Sales period funding after practical completion

Criteria for a development exit bridge

A sales period lender is most comfortable once a scheme has reached practical completion, because the construction risk that drove the senior development loan has gone. They want sight of the completion certificate, building control sign-off and the building warranty, often an NHBC or equivalent cover note, alongside a valuation of the finished homes that supports the gross development value. They assess the sales strategy: realistic asking prices, the local absorption rate, the estate or sales agent appointed, and any reservations or exchanges already achieved. They are underwriting a completed, saleable asset and a credible exit rather than years of trading, so a first-time property developer is fundable where the scheme is genuinely finished and the sales plan is sound. They are stricter on the exit than on the borrower, because a development exit bridge with no realistic repayment route simply moves the redemption problem along. We package the completion evidence, the warranties and the sales programme, and we confirm the exit before the facility draws, so the bridge does its job and is repaid on time rather than rolled repeatedly.

How much the exit facility releases against GDV

Sales period finance is sized against the gross development value of the completed scheme, indicatively up to 70 to 75 percent of GDV, which is often higher than the development loan being repaid because the asset is now valued as finished homes rather than on build cost. That headroom can release equity above the senior debt repayment, which a property developer can recycle into the deposit and early costs of the next site rather than waiting for the last unit to complete. The loan to value (LTV) is measured against the day-one valuation of the finished scheme, and as units sell and net sales proceeds repay the facility, the loan amortises against a shrinking pool of unsold units. Interest is usually retained or rolled up rather than serviced monthly, so the net day-one advance is the gross loan less retained interest and the arrangement fee, and the developer is not funding debt service out of slow early sales. We model the loan against GDV, the equity it releases and the all-in cost across the expected sales runway before approaching lenders. All bands are illustrative, vary by lender and scheme, are subject to principal sign-off, and are not an offer.

What a finished-scheme bridge costs over the sales runway

The point of a sales period loan is the saving and the breathing room: refinancing off a development loan priced for construction risk onto a bridge priced for a completed scheme usually cuts the monthly interest rate materially, while removing the redemption pressure that forces a discounted block sale. Expect a lender arrangement fee, indicatively around 1 to 2 percent of the loan, a valuation of the finished homes, legal costs for both sides, and sometimes an exit fee. The largest cost lever is time, because interest accrues for as long as the facility runs, so a realistic sales absorption rate and a clean exit matter more than chasing the lowest headline rate. Set against the cost is the value protected: holding units to full price rather than discounting them to hit a development loan redemption date typically recovers far more than the bridge costs. We disclose our broker fee in writing, quote the all-in cost over the expected sales period, and never claim an exclusive panel or an exclusive tie to any lender. The figures are indicative and not an offer of finance.

Exit funding against the development loan and a discounted sale

Sales period finance sits between the senior development loan it repays and the choice every developer faces at a maturing redemption date. Leaving the scheme on the development loan is the wrong answer once the build is finished, because that debt is priced for construction risk that no longer exists and its redemption date will arrive before the units sell. A discounted block sale repays the lender quickly but at a real cost, because selling completed units below value to meet a deadline can wipe out the development profit the scheme was built to earn. Sales period finance is the middle path: a bridge that repays the development loan, funds the sales and marketing runway, and lets the units sell at full value over up to 24 months. Where a developer decides to hold and let rather than sell, the same bridge can be exited by a refinance onto investment or buy-to-let term debt instead of net sales proceeds. We model all of these so the decision is made on the numbers rather than on the redemption date.