Development Exit Finance in Frampton Cotterell
Get In TouchJPM Residential helps property developers arrange development exit finance in Frampton Cotterell.
Development exit finance allows developers to refinance an existing development facility once a project is complete or nearing completion. It can help repay development finance, reduce borrowing costs, release equity or provide additional time to sell completed properties.
Whether you have completed a residential development, have units remaining to sell or want to release capital for your next project, we can help you find suitable development exit finance.
What is Development Exit Finance?
Development exit finance is short-term property finance used to refinance a development project once construction is complete or substantially complete.
It is commonly used to repay an existing development finance facility and replace it with finance designed for the period between completing the development and selling or refinancing the finished properties.
Development exit finance in Frampton Cotterell can also allow developers to release some of the equity created during the development.
JPM Residential can assess your completed or near-completed project and help identify suitable development exit finance options.
When Might you Need Development Exit Finance?
Development exit finance in Frampton Cotterell can be useful when a project is approaching completion but the existing development facility is no longer suitable.
Common reasons include:
Repaying existing development finance
Reducing the cost of existing borrowing
Allowing additional time to sell completed units
Releasing equity from a completed development
Improving cash flow after construction
Funding the final stages of a project
Releasing capital for another development
Refinancing while completed units are being sold
The right finance will depend on the development, outstanding borrowing, completed value and your plans for repaying the new facility.
What Projects can Development Exit Finance be Used For?
Development exit finance can be available for a range of completed and near-completed property developments in Frampton Cotterell.
These can include:
Residential developments
New-build houses
Apartment developments
Commercial developments
Mixed-use developments
Property conversions
Lenders will normally assess how much of the development has been completed, its current value, expected completed value and the proposed exit strategy.
Who can get Development Exit Finance?
Development exit finance is primarily designed for property developers with projects that are complete or approaching completion.
We can help clients including:
Property developers
Residential developers
Commercial developers
Limited companies
SPVs
Developers with completed units remaining to sell
Developers looking to release equity for another project
Lenders will typically consider the development value, outstanding finance, construction progress, loan-to-value ratio and proposed repayment strategy.
Contact JPM Residential to discuss your development and the exit finance options that may be available.
How Much can I Borrow with Development Exit Finance?
The amount you can borrow with development exit finance depends on the value of the completed development, outstanding borrowing, loan-to-value ratio and lender criteria.
Development exit lenders in Frampton Cotterell may offer finance of up to around 70% to 75% loan-to-value (LTV) in suitable circumstances, although maximum lending varies between providers and projects.
If some units have already been sold, the lender may assess the value of the remaining properties when determining the available facility.
The amount available must normally be sufficient to repay the existing development finance and associated costs.
JPM Residential can review your development and existing borrowing to help establish how much exit finance may be available.
Can I Release Equity with Development Exit Finance?
Yes, development exit finance can potentially be used to release equity from a completed or near-completed development.
If the development has increased in value and there is sufficient equity after repaying the existing finance, a new lender may allow additional capital to be released.
Developers may use released equity to:
Fund another property development
Purchase land
Provide a deposit for another project
Improve business cash flow
Cover remaining development costs
The amount of equity that can be released will depend on the development value, outstanding borrowing and maximum LTV available.
How Much does Development Exit Finance Cost?
Development exit finance interest rates in Frampton Cotterell can typically be around 0.75% to 1.5% per month, although rates vary depending on the development, loan-to-value ratio, loan amount and borrower circumstances.
Additional costs can include:
Lender arrangement fees
Property valuation fees
Legal fees
Broker fees where applicable
Exit fees where charged by the lender
The overall cost will also depend on how long you keep the facility before it is repaid.
Replacing an existing development facility with exit finance may reduce borrowing costs in some circumstances, particularly when the development risk has reduced following completion.
Contact JPM Residential to compare development exit finance rates and costs based on your project.
How does Development Exit Finance Work?
Development exit finance works by replacing an existing development finance facility with a new loan secured against the completed or near-completed development.
The process normally involves the following stages:
Initial Assessment: We discuss the development, construction progress, existing finance, completed value and proposed exit strategy.
Lender Search: Suitable development exit lenders are identified based on the project.
Application: Information about the development, borrower and existing borrowing is submitted.
Valuation: The lender may arrange a valuation to establish the current or completed value of the development.
Loan Offer: If the project meets the lender's criteria, a formal development exit finance offer is issued.
Existing Finance Repaid: The new facility is used to repay the outstanding development finance.
Equity Released: Additional capital may be released where sufficient equity is available and lender criteria are met.
Repayment: The exit finance is eventually repaid through property sales or longer-term refinancing.
JPM Residential can help compare development exit finance options and manage the refinancing process through to completion.
How Long does it Take to get Development Exit Finance?
Development exit finance can typically take around 2 to 4 weeks to arrange.
The timescale depends on the lender, development valuation, legal work, construction progress and how quickly the required information is provided.
Applications may progress more quickly when the development is complete, the necessary documentation is available and the proposed exit strategy is straightforward.
JPM Residential can liaise with lenders and help keep the refinancing process progressing towards completion.
Frequently Asked Questions
Does the Development Need to be Completely Finished?
Not always. Development exit finance may be available when a project is substantially complete rather than fully finished.
The lender will assess the remaining works and determine whether the development meets its criteria for exit finance.
Can I get Development Exit Finance if Units are Unsold?
Yes. Allowing developers additional time to sell completed units is one of the common uses of development exit finance.
The lender will assess the remaining units, their value and the expected sales strategy.
Can Development Exit Finance Repay my Existing Development Loan?
Yes. Repaying an existing development finance facility is one of the primary purposes of development exit finance.
The new facility replaces the development loan once the project has reached the required stage.
Can I Release Money for my Next Development?
Potentially. If sufficient equity has been created in the completed development, development exit finance may allow some of that capital to be released.
The amount available will depend on the property value, existing borrowing and lender's maximum LTV.
Can a Limited Company get Development Exit Finance?
Yes. Limited companies and SPVs can apply for development exit finance, subject to lender criteria.
The lender may assess the company, directors, development, outstanding borrowing and proposed exit strategy.
How do I Repay Development Exit Finance?
Development exit finance is commonly repaid through the sale of completed properties or refinancing onto longer-term property finance.
Your proposed repayment method will normally be assessed by the lender before the facility is approved.
Get In Touch
JPM Residential can help you find development exit finance for completed and near-completed property developments in Frampton Cotterell.
Whether you want to repay existing development finance, release equity or give yourself additional time to sell completed units, contact us to discuss the options available.
We cover Frampton Cotterell (Gloucestershire)