# Property Development Exit Loans: What They Are, How They Work
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-04-25
Category: FINANCE
Category URL: https://financedigest.com/category/finance
Meta Title: What are Property Development Exit Loans?
Meta Description: A property development exit loan offers developers the flexibility to retain ownership of their development, giving them time to secure a longer-term refinance
URL: https://financedigest.com/property-development-exit-loans-what-they-are-how-they-workhtml

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Many developers sell their properties upon completion, raising the funds needed to repay their development finance facility outright. But what if you decide you prefer to retain ownership of the development, in order to let it out for long-term gains?

Likewise, what happens if you are unable to find a viable borrower for your property by the deadline agreed with your lender, or would like to hold out to get a better price for it?

In both instances, the answer could lie in a [property development](https://www.financedigest.com/bridging-finance-for-property-development.html "Bridging Finance for Property Development") exit loan.

**What is a Property Development Exit Loan?**

[![](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/ukpf-logo-square-1736815834970-compressed.jpg)](https://ukpropertyfinance.co.uk/development-finance/types/development-exit-finance/)

 [A property development exit loan](https://ukpropertyfinance.co.uk/development-finance/types/development-exit-finance/) is a specialist short-term facility, used to repay an initial development finance product in full. It is essentially a large [bridging loan](https://www.financedigest.com/common-uses-for-bridging-loans-and-what-youll-need-to-get-one.html "Common Uses for Bridging Loans and What You’ll Need to Get One"), which provides the developer with additional room for manoeuvre when their original loan term comes to an end.

For developers who decide to retain their [properties for any reason](https://www.financedigest.com/5-reasons-why-women-need-to-get-into-property-investing.html "5 Reasons why women need to get into property investing"), a development exit loan can provide ample time to secure a longer-term refinance product, like a buy-to-let mortgage. Elsewhere, it can [provide anything from 1 to 24 months’](https://www.financedigest.com/independent-study-finds-infinidat-storage-can-provide-customers-125-roi-over-three-years-and-payback-in-less-than-six-months.html "Independent Study Finds INFINIDAT Storage Can Provide Customers 125% ROI Over Three Years and Payback in Less than Six Months") breathing room, while a suitable buyer for the development is found or a decision made about what to do with it.

**What Are the [Benefits of Property Development](https://www.financedigest.com/the-benefits-of-developing-online-stores-through-shopify.html "The Benefits of Developing Online Stores Through Shopify") Exit Loans?**

Just a few of the potential benefits of a [competitive property development exit loan include the following:](https://www.financedigest.com/tmwi-appointed-by-zupa-following-a-competitive-pitch.html "tmwi appointed by ZUPA following a competitive pitch")

- The developer is able to repay their original [development finance](https://www.financedigest.com/what-skills-and-areas-of-knowledge-should-finance-teams-develop-during-2023.html "What Skills and Areas of Knowledge Should Finance Teams Develop During 2023? ") product on time, avoiding potential fees and penalties for late payment
- Interest [rates and borrowing costs are lower](https://www.financedigest.com/how-insurtech-is-helping-to-lower-car-insurance-rates.html "How InsurTech is Helping to Lower Car Insurance Rates") than those of a typical development finance product, as the lending risk is reduced
- Property development exit loans provide developers with additional time to find suitable buyers for the developments and [negotiate higher prices](https://www.financedigest.com/bristol-myers-pfizer-abbvie-drugs-likely-to-face-u-s-price-negotiation.html "Bristol Myers, Pfizer, AbbVie drugs likely to face U.S. price negotiation")
- Interest can be rolled up into the final loan repayment, meaning no monthly [payments need to be made along the way](https://www.financedigest.com/5-ways-to-maximise-the-value-of-instant-payments.html "5 ways to maximise the value of instant payments")

In essence, a property development exit loan works like an extension to the original development [finance](https://www.financedigest.com/1-in-3-uk-businesses-looking-for-finance-are-finding-it-harder-to-get-a-loan.html "1 in 3 UK businesses looking for finance are finding it harder to get a loan") loan.

**What Are the Main Features of Property Development Exit Loans?**

All property [development exit loans are bespoke products](https://www.financedigest.com/market-realist-snags-motley-fool-analyst-brings-on-product-development-guru.html "Market Realist Snags Motley Fool Analyst, Brings on Product Development Guru"), but the following features apply in most instances:

- High LTV available up to 75% (sometimes higher in special circumstances)
- Low monthly interest of as little as 0.5% or lower
- No exit [fees or excessive additional borrowing costs](https://www.financedigest.com/the-cost-of-buying-a-leasehold-why-can-it-cost-more-in-conveyancing-fees.html "The Cost of Buying a Leasehold: Why Can it Cost More in Conveyancing Fees?")
- Available at short notice for projects approaching completion
- Can be taken out against almost any [type of property](https://www.financedigest.com/apartment-prices-rising-faster-than-any-other-property-type-new-data-reveals.html "Apartment prices rising faster than any other property type, new data reveals ")
- [Loans sizes available from £100,000 to £50 million](https://www.financedigest.com/britains-lloyds-racks-up-350-million-of-likely-scam-covid-loans.html "Britain’s Lloyds racks up 0 million of likely scam COVID loans")
- Flexible terms of 1 month to 24 months, with early repayment possible

As [time is often a factor when arranging a property](https://www.financedigest.com/uncertain-times-for-uk-landlords-how-to-avoid-insolvency-for-your-property-management-business-in-2020.html "Uncertain Times for UK Landlords: How to Avoid Insolvency for Your Property Management Business in 2020") development exit loan, independent broker support comes highly recommended. Your broker will help prepare and present your application in a way that minimises delays and disruptions, potentially enabling you to [access the money](https://www.financedigest.com/accessing-government-money-if-youre-self-employed.html "Accessing Government Money if You’re Self-employed") you need in a matter of days.

They will also help you build a thorough understanding of the other options that may be available, [including a commercial bridging loan](https://ukpropertyfinance.co.uk/bridging-loans/types/commercial-bridging-loans/) or longer-term repayment facility.

**![](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/craig-upton-new-photo-1736815834800-compressed.jpg)**

**About the Author**

Craig Upton supports UK [businesses by increasing sales](https://www.financedigest.com/the-ultimate-excel-sales-tracking-templates-for-businesses.html "The Ultimate Excel Sales Tracking Templates For Businesses") growth using various marketing solutions online. Creating [strategic partnerships](https://www.financedigest.com/token-inc-announces-strategic-partnership-with-virtusapolaris.html "Token, Inc. Announces Strategic Partnership with VirtusaPolaris") and keen focus to detail, Craig equips websites with the right tools to rank in organic search. Craig is also the CEO of [iCONQUER, a UK based SEO company](https://www.iconquer.com/) and has been working in the digital marketing arena for many years. A trusted SEO consultant and trainer, Craig has worked with British brands such as UK [Property Finance](https://www.financedigest.com/what-has-brexit-done-to-financing-your-dream-property-in-portugal.html "What has Brexit done to financing your dream property in Portugal?"), Serimax, djkit and also supported UK doctors, solicitors and property developers, gain more exposure online. Craig has gained a wealth of [knowledge using Google and is committed to creating new opportunities and partnerships](https://www.financedigest.com/dispelling-the-myths-of-university-business-knowledge-transfer-partnerships.html "Dispelling the myths of university-business Knowledge Transfer Partnerships").

**This is a Sponsored Feature.**


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