We won't charge you any fees because we receive success fees from the agreements with our lenders if you decide to accept their offer of finance. However, this also doesn't mean you will be charged a higher rate from lenders.
Development Exit Financing
Cutting costs and giving you the cash you need to get on to the next projectSpeak to one of our experts020 4525 5312
- Replace costly development funding
- Short term large scale finance
- Any scale of project
- Funding may be arranged quickly
All types of development
- Residential and commercial
- Ground-up newbuild
- Interest roll-up or repayment
- Reduce finance costs with lower interest rates
- Release equity from project
- Support from Rangewell property experts
Development Exit Finance
Time is money in property development
Spend too much time trying to sell a project while you are on high rate finance, and your profits can rapidly be whittled away.
Table of Contents
What is a development exit loan?
Suppose your property project is completed or close to practical completion, and you're reaching the end of a loan period or are on a high rate. In this case, development exit finance can help provide a solution to all types of developers - whatever their experience.
It can replace your loan with your current lender with finance that is more affordable. This takes the pressure off, improving cash flow, giving you a longer period for sales to be completed, and getting the price you want for your completed residential developments.
But why do you need a new kind of funding?
At Rangewell, we know that there are many finance options to provide development finance, but at the end of the day, the main objective is to have the cash you need to:
- Buy land or property ready for redevelopment
- Develop your property schemes to completion
- Convert or refurbish that property to create a healthy profit
Rangewell helps many builders and developers find the cash they need to grow their businesses. For larger projects, a property development loan may cover 50 – 60% of the site/property value and up to 100% of the development costs.
Loan terms are flexible from 1 – 12 months and arrangements with no monthly interest payments may be available.
It can be a great way of funding a project, but costs are high, and there can be high penalty charges with some lenders if you over-run your initial agreed loan period. Unfortunately, this can happen all too often if your project runs into problems or if you can't find a buyer for your project as quickly as you planned.
If you're coming to the end of your agreed loan period and you haven't raised the repayment funds, it could mean extra costs that eat into your profits. Even if you are not making monthly repayments, the cost of borrowing will still increase month by month.
Development exit finance could help you cover the costs of your existing lending at a more affordable rate, ensuring you can complete the job and sell the property when you are ready - and for the price it deserves!
Why development exit finance costs less than development finance
Lenders that provide development finance may be taking a calculated but potentially costly risk. With conventional mortgages, the property itself provides security for a cash loan. If something goes wrong and the borrower cannot keep up repayments, the lender can take the property and sell it to recover the funding they have lent. This means their risk is small - they can afford to offer low rates of interest.
With a property undergoing development, there may be little or no value in the property while the work is being carried out. Partial demolition or removing roofs may mean the property loses any value it may have had and become a liability. The relatively high cost of Development Finance recognises this fact.
Development exit finance recognises that once your project is complete, it has a market value and becomes suitable for lending at a lower cost. As a short-term loan, the interest rates may still be higher than those of a long-term loan such as a mortgage, but they will be substantially lower than the high-risk funding required to fund your development.
How to use development exit finance
When your development project is completed, development exit funding will allow you to pay off the high-cost loan you had to arrange to fund the project itself. This will mean that the debt can be financed at a substantially lower interest rate.
This, in turn, means that there is no need to rush a sale or take a low offer.
What's more, you can use a development exit loan not just to pay off existing funding but to reflect the total market value of your completed project.
This means it can be a valuable tool to help you raise capital to purchase and fund the work on your next project.
How much can I borrow?
To find out how much you can borrow, you can use our quick quote calculator to get a feel for your monthly repayment costs and the period of time you'll be making your repayments. Alternatively, please get in touch with our friendly team to discuss your requirements. Then, we can create a tailored finance agreement to suit your specific needs. We'll aim to get an answer to you within 24 hours.
How will you repay?
Monthly interest will be charged, but it may be possible to roll up this charge, leaving you with no monthly repayments to make, as before.
The property can then be sold, and the lenders repaid.
What are the benefits of development exit loans with Rangewell?
At Rangewell, we work across the property development sector. We're experts in commercial and property lending and know that every deal is different. Our team includes property development experts who can work with you to understand your needs and the potential of your project.
We know every project is different, so we make every loan application tailored to your individual needs and circumstances and ensure that it reaches suitable lenders the first time around, saving you valuable time.
If you believe you will reach the completion stage of your project without a customer ready to purchase and are prepared to reduce the cost of your financial commitments by taking advantage of a more appropriate financial solution, call us.
The sooner you start talking to us about arranging the replacement funding you need, the better your chances of reducing your costs overall.
What information do I need to provide?
When applying for exit strategy finance, you'll typically need the following:
- Income statements and balance sheets covering the past 2 years
- Up to date financial statements
- Business plans or projected plans to show the direction your business is taking
- Tax returns to verify your income statements
- Bank accounts for verification
How long does it take to be approved?
After inputting your details, you will have detailed results and introductions within 24 hours. The lenders we work with will not approach you or call you. You are in control of how you wish to proceed at all times.
Last update: 7 February 2022
Frequently asked questions
Have a question?
Defaulting on a loan will have severe consequences, such as having your debt passed on to a collection agency, being taken to court, or removing your personal assets. For example, if you have a loan secured with a car or home, it could be repossessed to recover the costs.
There are differences between development finance and property finance. Those who are applying for development finance will use this for property development purposes. This means it's specialist finance that's better suited to those who:
- Are looking at renovating a properly from a plot of land
- To cover construction costs
- To extend or build up a new property
Property finance is used for the following:
- Help fund the purchase of residential and commercial properties
- They are secured loans
- They are used to avoid traditional property chains
Short term business financing includes financing with terms less than 24 months. Unfortunately, traditional lenders typically do not offer short-term small business loans. This is why Rangewell works with specialist lenders who can create an offer tailored to your needs.
Commercial development finance is a category of business financing products to fund residential, commercial, or mixed-use development projects. There are different types of property development finances, including mortgages, short and long-term loans, bridging loans, and refurbishment loans. This type of loan can be used to upgrade or expand existing buildings, change the purpose of existing buildings, or build new developments from the ground up.
Download Rangewell’s free and detailed guide to Property Development Finance
Is there a difference between development finance and property finance?
What is classed as short term business finance?
Can commercial mortgages be used for development projects?
Do finance providers need to be authorised and regulated by the financial conduct authority?
What is classed as commercial property?
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