Loan amount:
£100k - £30m
Rate from:
0.69%
Loan-to-value:
up to 75%
Term length:
3 -24 months
Overview
We provide developer exit loans for property developers who are in need of urgent funding. Our loans can be used by an individual borrowers or lent by a limited company.
Key information
What is a development exit loan?
At the start of the development process, property developers will first need to purchase land and apply for development finance to fund the project*. Then construction can commence. As the project begins to draw to a close, the developer needs to start thinking about how they intend to repay the development loan once the development has finished. This is when a developer exit loan can be utilised.
- Release equity
- Reduce financial stress and cost
- Relieve the pressure of deadlines and provide more time to sell the new assets
*MFS do not supply development loans that require planning permission or involve structural changes. We also do not lend against land. We can provide development exit loans to help finish their development if the asset has practical completion and building regulation sign off in place.
What are development exit loans used for?
Key benefits include:
- It gives you the breathing space to find the right buyers and sell the properties for a premium price
- You do not need to cut property prices to sell them quickly
- Provides ample time to implement a long-term mortgage or other finance solution
What is the difference between development finance and development exit finance?
Development Loan:
A development loan is when the funds provided are being used to construct the properties from ground up.
Development Exit Bridging Loan:
A development exit loan is for when the properties are built and allows the developer to pay back the initial development finance.
What are the advantages of using a Development Exit Bridging Loan?
1) They create more time to sell the units individually
- Whether this relates to several individual builds or a block of flats. It provides you with additional time to wait for right buyers who are more likely to purchase at the asking price. As each unit sells, you use all or a portion of the funds to pay back the development exit finance. Therefore, you’ll be reducing your bridging loan and the interest payable as each unit sells.
- This is a flexible option, with many ways to set up the agreement and repayment terms. As leaders in bespoke bridging, you can tailor your loans so that they fit your requirements.
2) Pay back the development bridging loan and organise a long-term finance solution
- Development finance can become expensive when it runs over due to extension charges from the development lender. Finding a long-term finance solution on a new development can take some time.
- This product allows you to bridge a gap between the end of your initial development loan and the completion of your long-term solution. This will also provide a strong exit strategy for your developer exit loan.
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