An experienced property developer approached us looking for a development exit loan to refinance an 11-unit residential scheme in Norfolk. The project was nearly complete, with some houses already sold and others attracting strong interest.
To allow enough time for the remaining sales to go through, the borrower needed a flexible short-term facility to replace their existing development loan which was approaching expiry.
The Problem
The developer’s original (development) lender had already extended the loan once and was unwilling to extend it again. With a hard deadline approaching, the client needed a new lender who could move quickly and offer a flexible exit loan.
At the time:
- 4 out of 11 homes had sold (including two affordable units and two private sales)
- 7 homes remained unsold, although some had offers or active interest
- Gearing was 56% of GDV, and expected to drop further as more units sold
Because the project was nearly complete and gearing was low, the developer was focused on getting the most competitive price possible.
Our Approach
We arranged a £4.3m development exit loan at 62%LTV with a new lender. They were able to work to the borrower’s timeline and offer better flexibility. The loan was secured against the remaining unsold units and structured to provide breathing space while sales progressed.
The key features included:
- A 12-month term that gave the developer room to complete sales without being rushed.
- A competitive rate that reflected the strength of the asset and the experience of the borrower.
- The option to reduce the loan balance over time, as more homes were sold.
To conclude, this case shows how the right exit finance can give developers the flexibility they need to complete a project on their terms. With the original lender unable to extend, we provided a solution that aligned with both the timeline and the quality of the asset. The developer stayed in control of their sales strategy and is now able to complete the final stage of the project without pressure.
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