Finishing a stalled or part-complete development

What a part-complete exit bridge does

A development can reach the final stretch of the build and still run into trouble with its funding. The original development loan is short, and it carries a hard maturity and a fixed facility limit. If the programme slips, the original term can expire before practical completion, or the cost to finish can exceed the headroom left in the facility. Either way the site stalls: the build is part-complete, the lender's loan is due, and there is no money left to finish. A part-complete exit bridge is the funding that takes over at that point.

Part complete development finance repays the existing development facility, takes a first charge over the part-built scheme, and releases the cash needed to complete the build. It runs through to practical completion and then across the sales period while the units sell or the asset refinances. We arrange it as an unregulated commercial facility and place it with the funder whose appetite fits the scheme. DevExit is a finance arranger and introducer, not a lender, and does not hold FCA authorisation because the lending it arranges falls outside the regulated mortgage perimeter.

When a development facility runs out of term or headroom

Two distinct problems push a developer toward this funding, and they often arrive together. The first is time: the original term has run out or is days from expiry while the build is still part-complete. The second is money: the scheme is out of headroom on the development facility, with build cost to complete higher than the undrawn balance because of cost inflation, a main contractor failure, or variations during the build.

• Run out of term: the development loan has reached or passed its maturity date before practical completion
• Out of headroom: the remaining build cost to complete exceeds the undrawn balance left in the facility
• Lender exit: the original development finance lender wants its capital back and will not extend
• Contractor or programme failure: a main contractor leaves site, stalling the build and the drawdown schedule
• CBILS or older facility maturing: a legacy facility, including loans written under CBILS, has reached the end of its term

How a finish and exit bridge is sized

A finish and exit bridge is sized on two numbers at once: the build cost to complete, and the gross development value the finished scheme will reach. The day-one loan amount has to repay the existing development facility and fund the remaining works, while the total facility, including those further drawdowns, has to stay within the lender's limit on loan to gross development value (LTGDV). A monitoring surveyor reappraises the site, confirms the cost to complete and signs off each drawdown as the build progresses, exactly as on a ground-up development loan.

Interest is usually retained from the advance or rolled up and settled at exit, because a part-built site produces no income while it is finished. Pricing sits above a development exit bridge taken at practical completion, because build risk remains until the scheme is finished, but it is set against the certainty of the GDV and the strength of the exit. All of these figures are illustrative, vary by lender, asset and scheme, and are not an offer of finance.

Finishing finance versus a development exit bridge

It is worth separating two products that sound alike. Part-complete finishing finance funds a scheme that is not yet finished, so it carries residual build risk and funds the works through to practical completion. Development exit finance, sometimes called a development exit bridge or simply exit funding, takes over at or near practical completion when the build risk has gone, and is cheaper precisely because the scheme is complete. Some specialist funders position exit finance at PC; others position part-complete funding before it.

The two often run in sequence on the same scheme. We can arrange part-complete finance to finish the build, then refinance onto a cheaper development exit facility at practical completion to fund the remaining sales period at a keener rate. The right structure depends on how far through the build the scheme is and how strong the exit looks.

What sales-period funding costs and who provides it

Specialist development finance lenders provide this funding rather than mainstream banks, because taking over a stalled, part-built scheme needs a funder that will reappraise mid-build risk. The market is well served: specialist development and bridging lenders run dedicated part-complete products, and whole-of-market finance arrangers place these cases across the market. We sit alongside these as an arranger, comparing the panel to place each scheme with the funder whose appetite fits.

• Arrangement fee: commonly around 1.5 to 2 percent of the facility, deducted on drawdown
• Interest: a monthly rate, retained or rolled, reflecting the residual build risk
• Monitoring surveyor: a RICS-qualified surveyor reappraises the site and signs off drawdowns
• Valuation and legal costs: a fresh GDV and cost-to-complete appraisal, plus the lender's legals
• Exit fee: charged by some lenders on redemption, set against the GDV

A clean Companies House record on the borrowing entity, a credible main contractor to finish the works, and a documented exit strategy all sharpen the terms a lender will offer. The strongest cases are part-built schemes with most of the structure up, a realistic cost to complete, and clear evidence of sales demand for the finished units.

How we arrange funding to finish and exit

We start from the cost to complete and the exit, not just the loan that has fallen due. We establish what is left to build, what it will cost, what the finished scheme is worth, and how it repays, then we structure a first-charge facility that repays the existing development loan, funds the works to practical completion and carries the scheme across the sales period. We line up the exit in advance, whether that is unit sales or a refinance onto investment term or buy-to-let debt, so the plan runs through to redemption rather than stopping at completion. We are an arranger and introducer, not a lender, and the lending we place is unregulated commercial debt. Where a transaction would require FCA authorisation, we refer it to a regulated firm.