£900,000 – Loan to repay development finance in Birmingham

The Story

Transforming Visions into Reality: Fox Davidson’s Triumph in Securing £900,000 Development Exit Finance for Birmingham Property Developer

At Fox Davidson, we take pride in being at the forefront of the UK mortgage brokering industry, committed to providing innovative financial solutions for property developers. In a recent success story, we had the privilege of assisting a dynamic property developer in Birmingham. By securing a £900,000 development exit finance loan, we enabled the developer to repay costly development finance, release equity on a completed project comprising new build flats, and gain valuable time for a strategic property sale. In this case study, we delve into the details of this transaction, highlighting how our expertise in development exit finance played a pivotal role.

Our client, a visionary property developer based in Birmingham, embarked on the construction of a small block of new build flats. Despite the success of the project, the existing development finance in place posed financial challenges due to delays in the sale of the completed units. Recognising the need for a more efficient and cost-effective solution, the developer sought Fox Davidson’s expertise.

The Challenge

The primary challenge for our Birmingham-based client lay in the high costs associated with the existing development finance. The developer also aimed to release equity from the completed project for future ventures. Additionally, an extension to the time the client had to sell the properties would tie in with a strengthening economy.

The Solution

Understanding the unique challenges and objectives of our client, Fox Davidson embarked on a comprehensive financial analysis. Leveraging our vast network of lenders and deep understanding of development exit finance, we proposed a bespoke solution to refinance the existing development finance and facilitate the release of equity to 75% of the completed development value.

Loan Structuring:

Fox Davidson successfully secured a development exit finance loan amounting to £900,000, representing 75% of the completed development’s valuation. This strategic loan structuring ensured that the developer had access to a substantial portion of the property’s value, enabling the efficient repayment of the existing, more expensive development finance.

Client benefits:

Cost Savings:

Securing the development exit finance at favourable terms translated into significant cost savings for our client. The reduced financing costs directly contributed to an improved bottom line for the completed project.

Equity Release:

The loan structure facilitated the release of equity, providing the developer with substantial liquid capital. This released equity could be strategically reinvested in new projects, fostering continued growth and diversification of our client’s property development business.

Market Adaptability:

With the new loan set for a 12-month period, our client gained the flexibility needed to adapt to market conditions. This timeframe allowed for a strategic approach to selling the completed flats, maximizing returns in the dynamic Birmingham property market.

Summary:

Fox Davidson’s success in securing £900,000 in development exit finance for our Birmingham-based property developer exemplifies our commitment to providing tailored financial solutions that allow developers to secure competitive funding and to manage cashflow.  

If you are a property developer in Birmingham seeking a strategic loan to pay off development finance and unlock new opportunities, Fox Davidson stands ready to be your trusted partner in achieving financial success.

Frequently Asked Questions (FAQs) – Development exit finance:

What is development exit finance?

Development exit finance is a financial solution that allows property developers to refinance existing development finance, providing cost savings and releasing equity on a completed project.

How does development exit finance benefit Birmingham property developers?

Development exit finance offers cost savings, equity release, and extended repayment periods, allowing Birmingham developers to optimize their financial strategy in a dynamic property market.

Can Fox Davidson assist in securing development exit finance for Birmingham projects?

Absolutely. Fox Davidson specialises in securing tailored financial solutions, including development exit finance, for property developers in Birmingham. Our experts work closely with clients to provide personalised and strategic financing options.

What is the typical loan-to-valuation ratio for development exit finance in Birmingham?

The loan-to-valuation ratio for development exit finance can vary between lenders but the typical maximum loan to value is 75%.

How quickly can a development exit finance loan be processed in Birmingham?

Development exit finance can be drawn down in as little as a few days. Timescales will rely on efficient processing by all parties including lender, surveyor, and solicitor. Fox Davidson manage the process to ensure the process is as efficient as possible. 

To discuss development exit finance please do get in touch and one of our advisors will discuss your funding options with you.