Development Exit Finance in Aldridge
Contact UsTrend Finance Solutions helps property developers secure development exit finance in Aldridge when a development is complete or approaching completion.
Development exit finance can be used to refinance an existing development loan, potentially reduce ongoing borrowing costs and provide additional time to sell completed properties or arrange longer-term finance.
Contact our team today to discuss your development exit finance requirements.
What is Development Exit Finance?
Development exit finance is a short-term funding solution designed for property developments that are complete or nearing completion.
Developers in Aldridge can use exit finance to refinance an existing development facility once significant construction work has been completed.
Rather than remaining on the original development finance while completed units are being marketed or sold, the outstanding borrowing can potentially be moved onto a development exit facility.
Depending on the lender and development, exit finance may also allow developers to release some of the equity tied up in a completed project.
The lender will consider factors such as the current value of the development, outstanding borrowing, remaining works, expected sales value and proposed repayment strategy.
Trend Finance Solutions can help you explore suitable development exit finance based on your project and borrowing requirements.
How much does Development Exit Finance Cost in Aldridge?
Development exit finance interest rates in Aldridge can typically range from around 0.5% to 1.5% per month, although the rate available will depend on the lender, development, loan-to-value ratio and circumstances.
The overall cost of development exit finance can depend on:
The amount you need to refinance
The current value of the development
The expected value of completed units
The loan-to-value ratio (LTV)
The remaining term required
Whether any construction work remains outstanding
The proposed exit strategy
Your financial circumstances
Additional costs may include lender arrangement fees, valuation fees, legal costs and broker fees where applicable.
Interest may be paid monthly or added to the balance for repayment when the facility is redeemed, depending on the lender and finance arrangement.
Contact us for an indication of the potential rates and costs based on your development.
What can Development Exit Finance be Used for?
Development exit finance in Aldridge can be used for several purposes once a property development has reached the later stages of construction or has been completed.
Common uses include:
Refinancing development finance: Replace an existing development facility once the project is complete or approaching completion.
Providing additional sales time: Allow more time for completed properties to be marketed and sold.
Releasing equity: Some facilities may allow developers to release capital tied up in a completed development, subject to lender requirements.
Funding another development: Equity released from a completed project may potentially be used towards another property development.
Completing minor works: Some lenders may consider developments where relatively minor works remain outstanding.
Moving to longer-term finance: Exit finance can provide temporary funding while another longer-term finance arrangement is being completed.
The suitability of development exit finance will depend on the stage of the project, existing borrowing and your plans for repaying the facility.
How much can I Borrow with Development Exit Finance?
The amount you can borrow with development exit finance will depend primarily on the value of the completed development, existing borrowing and the lender's loan-to-value requirements.
Lenders will typically consider the current market value of the development and, where applicable, the value of individual completed units.
They may also assess:
The outstanding balance of the existing development finance
The number and value of completed units
Any units that have already been sold
Remaining construction work
Expected sales timescales
Your proposed exit strategy
Where the value of the development has increased during construction, it may also be possible to release some additional capital when refinancing, subject to lender criteria.
Trend Finance Solutions can review your existing development facility and help you explore the exit finance options that may be available.
What are the Benefits of Development Exit Finance?
Development exit finance can provide developers with greater flexibility once the construction phase of a project is complete or nearing completion.
Potential benefits include:
Refinance existing development borrowing: Move away from the original development finance once the project reaches an appropriate stage.
More time to sell: Avoid relying on an immediate sale of all completed units to repay the original development facility.
Potentially lower borrowing costs: Exit finance may offer different rates and terms from the existing development facility.
Release equity: Depending on the lender and available equity, additional capital may be released from the development.
Fund future projects: Released capital may potentially be used towards another property acquisition or development.
Flexible exit options: The facility may be repaid through property sales or refinancing, depending on the circumstances.
Development exit finance is still a short-term form of borrowing, so a realistic strategy for repaying the facility remains important.
When can I Use Development Exit Finance?
Development exit finance is generally considered when a property development is complete or sufficiently close to completion for a lender to offer an exit facility.
The exact stage required varies between lenders. Some may require the development to be fully complete, while others may consider projects where only minor works remain.
For completed residential developments, lenders may also consider factors such as building control sign-off, warranties, the number of completed units and whether properties are already being marketed or sold.
If your existing development finance is approaching the end of its term, it can be useful to explore exit finance before the facility expires.
Get In Touch
If your property development in Aldridge WS9 8 is complete or approaching completion, Trend Finance Solutions can help you explore suitable development exit finance options.
Contact our team today to discuss your existing development finance, current project value and plans for repaying the facility.
Frequently Asked Questions
What is the Difference Between Development Finance and Development Exit Finance?
Development finance is primarily used to fund the acquisition and construction stages of a property development.
Development exit finance is generally used later, once construction is complete or approaching completion. It can refinance the original development facility while completed properties are sold or longer-term finance is arranged.
Does a Development Need to be Fully Complete?
Not always. Some lenders may consider development exit finance where a project is approaching completion and only minor works remain.
The stage at which finance becomes available will depend on the lender, property and outstanding work.
How Long can I Have Development Exit Finance for?
Development exit finance is intended as a short-term funding solution. Terms can vary depending on the lender, development and proposed exit strategy.
The facility should provide sufficient time for the agreed repayment strategy, such as selling completed units or refinancing, to take place.
Can I Release Equity with Development Exit Finance?
Potentially. If sufficient equity has been created within the development, some lenders may allow additional capital to be released when the existing development finance is refinanced.
The amount available will depend on the development value, outstanding borrowing and lender criteria.
How is Development Exit Finance Repaid?
Development exit finance is commonly repaid through the sale of completed properties or by refinancing onto another suitable finance product.
Lenders will want to understand the proposed exit strategy before agreeing to provide the finance.
Can I Get Development Exit Finance if Some Units have Already Sold?
Potentially. A lender can consider the remaining units, their value, outstanding borrowing and the overall position of the development when assessing an application.
Any previous sales and reductions in the existing development debt may form part of that assessment.
We cover Aldridge (West Midlands)