The Bridge Fusion Route for Longer-Term Development Exit

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In the current market, what many developers are desperate for is more time, and a bit of breathing space. It’s notoriously hard to get anything built in the UK at the moment, and even towards the final stages of a development, roadblocks can emerge. Roadblocks that can be logistical, or financial in nature.

While we do not offer ground up development finance here at Market Financial Solutions, we do offer development exit funding. This is capital that’s typically used to clear original development finance, and/or finalise plans.

But, in some instances, particularly challenging developments need even more time to complete, or they may even be complete and are in the sale period, but tough market conditions may require more time to sell units.

This is where our Bridge Fusion product can be of use. A Bridge Fusion loan can be used for a development exit, and with a term of up to 24 months (with a discretionary 12-month extension), compared to 18 with our standard bridging loan, it may be a better option for longer term plans.

Say a borrower had a development which had practical completion, and the building regulations signed off. It has 10 units, with a total worth of £2m. The borrower may plan to use the developments for a part retained/part sold, or fully sold strategy.

But the market at the time may not be conducive to this. Perhaps the underlying units are of a high value, making them harder to sell. Or, maybe the local region is in a temporary downturn, meaning there are fewer buyers generally.

To mitigate this, the borrower may opt to sell £500k worth of properties each year, totalling £1m from months 6 – 21 of the term. Our Bridge Fusion product allows for 25% overpayments per loan without incurring early repayment charges (ERC) and, by overpaying after the first six months, they could lower their costs with a Bridge Fusion loan.

Also, while individual borrower’s circumstances will determine the set up of their loans, those with longer term plans will typically see lower repayments with a Bridge Fusion loan, over our standard bridge. At 75% LTV, the monthly repayments on a Bridge Fusion loan could be significantly cheaper.

What’s important to remember is that regardless of whether a property investor needs a short-term, or longer-term solution, Market Financial Solutions will have many options available.

FAQs

Why is development exit finance advantageous?

Completing a development is only half the journey. Developers often need time to sell units or refinance onto longer-term debt. Many face tight deadlines with their original lenders, and delays can result in hefty penalties or missed opportunities. A bridging loan for development exit can help to repay the development lender and secure breathing space to sell the completed units at the best market value.

How can you deliver funding quickly?

Timing is critical for developers who need to exit before their existing funding expires. We start underwriting from day one so we can quickly assess the completed site, sales pipeline, and the client’s exit strategy. We also have several funding lines and in-house capital available. Our ability to act swiftly means developers can avoid unnecessary fees from their original lender. By moving fast, we can give borrowers certainty when they need it most.

Why is flexibility so valuable for development exits?

Every scheme has its own unique aspects. Some units may already be sold, some may be under offer, and market conditions can shift quickly. At Market Financial Solutions, we’re not bound by rigid policies. For this project, we structured a bespoke facility that covered multiple units, considered the sales timeframe, and worked with the borrower’s cash flow. This level of flexibility gave the developer the breathing room they needed to secure the best returns.