A developer in Suffolk had four new-build houses 80% complete — but the development loan was burning at 1.0% per month, with only two months of term remaining. The options were stark: sell quickly at a discount to clear the loan, or find exit finance to refinance the development facility, complete the remaining works, and sell at full market value. We arranged a £924,000 development exit facility in three weeks that reduced the monthly rate from 1.0% to 0.65% and gave the developer a 12-month runway to finish and sell.
| Detail | |
|---|---|
| Finance type | Development exit finance (pre-practical completion) |
| Exit facility | £924,000 |
| Site location | Suffolk (4 new-build detached houses) |
| Build completion | 80% complete at time of refinance |
| Existing facility | £850,000 at 1.0% per month |
| Existing term remaining | 2 months |
| Exit facility rate | 0.65% per month |
| Exit facility term | 12 months |
| Projected GDV (4 houses) | £1,850,000 |
| LTGDV at exit | 50% |
| Monthly interest saving | £3,225 (from £8,500 to £5,275) |
| Time to completion | 3 weeks |
The houses were 80% complete — not finished, but structurally sound with weathertight envelopes and internal works progressing. Most development exit lenders require practical completion before they'll lend, as their product is designed to bridge the gap between completion and sale, not to fund finishing works. The number of lenders willing to provide exit finance before practical completion is small, and those that do typically cap the LTV at 60-65% and require detailed evidence of the remaining works programme and cost.
The existing development loan had only two months of term remaining. At 1.0% per month on £850,000, the interest accrual was £8,500 per month — and the lender was not inclined to extend. If the developer couldn't refinance within those two months, the lender could enforce, forcing a quick sale at a significant discount. The exit finance had to be arranged, underwritten, valued, and legally completed within a very tight window.
The remaining 20% of works included external landscaping, driveways, kitchen installations in two of the four houses, and final snagging. The exit facility needed to not only repay the existing development loan (£850,000) but also provide approximately £74,000 for the remaining works — totalling £924,000. The lender needed to see a detailed remaining-works schedule with cost breakdown to justify the additional advance.
We identified a lender that offers a specific pre-practical completion exit product. This lender understood that 80% complete is very different from 50% complete, and that the remaining works — landscaping and kitchens — are low-risk compared to structural works. The 50% LTGDV (against a £1.85 million GDV) was well within the lender's 65% threshold for pre-completion exits, making this an attractive deal for them.
The £924,000 facility was structured in two parts: £850,000 to repay the existing development loan in full (including accrued interest and fees), and £74,000 held back for the remaining works, released against a simple drawdown schedule. The rate of 0.65% per month compared to the existing 1.0% saved £3,225 per month — and the 12-month term gave the developer time to complete the works, market the properties properly, and achieve full market value rather than a fire-sale price.
The financial case for the refinance was compelling. Over the 12-month term, the interest saving alone was approximately £38,700 compared to the existing facility — and that's before factoring in the additional sale proceeds from achieving full market value rather than a pressured sale. The developer estimated that a forced sale within two months would have achieved £1.65 million — £200,000 below the projected GDV. The combination of interest savings and higher sale proceeds made the exit finance a clear financial win.
💡 Key point on development exit timing: The best time to arrange exit finance is when you have 3-4 months of term remaining on your development loan — not when you have 2 months. The tighter the timeline, the fewer lenders will move fast enough, and the more pressure there is to accept suboptimal terms. Plan your exit strategy early.
Reviewed the existing facility, remaining works programme, and GDV evidence. Identified the pre-completion exit lender and submitted a full credit pack including remaining-works cost breakdown and comparable sales evidence.
DIP issued within 48 hours given the low LTGDV and clear credit profile. Desktop-plus-inspection valuation completed in 5 working days. Legal work expedited given the term pressure on the existing facility. Completion achieved with 2 weeks to spare on the original loan.
"The developer was two months from a forced sale that would have wiped out £200,000 of profit. We replaced a 1% development loan with a 0.65% exit facility in three weeks, gave him 12 months to finish and sell, and saved him £3,200 a month in the process. This is what development exit finance is for — and why every developer should have an exit strategy before they need one."
— MW Capital AdvisoryIf your development facility is running out of term, don't wait for the lender to force a sale. We can arrange exit finance in weeks — even before practical completion — and significantly reduce your monthly interest cost. Speak to us before the clock runs out.
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