Developer exit finance is a type of financing that is used by developers to refinance or sell a completed or nearly completed property development. It is a short-term, specialist bridging facility that is offered at a lower rate than your existing development loan for your project.
Developer exit finance is typically used for the following purposes:
- To refinance the development loan: This can be done to release equity, buy more time, or transfer to a cheaper finance option.
- To sell the property: Developer exit finance can be used to bridge the gap between the sale price of the property and the outstanding development loan balance. This allows the developer to sell the property quickly and without having to wait for the development loan to be repaid in full.
There are a number of benefits to using developer exit finance, including:
- Flexibility: Developer exit finance can be tailored to meet the specific needs of the developer and the project.
- Speed: Developer exit finance can be arranged quickly, which is important for developers who need to sell their property quickly.
- Competitive rates: Developer exit finance is typically offered at lower rates than development loans.
- Release of equity: Developer exit finance can be used to release equity from the property, which can be used to fund the developer’s next project.
How to qualify for developer exit finance
To qualify for developer exit finance, you will typically need to meet the following criteria:
- Have a good track record as a developer: You will need to have a good track record of completing development projects on time and on budget.
- Have a strong exit strategy: You will need to have a strong exit strategy for the property, which could involve selling the property, refinancing the development loan, or transferring the property to a new owner.
- Have a good credit history: You will need to have a good credit history and be able to afford the monthly repayments on the loan.
How to apply for developer exit finance
To apply for developer exit finance, you will need to contact a specialist lender. You will need to provide the lender with information about the property, the development loan, and your exit strategy. The lender will then assess your application and make an offer of finance.
Tips for getting the best deal on developer exit finance
Here are a few tips for getting the best deal on developer exit finance:
- Shop around: Compare the rates and terms of different lenders before choosing a loan.
- Get pre-approved: Getting pre-approved for a loan will give you an idea of how much you can borrow and what your monthly repayments will be.
- Have a strong exit strategy: The more detailed your exit strategy, the more likely a lender is to approve your loan and offer you a competitive rate.
Developer exit finance can be a valuable tool for developers who need to refinance or sell a completed or nearly completed property development. It is a flexible and affordable type of financing that can help developers to achieve their goals.
If you are considering using developer exit finance, be sure to shop around and compare the rates and terms of different lenders. It is also important to have a strong exit strategy in place before you apply for a loan.