Development Exit Finance
Development exit finance: move on at the right time with lower costs
Development exit loans are different from other development loans as they are based on a real asset that is almost or entirely concluded, thus offering good loan to value ratios, lower risks, lower borrowing rates and different repayment schemes.
You can use a development exit loan to recover your capital sooner or take up a new investment opportunity before your project comes to completion. Development exit finance can be a good exit strategy, reducing financing costs and allowing you to fast forward to newer, bigger projects.
Why choose a development exit loan?
There are many reasons why you may choose to go with a development exit loan:
– If the financing on your current project is coming to an end but completion works and sales will still take some time to be concluded, a development exit loan could be the right answer to take the pressure off your shoulders and give you the extra time you need.
– If your project is not yet finalised but an exciting opportunity to start a new one comes along and you don’t want to miss out, it might be worth it to change your exit strategy and quickly move on. Flexibility and speed can be decisive competitive advantages.
– Development exit finance can help you increase your margins with a longer sale strategy, removing the time pressure of impending terms and repayments, while assuring the fluidity of your cash flow.
An effective, flexible development exit strategy can protect your investment from market fluctuations that may impact your profit. Getting out at the right time, or deciding to take longer to complete sales, could be crucial to your success.
As your project approaches completion, you can also reduce your financing costs. Development exit loans are a form of bridging a loan with smaller risks. Accordingly, lenders will offer you more attractive rates and better repayment conditions. So, besides offering you the agility to start a new investment before the completion of the former one, development exit loans can add a big plus sign to your profits.
How do you obtain a development exit loan?
Obtaining a development exit loan is a fairly straightforward and quick process. You will have to supply details of your current loan, marketing strategy, new build warranties and the schedules of works still to be completed.
Typically, you will also need to provide current financial statements, an up-to-date business plan, tax returns and bank account information. There may be extra costs to consider too, from arrangement fees, which most lenders charge based on the size of the loan you’re looking for, to valuation fees, levied when a lender does a new valuation of your project.
Take some time to evaluate your exit strategy, considering the risks it entails for your margin and the opportunity costs of not taking other opportunities that are available right now. Is there something you’d like to do differently?
Get in touch
Your Financial Toolbox can help you find the right solution for your development exit loan. Taking into consideration the status of your project, we offer the best loan to value with attractive rates. We also provide flexible solutions with monthly payments or rolled up interest through our partners, investors, and private lenders.
Our experienced team understands the needs of developers. Through our wide catalogue of financial options, ranging from senior debt to bridging loans, joint ventures to profit sharing, we’ll find the funding you need to keep growing.
Your Financial Toolbox will find the best development exit finance solution for your specific case, minimising your risks, reducing your financing costs, and helping you to move faster and smarter than the competition. Talk to us today.