Development Exit Finance Case Study — 21-Unit Conversion, Manchester
A developer needed urgent capital to complete the second fix and final internal works on a 21-unit commercial-to-residential conversion in Manchester — with a GDV of £3.9M, an unencumbered asset, and planning already in place. Multiple lenders had declined due to the build stage and timeline. Aura Capital provided £325,000 with no valuation required and no build warranty needed at drawdown.
The Situation
The client, an experienced developer, had acquired a commercial property in Manchester for approximately £700,000 — unencumbered, with no existing finance against the asset. Planning permission for conversion into 21 residential flats had been secured post-acquisition. Major structural works had been completed, and first fix plumbing and electrics were in place. The scheme was materially advanced, with a clear route to a finished product carrying a gross development value of £3.9M.
Additional capital was required to complete the second fix and final internal works — the last meaningful stage before the units could be presented for the long-term MUFB refinance exit. The ask was not large relative to the asset: £325,000 against a development value nearly twelve times that amount, on a first charge over an unencumbered building.
Yet multiple lenders had declined. The reasons were consistent: the build stage was too advanced for their standard development finance criteria, which typically require drawdown at an earlier point in the construction programme; the timeline the client needed to complete works did not fit within the products they offered; and the absence of a build warranty at the point of application was treated as an automatic barrier rather than a practical problem with a pragmatic solution.
Why Late-Stage Development Finance Is Difficult to Find
Most development finance lenders are structured around a drawdown schedule that begins at acquisition or early construction and tracks the build programme through to completion. A developer approaching at second fix — with major works already complete and the bulk of the build risk already absorbed — does not fit neatly into that model. The lender's process is not built for it, and rather than adapt, most decline.
This is a genuine gap in the market. Late-stage or completion development finance — funding to bridge a developer from near-complete to finished — is a well-defined need that arises regularly, particularly on larger schemes where capital requirements evolve as the project progresses. A developer who purchased and built without debt may simply need a final injection to complete; one who had original development finance may need a top-up or a rebridge to carry the scheme through to exit. In either case, the risk profile at second fix is demonstrably lower than at acquisition — yet most lenders treat the unfamiliar build stage as a reason to decline rather than an opportunity to lend at conservative leverage against an asset that has already created substantial value.
How Aura Capital Structured the Deal
The facility was structured at £325,000 net on an 18-month term, with interest fully retained. The security was a first legal charge over the unencumbered asset — a straightforward, clean security position with no prior charges to consider and a GDV that provided exceptional headroom at 35% LTV.
No valuation required. No build warranty needed at drawdown. Aura Capital assessed the scheme on the available evidence — planning documents, works completed to date, comparable GDV data for the Manchester residential market — and structured the facility accordingly. The build warranty issue was addressed pragmatically: the client was eligible for a retrospective warranty, which was permitted to be implemented post-completion rather than as a precondition of drawdown.
The retrospective warranty approach is a practical solution that many lenders are either unaware of or unwilling to consider. A new-build or conversion scheme that does not yet have a warranty in place is not necessarily a scheme without a warranty solution — it may simply be at a stage in the build programme where the appropriate warranty is a retrospective product rather than one applied at the start of construction. Treating the absence of a warranty at the point of application as an absolute barrier, rather than a condition to be satisfied by completion, adds no meaningful protection to the lender and serves only to prevent a viable transaction from proceeding.
The no valuation approach was appropriate given the conservative LTV and the quality of the available evidence. At 35% against a well-evidenced £3.9M GDV, the security position was robust without requiring a formal RICS development appraisal to confirm it.
The Numbers
| Asset | Commercial-to-residential conversion |
| Location | Manchester |
| Units | 21 residential flats |
| GDV | £3,900,000 |
| Purchase price | ~£700,000 |
| Net loan | £325,000 |
| LTV | 35% |
| Rate | 0.99% per calendar month |
| Term | 18 months |
| Interest | Fully retained |
| Charge | First legal charge |
| Valuation | No valuation required |
| Build warranty | Retrospective warranty — implemented post-completion |
| Build stage at drawdown | Second fix — structural and first fix complete |
| Exit strategy | Refinance onto MUFB term finance upon completion |
| Product | Development Finance / Bridging (Unregulated) |
Why This Case Worked
The security position was exceptional. A £325,000 loan against a £3.9M GDV, on a first charge over an unencumbered asset with planning in place and major works complete, is one of the most conservatively structured development finance positions it is possible to underwrite. The risk for the lender was low by any reasonable measure — and the reason multiple lenders had declined was process inflexibility, not genuine credit concern.
Aura Capital's ability to assess the build warranty issue pragmatically was the difference between a yes and a no. The retrospective warranty solution is well-established in the market; it simply requires a lender willing to engage with it rather than defaulting to a blanket requirement for a warranty at the point of drawdown. By permitting the warranty to be put in place post-completion — as a condition of the 18-month term rather than a precondition of drawdown — the transaction proceeded without delay and without any meaningful compromise to the lender's security position.
The no valuation approach reflected the same logic. At 35% LTV against a well-documented GDV, a formal development appraisal would have been an expensive and time-consuming exercise that added no information the lender did not already have. The decision was made on the available evidence, and the available evidence was more than sufficient.
Products Used in This Case
This transaction was delivered using Aura Capital's development finance capability — structured as a late-stage completion facility for a commercial-to-residential conversion scheme. If you are at second fix or beyond on a development and need capital to complete, or if you have been declined by other lenders due to build stage, the absence of a warranty, or timeline constraints, speak to Aura Capital directly.
Related products that may also be relevant include our no valuation bridging loans for cases where a desktop assessment is appropriate, and our broader bridging finance range for residential and commercial property across England and Wales.
Need Finance to Complete a Development?
If you are nearing completion and need capital to finish and exit your scheme — whether the issue is build stage, a missing warranty, a tight timeline, or a combination of all three — Aura Capital can assess your position and structure a solution around it.
Get a QuoteThis case study has been anonymised to protect client confidentiality. Terms and outcomes vary depending on individual circumstances. This does not constitute financial or legal advice. Seek independent advice before proceeding.
