We’re often faced with the scenario where our developer clients have a completed scheme and are keen to move on to their next project. However, if property sales have not completed, they often don’t have the funds to do so.
Development Exit finance can enable a developer to raise funds against a completed scheme to allow them to start on their next project without having to wait for the cash from the property sales.
Development Exit finance is usually significantly cheaper than a normal Development Finance loan so often developers will look to switch to this kind of facility to reduce their borrowing costs as they’re nearing the end of a project. This means they avoid hefty penalties if their current term is due to expire.
Interest rates start from as little as 5% per annum, but when switching lenders, developers do need to consider the additional arrangement fees, legal costs and valuation fees. However, with greater flexibility on terms it will allow them to sell the properties in their own time and at the right price.
If you have Development Finance in place now and are coming to the end of the term, why not contact us to see how a Development Exit facility could benefit you. Alternatively, if you have a completed scheme with no funding in place but are waiting for the properties to sell, a Development Exit Facility may enable you to free up the funds to start on your next project.