Development exit loans can help developers to manage their cash flow while they market a completed scheme, and they are proving particularly popular in the current market, so what do you need to know?
Many developers are in a position where they are asset rich and cash poor, particularly when they near the end of completing a development. Their options at this stage depend on their intentions for the scheme.
If they are retaining the development to let out developers will usually refinance onto a longer-term solution. For those who are selling the properties they have developed, there is the option to buy extra time and release equity with a development exit loan.
A development exit loan is a short-term loan that allows a developer to refinance their completed scheme, often at a lower rate than their development finance facility. This can provide a saving on interest payment and give them more time to achieve the best sales price and most investors also release equity from the scheme to use towards future projects.
It provides developers with the flexibility to take money out of scheme before they have sold the properties and can often be completed in a matter of days.
At Brightstar, we recently completed a development exit facility worth £1.2 million in just eight days from the initial enquiry.
If you are working with developer clients you are considering their options as they approach the completion of a scheme, give Brightstar a call as we can help with both scenarios.
If the developer wants to buy extra time to sell the property and is considering releasing equity as part of this process, our Short Term Lending team can source the most suitable development exit solutions available. If, on the other hand, they want to hold on to the development to let out, we can pass the enquiry onto our Buy-to-Let team who will be able to identify the best options to refinance. And, if they are undecided as to the most appropriate course of action, we can look at both options and provide the necessary information to help them make an informed decision.
FIND OUT MORE / ENQUIRE
READ MORE OF THIS MONTH’S EZINE CONTENT:
LATER LIFE LENDING
SECOND CHARGE MORTGAGES
SPECIALIST RESIDENTIAL MORTGAGES
FOR INTERMEDIARIES ONLY AND NOT INTENDED FOR THE GENERAL PUBLIC