Development Exit Finance is a short-term loan, used to repay outstanding finance against a property development once the project has reached practical completion.

Property developers, large and small, use development exit finance to maximise the profits that they can draw from a newly completed property development. This can let them obtain the start up capital for their next project while awaiting a suitable buyer for their completed project.

They also use it to withdraw from a project that’s going to prove unprofitable and where development exit finance will allow them to repay their existing finance resulting in a lower value loan that only reflects the capital spent, coupled to a repayment term that will give them time to sell on the unfinished project without seriously damaging their cash flow position.

Where the development is a private one off project, such as a self build home, that will be used by the developer for their own residential use or, where they have developed the property for the rental market with themselves as the landlord.

In these cases, the original development finance will generally be for reasonably smallish amounts, allowing the property to be financed long term through normal mortgage channels. This will allow some of the equity in the completed property to be released to repay the original development loan and/or provide any additional money required by the owner.