Development Exit Bridging Loans
Smoother Sales, Lower Costs, and Faster Cash Release
Why developers use exit finance
Reaching practical completion is a milestone — but it’s often when pressure peaks. Sales cycles can stretch, existing development funding is expiring, and you still need headspace to present, market, and sell units for full value. Development exit bridging gives you that breathing room. It repays your development lender, reduces your monthly finance cost, and releases equity so you can move on to the next scheme — all while you sell at market value instead of discounting for speed.
At Aura Capital, we arrange fast, flexible exit bridges across residential, mixed-use and small commercial schemes, with strong access to specialist, broker-only lenders and pragmatic legal/valuation panels that keep timelines tight and predictable.
What is a development exit bridge?
A development exit bridge (also called a “sales period bridge”) is a short-term facility used at or near completion to replace your development loan. It’s typically cheaper than development finance on a monthly rate, can roll up interest to relieve cash flow, and can include equity release to fund your next acquisition or pre-construction costs.
Typical use cases:
Repay an expiring development loan and avoid default/extension fees
Fund a 6–18 month sales window to achieve best-price disposals
Release profit/equity tied up in the scheme to secure a new site
Refinance into a calmer, lower-touch facility while you complete snagging, warranties and sales admin
Reduce aggregate finance cost where development rates are comparatively higher
Key features & typical terms
While every lender underwrites differently, you’ll commonly see:
Loan size: ~£100k to £25m+ (lender dependent)
LTV / LTGDV: commonly up to c. 70–80% of value/GDV (higher possible with additional security)
Term: 3–24 months (with extension options available)
Pricing: monthly rate generally lower than development finance; arrangement fee typically ~2%
Interest: serviced or rolled-up (retained) to protect cash flow
Security: first charge on the asset; additional security can boost leverage or pricing
Speed: DIP in 24 hours, completions commonly in 1–3 weeks (case dependent)
Want exact numbers for your scheme? Get an indicative term sheet today — decisions in 24 hours.
When exit bridging adds the most value
1) Your development loan is expiring
A bridge pays out the development lender cleanly, keeping you in control of sales pace and pricing.
2) You’re launching sales into a slower market
An exit bridge effectively buys time so you can secure full-value bids, build buyer pipelines, and avoid distressed discounts.
3) You need equity for the next deal
Release part of your profit now to lock in a new site, designs, planning work or enabling works, without fire-selling stock.
4) You’re transitioning strategy
If you decide to hold and refinance into BTL or a term facility, an exit bridge gives you space to finalise valuations, leases, and lender diligence.
Exit bridge vs development finance vs term mortgage
Development finance is designed for build risk and drawdowns; once you’re at (or near) completion, those premiums become unnecessary.
Development exit bridging steps in for the sales/lease-up phase: cheaper monthly rates, lighter monitoring, and flexibility to release cash.
Term mortgages (BTL/commercial) can be the permanent end-state, but they’re slower, stricter on DSCR/tenancy, and less forgiving if sales or lets are still settling. The exit bridge bridges the gap.
Eligibility and what lenders look for
Stage of works: completed or Practical Completion; some lenders will accept “nearly complete” subject to clear finish plans
Warranties & compliance: e.g., building control sign-off, latent defects/new-home warranties where applicable, EWS1 where relevant for flats, EPCs in place for sales/lets
Valuation: current value and/or GDV supported by a RICS valuation; for phased disposals, lenders assess achievable pricing and absorption
Exit strategy: credible sales pipeline (or refinance plan) with realistic timelines
Sponsor profile: delivery track record, cost control, and general professionalism (first-timers can be possible with strong professional team)
The application process (what to expect)
Indicative terms (DIP)
Send us basics: address, scheme summary, GDV/current value, outstanding debt, required term/amount, exit plan. We return a DIP within 24 hours.
Underwriting & valuation
We coordinate valuation and legal workstreams early, aligning the lender’s requirements with your timelines. If equity release is needed, we structure from day one.Loan drawdown
On completion, the new facility repays your development lender, perfects the first charge, and optionally releases extra cash to you.Sales & monitoring
You proceed with presenting, marketing and selling units (or finalising lets). Interest can be rolled up so cash-flow stays clean.Repayment
Repay from unit sales (in tranches or at the end) or via a term refinance once income or occupancy is stabilised.
Structuring tips to maximise net profit
Price staging & release schedule: plan releases (and incentives) to protect comparables and keep momentum without undercutting value.
Presentation: allocate sensible budget for snagging, landscaping, signage, show units and pro photography — small spend, big GDV impact.
Valuation readiness: keep a clean data room (drawings, warranties, completion certs, leases, ASTs if relevant, service charge budgets, building control sign-offs, O&M manuals).
Absorption planning: be realistic on sales rate/month; set the loan term and contingency accordingly to avoid forced outcomes.
