Loan to repay development finance.

Recently, we had the privilege of assisting a developer in securing a loan to pay off development finance. This financial solution not only allowed the developer to repay the costly development finance but also provided the flexibility to release equity on the completed property development. In this article, we’ll explore the features and benefits of a loan designed specifically for paying off development finance, commonly known as development exit finance.

development finance

Key Features of a Loan to pay off development finance:

A loan to pay off development finance also know as development exit finance is a bridging loan that allows property developers to refinance existing development finance. This type of loan serves as a bridge between the completion of a property development project and the eventual sale of the developed properties.

Typically set for a duration of 12 months, this financing option provides developers with more time to sale and releases money back to the developer for the next project. You have to be efficient in this market to make money and development exit funding is a good product.


Refinancing Development Finance:

One of the primary features of this loan is its purpose – to replace the existing, often more expensive, development finance. This refinancing allows developers to transition from high-cost development finance to a more sustainable financial arrangement.

Equity Release:

Beyond repaying development finance, this type of loan enables developers to release equity tied up in the completed property development. This newfound liquidity can be utilised for further investment opportunities, diversification, or any other strategic financial objectives.

Flexible Repayment Terms:

Development exit finance typically comes with flexible repayment terms. Developers can structure the repayment schedule to align with the expected sales timeline of their completed properties, ensuring financial obligations are met without undue pressure.

It is also possible to stagger the release of funds so as not to attract interest on the whole amount on day one. The staged drawdowns are particularly useful for developers who wish to fund the build of a new scheme using the development exit finance. 

12-Month Horizon:

Recognising the unpredictable nature of property sales, these loans are often set for a 12-month period. This timeframe allows developers the necessary breathing room to secure optimal sale prices and navigate market fluctuations without the immediate pressure of repayment.


Competitive Interest Rates:

Fox Davidson collaborates with a network of lenders to secure competitive interest rates for our clients. Lower interest rates contribute to reduced overall borrowing costs, enhancing the profitability of the property development.

Benefits of a Loan to Pay Off Development Finance:

Cost Savings:

By refinancing development finance with a more competitively priced loan, developers can significantly reduce their financing costs. This translates to increased profit margins on the completed property development.

Extended Repayment Period:

The 12-month horizon provided by development exit finance offers developers an extended timeframe to sell their properties. This alleviates the pressure of immediate repayment, allowing for a more strategic approach to the sales process.

Leveraging Equity:

Equity release on the completed development provides developers with additional financial resources. This capital can be reinvested in new projects, used for business expansion, or serve as a financial buffer for unforeseen circumstances.

Market Adaptability:

The flexibility inherent in these loans allows developers to adapt to market conditions. Whether facing unexpected delays or capitalising on favourable market trends, developers can navigate the ever-changing property landscape with greater ease.


A loan to pay off development finance, or development exit finance, is a great way to keep your developments coming out of the ground and to keep your contractors happy. When sales are slow this product comes into its own.

At Fox Davidson, our commitment is to provide tailored solutions that align with the unique needs of our developers. By securing such loans, we aim to save you money and get you building more units.

If you want to discuss any type of construction loan including development finance, bridging or loans to repay development finance and release some cash for your next project, please do get in touch.