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Development exit finance for UK developers

Your build is finished, or close to it, but your development facility is nearing the end of its term and the units have not all sold. Development exit finance is a short-term, business-purpose facility that can repay the original development lender and give you time to complete sales or arrange longer-term finance, without selling at a discount just to meet a deadline.

What development exit finance is

It is a form of commercial bridging finance designed for a specific moment: the construction phase is over and the risk profile of the scheme has changed. A completed or practically completed project is generally easier for a lender to assess than a half-built one, because the asset exists and can be valued as it stands.

The new loan is secured on the completed scheme. Its proceeds repay the development facility, and the loan is then repaid from unit sales, a refinance, or a combination of the two. Because the exit is the whole point, lenders will focus on it early.

When developers use it

• The development facility is approaching maturity and sales are taking longer than planned
• A scheme has reached practical completion but sales are being held back by snagging, warranties or sign-off paperwork
• A developer wants to sell units at considered prices rather than accept a discount to meet a repayment date
• The plan is to hold the completed asset and refinance it onto longer-term finance, but that refinance is not yet in place
• A sponsor wants to move away from the development lender's tighter covenants and manage the sell-down on a more flexible footing

None of these situations guarantees a facility will be available. Each deal is assessed on its own merits by the lender.

Sell-down or refinance: the two exits

Sell-down. Units are sold individually or in blocks and sale proceeds repay the loan. Lenders will want to see your sales evidence: reservations, exchanged contracts, agent feedback and a realistic sales programme. They may also look at how repayments are released as units complete.

Refinance. The completed scheme is held and refinanced onto longer-term investment or commercial finance. Here lenders focus on the evidence that a refinance is achievable: projected rental income, tenant or occupancy position, and the strength of the sponsor. A loan with a refinance exit is only as credible as the plan behind it.

Some schemes blend the two, selling part and holding part. If that is your plan, say so at the outset, because it affects how the deal is structured and which lenders are suitable.

If you are still funding the build itself, see our page on development finance. If your need is short-term funding secured on property for another purpose, see bridging finance.

What lenders look at

• The completed asset. Condition, practical completion status, and any outstanding works. Lenders usually rely on a valuation, and sometimes an independent assessment of the remaining position.
• The exit. How the loan will be repaid, how credible that is, and how long it is likely to take. This is usually the central question.
• Existing debt. The balance on your development facility, any other charges and the amount needed to redeem.
• Sponsor track record. Previous completed schemes and how they were exited.
• Legal and compliance paperwork. Building control sign-off, warranties and title position, as relevant to the scheme.
• Costs and term. Lenders price on risk and structure, so terms vary from lender to lender and deal to deal. Atlas shows you the realistic options for your scheme once it has been underwritten.

What you'll need to send

You don't need everything on day one. Start with what you have; Atlas tells you what's missing as the deal is underwritten.

• A short summary of the scheme: location, number and type of units, and current status
• Your existing development facility details, including the redemption statement or expected redemption figure
• Practical completion certificate or building control sign-off, and warranty documentation where available
• A current valuation, or the most recent one you hold
• Your sales evidence: agent appraisals, reservations, exchanged contracts and pricing schedule
• If refinancing: projected rental figures and any lettings or occupancy information
• Company structure, details of directors and sponsors, and a track record of previous projects
• Any outstanding works or snagging list with costs and timings

If something is missing, tell us. It is better to present a gap with a plan than to leave it for a lender to find.

How Atlas handles it

1. Describe the deal. In your own words, online or on WhatsApp.
2. We underwrite it. Atlas tests the exit, the numbers and the paperwork before anything goes to a lender.
3. We build the lender pack so the deal arrives ready to review.
4. We match it to suitable lenders on our panel.
5. You compare terms. Lenders respond on the platform, and we help you through to completion.

Because the deal is underwritten first, you get early feedback on whether the exit holds together, which is useful when a repayment date is approaching. We cannot promise any particular outcome, speed or terms; those depend on the lender and the deal.

Common questions

Other finance we arrange

• Development financeFunding for ground-up builds, conversions and refurbishment schemes.
• Bridging financeShort-term loans secured on property, repaid by sale or refinance.
• Business loans and working capitalGrowth, working capital and acquisition funding.
• Asset financeFunding for vehicles, plant, machinery and equipment.