Development Exit Finance
If your development is near completion, development exit finance could potentially reduce costs and maximise your profits.
Call us today on 0800 470 0430
If your development is near completion, development exit finance could potentially reduce costs and maximise your profits.
Development exit finance (DEF) is a type of bridging loan (or bridging finance) for property developers used at the practical completion stage of their project. The aim being to save costs and hopefully maximise their profit.
This is because it works by repaying the existing development finance with a cheaper bridging finance exit loan.
Read on to discover how DEF could be advantageous to your project.
Development finance, as the name suggests, provides property developers with the funding they need to turn their property vision into a reality.
This could be a ‘ground up project’ – building a brand new development on land – such as new houses, a care home or student accommodation known as Purpose Built Student Accommodation (PBSA).
Or perhaps the property developer is buying an existing property, such as an office block and converting it into apartments.
Whatever the need for the development finance, it will always have an agreed end date with the lender and at Assetz Capital, our term is up to 36 months. In the world of property development, a lot can happen in 36 months and there are many different scenarios in which the developer may want (or need) to ‘exit’ their existing development finance deal.
At Assetz Capital, we can work with the client to review the term of their current development finance deal, giving them breathing space and time to finish and sell the development. This is one of the advantages of working with an expert, property finance specialist like Assetz Capital.
If the development is completing on time (or even early) and the developer is planning to retain it, at Assetz Capital we can work alongside them to exit to a commercial mortgage if this is possible and in their financial interest to do so. We’ll look to do this before the current development finance term ends.
In the scenario where the project is on time, near to completion and selling well, the developer could exit their existing development finance deal early and take advantage of bridging finance. Bridging finance can offer lower interest rates and the ability to switch will depend upon the LTV required.
At Assetz Capital we can even help developers fund their conversion projects before they have planning permission in place! Our innovative Planning Assistance Loan (PAL) enables them to buy property while they finalise the permissions they need for conversion. Please note that our PAL is available in England only.
Development exit finance is a type of bridging loan (or bridging finance) for property developers used at the practical completion stage of their project to save costs and hopefully maximise their profit.
Development exit finance works by repaying the existing development finance with a cheaper bridging finance exit loan.
Repaying existing finance usually means you stop accruing interest immediately on your previous loan, as development loans typically accrue interest every month.
There are several benefits, including –
We take pride in being flexible and finding a funding solution that meets your business needs. Each deal is structured and priced on its own merits. We will consider terms outside the below LTV and maximum loan guidelines when the circumstances warrant it.
Indicative terms | Key features |
---|---|
Commitment term | 2 – 24 months |
Arrangement fee | From 2% (typically shared with the broker) |
Maximum LTV | 70% (of market value). |
Preferred loan size | £500k – £10m. |
Rate | From 10.5% p.a. |
If you have a deal you’d like to talk through, then why not complete our quick enquiry form and we’ll get straight back to you?
Alternatively, you could call us now on 0800 470 0430.
At Assetz Capital we’re committed to funding the growth aspirations of UK business and that’s why we offer finance and mortgage solutions across the property sector.
Development finance projects come in all shapes and sizes and there’s isn’t one that we haven’t seen before. From converting properties to care homes through to the new build of student accommodation. Additionally, we can also support any aspect of residential development – both traditional bricks and mortar properties and apartment blocks. Plus, we fund beyond ground up construction as we’re also expert in conversion, refurbishment and reconfiguration projects.
ArrowIf you have an established business with equity to put into your own premises; the opportunity arises to buy the premises you are operating your business from (where it is currently rented), or you want to unlock some equity in another property, or indeed grow your property investment portfolio, a commercial mortgage could be the ideal solution.
ArrowBridging finance that’s arranged for you by property finance lending experts. Whether your SME needs funding quickly for property purchase, land acquisition, light/ heavy refurbishment or development finance exit. You’re in safe hands with Assetz Capital.
ArrowThe Planning Assistance Loan (PAL) is an innovative product from Assetz Capital. It enables experienced property developers to buy offices or warehouses before they have secured full planning permission for their residential conversion scheme.
ArrowOur residential refurbishment loans are geared for property developers looking to buy, refurbish and sell single or blocks of properties.
Arrow