Bridging a part-built scheme right through to sold units

What lenders check on an incomplete development

Lenders funding a part-complete development underwrite two things at once: the residual build risk in the works that remain, and the value and saleability of the finished scheme. They want to see how far the build has progressed, a monitoring surveyor or quantity surveyor report on the remaining build costs and the time to complete, the development valuation on a gross development value basis, any Section 106 or CIL obligations that still have to be discharged before units can be occupied, and the NHBC or equivalent build warranty cover that buyers and their conveyancers will expect on completion. They look for a credible exit strategy: a realistic sales period with a defensible sell-through rate for the units, or a refinance route onto term debt once practical completion is certified. Because completion still sits ahead, they size the loan to GDV more cautiously than they would on a finished scheme, and they release the cost to complete in drawdowns against surveyor sign-off rather than in a single advance. They underwrite the asset and the exit harder than the borrower, so a developer with a stalled facility but a sound scheme is fundable. We package the surveyor report, the completion evidence to date, the sales plan and the refinance route, and place the case with a lender whose appetite fits a partially built scheme rather than only a completed one.

How much exit funding you can raise against GDV

Exit funding on a part-complete development is sized on the gross development value (GDV) of the finished scheme, indicatively up to 70 to 75 percent on a loan to GDV basis, with the gross facility split between repaying the development facility, funding the remaining build costs, and the retained interest and fees. While works are still outstanding the lender will usually hold the day-one loan to value lower against the scheme as it stands today, then allow the cost-to-complete tranche to draw down against monitoring surveyor sign-off as the build progresses. That means the net day-one advance is the gross loan less the cost-to-complete retention, the retained or rolled-up interest, and the arrangement fee. Where some units in an earlier phase have already sold, the facility is sized against the value of the unsold units and the works that remain. The interest rate sits above a completed-scheme development exit, because residual build risk is still present, but below the original development finance once the scheme is substantially built. We model the loan against GDV, the cost to complete, and the all-in cost across a 12 to 18 month term before approaching lenders. All bands are illustrative, vary by lender and scheme, are subject to principal sign-off, and are not an offer of finance.

What sales-period funding costs to complete and sell

Funding that both completes a scheme and carries it through the sales period costs more than a straight residual stock loan, because the lender is taking some build risk and overseeing drawdowns rather than lending against finished units alone. Expect a lender arrangement fee, indicatively around 1 to 2 percent of the loan, a development valuation reflecting the GDV, a monitoring surveyor fee for inspecting the remaining works, legal costs for both sides, and sometimes an exit fee. Interest is charged per month and is usually retained or rolled up, so the largest cost lever is time: the faster the build finishes and the units sell, the less the bridge costs in total. Refinancing the development facility before term expiry also removes the risk of default interest, which a development lender can charge once a facility runs past its term date, and that saving alone can outweigh the cost of the bridge. We disclose our broker fee in writing, quote the all-in cost across the expected term rather than the monthly rate alone, and never claim an exclusive panel or an exclusive tie to any lender. The figures are indicative and not an offer of finance.

A development exit bridge against a residual stock loan

A development exit bridge on a part-complete scheme and a residual stock loan look similar but fund different stages. A residual stock loan, sometimes marketed as unsold inventory funding, is written against a completed development: practical completion has been certified, the units are finished, and the loan simply funds the holding period while the unsold stock sells. It does not fund any cost to complete, because there is none. Many lenders that market developer exit finance, including names such as Maslow Capital, position the product for schemes at or near practical completion for the same reason, which leaves a gap for the developer whose scheme is genuinely part-built. Part-complete development exit finance fills that gap: it refinances the development facility before term expiry, funds the remaining build costs to reach practical completion, and then converts in effect into sales-period funding to sell the finished units. Where the scheme will be held and let rather than sold, the route is this finish-and-exit bridge, then a refinance onto a long-term investment or buy-to-let term loan once the income is settled. We assess the stage and the exit realistically, and only arrange the facility where it genuinely beats holding a maturing development facility on default-priced terms.