What Development Exit Finance Is
You use development exit finance to refinance your development loan once the scheme reaches practical completion. It’s a short-term bridge that clears the build facility and gives you room to sell the finished units.
Your costs fall the moment the build is done, and that’s the whole point: the risky construction phase is behind you, so a lender funds the finished asset far more cheaply, easing your cash flow.
You won’t keep paying build-phase rates on a completed scheme. The Monday practical completion signs off, your finance director moves the debt onto a cheaper bridge before the development loan’s term runs out.
How Development Exit Finance Works
You take a new short-term facility that redeems the development loan and runs for roughly 12 to 18 months, long enough to sell the units in an orderly way. Repayment comes from sales proceeds as each unit completes.
Your equity often comes free at the same time: because the finished scheme is worth more than the outstanding build debt, exit finance can hand you back capital to put into your next site.
You can’t unlock that equity while the development loan still runs. At month-end your accountant draws down exit finance, redeems the build loan, and releases enough cash flow to fund the deposit on the next scheme.
What It Costs and How Much You Can Borrow
You’ll pay bridging-level rates, roughly 0.55 to 0.85% a month, well below development finance, because the construction risk is gone. Lenders will usually advance up to 70 to 75% of the finished (gross development) value.
At around 1 to 2% for the arrangement fee, plus valuation and legal costs, the fees look like any bridge, with interest often rolled up so nothing leaves your cash flow while units sell.
You won’t escape fees, but the monthly rate drops sharply. At the year-end review your accountant sets the cheaper exit rate beside the old build rate to see what it returns to your cash flow.
When to Use Development Exit Finance
You reach for it when the build is finished but sales haven’t caught up with the development loan’s term. Rather than discount units to clear the debt in a hurry, you refinance onto a cheaper, longer facility.
Your pressure point is usually the default rate: exit finance clears the development loan before it tips into default pricing, so a slow sales month stops draining your cash flow.
You can’t sell well with a lender’s clock running down. The exit facility buys the time good sales need, so on a Friday your sales agent can hold out for asking price on the last two units, with months left rather than days.
Exit Finance vs a Development Loan Extension
You could instead ask your development lender to extend the existing facility, but that usually keeps you on the higher build-phase rate. Exit finance re-prices the whole debt onto cheaper, completed-asset terms.
Your extension also leaves equity trapped: it rarely hands capital back, while exit finance can free the surplus between the finished value and the outstanding debt.
You won’t free your next deposit through an extension alone. The right call depends on the gap you’re bridging, so on a Tuesday your broker models an extension against a fresh exit facility to see which leaves more in your cash flow.
Development Exit Finance FAQs
What is development exit finance?
Development exit finance is a short-term bridging loan that repays a development finance facility once the scheme reaches (or nears) practical completion. Because the construction risk is gone, it’s priced well below the development loan and gives the developer 12 to 18 months to sell the finished units in an orderly way, rather than discounting them to clear the maturing build debt. It can also release equity trapped in the completed scheme.
How much does development exit finance cost?
Development exit finance is priced at bridging levels, typically around 0.55 to 0.85% per month, materially cheaper than development finance because the build is complete. Expect an arrangement fee of roughly 1 to 2%, plus valuation and legal costs, with interest often rolled up so nothing is paid monthly while units sell. The key comparison is the saving against continuing to pay the higher development-loan rate.
How much can I borrow with development exit finance?
Lenders will usually advance up to 70 to 75% of the gross development value (the finished value of the completed scheme). Where that figure exceeds the outstanding development debt, the difference can be released to you as equity, often used to fund the next site. The exact loan-to-value depends on the scheme type, location, number of units and how quickly they are expected to sell.
Should I use exit finance or extend my development loan?
Extending the existing development facility is simpler but usually keeps you on the higher build-phase rate and rarely releases equity. Development exit finance re-prices the whole debt onto cheaper completed-asset terms and can free the surplus between the finished value and the outstanding loan. Which is better depends on the size of the gap you’re bridging and the all-in cost of each route, so model both before deciding.
How we reviewed development exit finance
What we covered. We explain how development exit finance works in 2026: refinancing a development loan at practical completion, what it costs, how much you can borrow, and how it compares to extending the build facility. We don’t rely on comparison-site summaries or aggregator data.
Data sources. Rate and LTV ranges were checked against primary sources in July 2026, including specialist short-term lender product guides, broker rate sheets and the lenders we assess in our development finance reviews and roundup.
How we handle gaps. Where a figure varies by lender, we give the market range rather than a single false-precision number, and we flag that your terms depend on the scheme, the units and how quickly they sell.
Update cadence. We re-verify this page at least monthly, and whenever market pricing moves. The verification date reflects the most recent full review. Some links on this page are affiliate links, see our editorial policy.
Regulatory note. This page is editorial content, not regulated financial advice. Development exit finance to a company or investor is generally unregulated lending, so compare facilities and read the terms before you sign.