Consider additional security: where leverage is tight, second security (or cross-collateral) can reduce rate and increase net proceeds.
Documents checklist (speeds up credit & legals)
Scheme summary (unit mix, NIA/GIA, spec, warranties, completion status)
Evidence of PC or near-completion; snagging list and programme to close out
Sales pack (pricing schedule, agent appointments, marketing plan, reservations)
Professional team details; building control, warranty providers, certificates
Asset/borrower SPV info, ID/AML/KYC, company docs
Existing facility statement and redemption figure
Latest valuation (if available) — or we’ll coordinate a fresh instruction
Costs & fees — what to budget
Monthly rate: commonly lower than the development facility you’re replacing
Arrangement fee: typically around 2% (lender and loan size dependent)
Valuation & legal fees: payable up-front or on account
Exit fee: often avoidable; where present, we’ll negotiate hard
Broker fee: fully disclosed; we prioritise net outcomes (total cost of funds vs speed vs leverage)
Our role is to optimise the whole picture: rate, fees, leverage, speed, and legals — not just headline pricing.
Real-world examples (illustrative)
1) 12-unit conversion, Greater Manchester
GDV: £2.50m | Dev loan: £1.80m | Exit bridge: £1.90m (rolled-up interest)
Result: repaid dev lender, reduced monthly cost, 9-month sales window. Final achieved values averaged 3–4% above original appraisal, adding six-figure surplus.
2) 4 new-build houses, Bristol
GDV: £1.20m | Dev loan: £0.85m | Exit bridge: £0.90m (c.75% GDV)
Result: equity release c. £100k to secure next site and cover prelims. All units sold individually at target pricing within 10 months.
3) 20-unit phased new-build, Birmingham
GDV: £5.50m | Dev loan: £4.20m | Exit bridge: £4.00m
Result: repaid initial lender, staged disposals over 15 months in a choppy market. No distressed discounts; developer’s IRR protected.
4) Overseas sponsor, London apartments
GDV c. £10m | Exit bridge: £7.0m
Result: released £1.0m to kick-off next project abroad while UK units sold through a premium agent campaign.
Common pitfalls (and how to avoid them)
Assuming term is a backstop: set a realistic term and extension option; don’t rely on last-minute renewals.
Under-allowing for warranties/compliance: ensure EWS1 (where needed), EPCs, NHBC or equivalent, and building control close-outs are in hand.
Single-agent dependency: dual-list (where appropriate) or at least maintain comparables and pipeline visibility.
Over-optimistic absorption: bake in seasonality and mortgage market conditions; big schemes need phasing discipline.
Cash-flow squeeze: if you plan to service interest, pressure test cash flows; rolled-up interest can de-risk.
FAQs
When should I move from development finance to an exit bridge?
As soon as you’re at PC or close to it and know you’ll benefit from cheaper monthly cost, equity release, or simply more time to sell for full value.
Can I get equity release on an exit bridge?
Yes, subject to valuation and leverage. We structure this up-front so you know precisely how much cash you can draw on day one.
What’s a typical maximum LTV/LTGDV?
Often up to c. 70–80% (varies by lender, asset, and security). Higher leverage may be possible with additional security.
Do I need all units fully finished?
Not always. Some lenders are comfortable at “nearly complete” where the finish plan and timing are clear and the valuation supports pricing.
Can I repay early without penalty?
Many lenders allow early repayment after a 3-month minimum. We’ll target lenders with the most flexible ERC terms for your scenario.
What if I decide to hold and refinance instead of selling?
That’s fine — we can pivot to BTL or a term commercial facility once the asset is income-stabilised.
Will adverse credit be considered?
Potentially, if the scheme is strong and the exit is credible. We’ll place the case with lenders that underwrite pragmatically.
Why developers choose Aura Capital
Broker-only access to specialist exit bridge lenders (and genuinely sharp pricing)
Speed & certainty: DIPs in 24 hours, tight valuation/legal management, proactive issue-clearing
Deal structuring: we optimise leverage, equity release, early-repay terms and cost of funds to lift net outcomes
Developer-first comms: single point of contact who understands build programmes, PC logistics and sales absorption
Transparency: clear fees, clear timelines, and no fluff
Talk to us today. If your development loan expires in the next 2–8 weeks — or you want to release equity for the next site — we’ll structure a clean exit with room to sell well.
How to get started (what to send)
Address and short scheme summary
GDV and current value (if you have a recent valuation, even better)
Current lender, outstanding balance and loan expiry date
Required term, target equity release, preferred repayment profile (sales vs refinance)
Sales plan: agent(s), pricing schedule, reservations and pipeline (if any)
Next step: we’ll turn around an indicative term sheet within 24 hours, then move straight to valuation and legals to hit your timeline.
