to GDV explained for a development exit
Loan to GDV is the ratio that decides how much a finished scheme can borrow against what it will be worth once sold. This guide explains what it means, how it differs from loan to value and loan to cost, and the bands that apply on a development exit.
Read the guide → DefinitionsSPV development finance explained
An SPV is the single-purpose limited company that most development schemes are actually borrowed through. This guide explains what a special purpose vehicle is, why lenders prefer a clean single-asset SPV, how to set one up with the right SIC code, and how SPVs connect to tax, personal guarantees and the SPV mortgage that refinances the finished scheme.
Read the guide → DefinitionsMezzanine finance for property development
Mezzanine finance is the layer of funding that fills the gap between a developer's equity and the senior debt from the main lender. This guide defines it, shows where it sits in the capital stack, the loan-to-cost uplift it allows, what it costs and how it is repaid at exit.
Read the guide → ComparisonsDevelopment exit finance vs development finance
Development finance funds the build and is priced for construction risk. Development exit finance replaces it at practical completion, once that risk has gone, to fund the sales period more cheaply. This guide draws the line between the two.
Read the guide → ComparisonsDevelopment exit finance vs a bridging loan
A development exit bridge and a generic bridging loan are both short-term debt secured by a first charge, but they are sized and structured very differently. This guide draws the line between development exit finance vs bridging, and shows where each one fits.
Read the guide → ComparisonsSelling vs refinancing units at the end of a scheme
At practical completion you face one decision: sell the units to repay, or refinance the ones you keep onto term or buy-to-let debt. This guide sets out when each makes sense, and how a development exit bridge buys the time to choose.
Read the guide → ProcessHow development exit finance works
Development exit finance is the short-term debt that replaces a development loan once a scheme reaches practical completion. This guide walks through the trigger, the repayment of the senior lender, GDV sizing, the interest options and how the loan is redeemed.
Read the guide → ProcessWhen to use development exit finance
Development exit finance has a few clear moments where it earns its place: a development loan running to maturity, a sales window that needs more room, or equity locked in a finished scheme. This guide sets out the scenarios and the timing.
Read the guide → ProcessDevelopment exit finance criteria and eligibility
Lenders assess a development exit application against a clear checklist: how finished the scheme is, what it is worth, what has sold, and how the loan repays. This guide sets out the development exit finance criteria in the order a funder works through them.
Read the guide → ProcessHow to finance a property development
Financing a property development means lining up the right debt for each stage, from buying the land through the build to selling or refinancing the finished scheme. This guide walks the full development finance lifecycle and shows where development exit finance sits at the end.
Read the guide → ProcessFirst time property developer finance
First time property developer finance is achievable without a track record, provided the application is structured to answer the questions a lender always asks. This guide covers what lenders require, how they assess a no-experience applicant, the mitigants that get a deal placed, and the route through to a development exit at completion.
Read the guide → Process100% development finance explained
True 100% development finance almost always means a joint venture in which an investor funds the whole scheme in return for a profit share, or a stack of stretched senior and mezzanine debt topped up with additional security. This guide explains how close to 100 percent is realistic, what qualifies you, the trade-offs, and where a development exit bridge fits after practical completion.
Read the guide → ProcessJoint venture development finance
Joint venture development finance lets a proven developer build with little or none of their own cash, in return for sharing the profit with a funding partner. This guide explains how it works, the common profit-share structures, what a JV partner requires, how it compares with debt, and how an exit bridge takes the partner out at completion.
Read the guide → ProcessRefinancing a completed development
A completed scheme reaches a point where the development loan must be repaid, and the developer has to decide how to refinance it. This guide sets out the two routes off development finance: onto a development exit bridge to buy sales time, or straight onto term or buy-to-let debt where units are retained.
Read the guide → ProcessFinishing a stalled or part-complete development
When a development facility runs out of term or headroom before practical completion, the build can stall with the original lender's loan due and the units unsold. This guide explains the funding that takes over a part-built site, finishes it and carries it to a sale.
Read the guide → CostsHow much does development exit finance cost?
The cost of a development exit facility has a handful of moving parts: the monthly interest rate, lender fees, the valuation, the legals, and the way interest is held back. This guide breaks each one down so you can see where the money goes, with all figures illustrative and not an offer of finance.
Read the guide → CostsDevelopment exit finance rates explained
Development exit finance is priced lower than the development loan it replaces and higher than a long-term term loan, and the rate moves with leverage, GDV and the strength of the sales evidence. This guide explains how the rate is set and how to read an indicative quote.
Read the guide → LendersDevelopment finance lenders explained
The development finance lenders that fund a build are not always the right desks to carry a finished scheme through its sales period. This guide segments the lender market by type and shows how a whole-of-market arranger matches a completed development to the desk that fits it.
Read the guide →Coming up to practical completion?
Send us the scheme and the gross development value and we will come back with a view on fundability and likely terms within one working day.