Development exit finance for completed holiday and residential parks

Criteria for a finished-scheme bridge on a licensed park

Park lenders are most comfortable once a holiday or residential park has reached practical completion, because the construction risk that drove the development finance has been removed. They want sight of the practical completion evidence, the site licence and the planning consent for the use, confirmation that a residential park homes site complies with the Mobile Homes Act, a valuation of the completed park and its unsold units, and a credible plan that covers both the lodge sell-down and the stabilisation of pitch income. They will look at the sales rate and absorption on the pitches sold so far, the pitch fees and ground rent the occupied pitches produce, and how the operator runs the trading side, because the exit is part sales and part trading refinance. They assess the operator's experience, but they are underwriting a finished, licensed, income-producing park rather than years of trading history, so an operator with a sound scheme and a sound sell-down is fundable. Lenders are stricter on the exit than on the borrower, because a bridge with no realistic sell-down or refinance simply moves the problem along. We package the completion evidence, the licence and planning position, the pitch sales evidence and the stabilisation model so the case is presented at its strongest.

How much exit funding you can raise against unsold lodges and pitches

Holiday park finance in the development exit sense is sized against the gross development value of the completed park, indicatively up to 65 to 75 percent of GDV, often nearer 65 percent against the trading park as a going concern and up to 75 percent against saleable lodge and static caravan stock. That is often higher leverage than the development loan provided, because the park is now finished and valued on completion rather than on cost. The headroom does two things: it repays the senior debt in full, and it can release surplus equity for the operator to put into the next phase or the next site. As each lodge sells and each pitch is taken up, a partial repayment reduces the balance, so the loan to value falls through the sell-down and the cost reduces with it. This is commercial park lending scaled to the scheme, not the consumer hire purchase or lodge finance a buyer uses to fund a single unit at an advertised APR. The facility runs for the sales and stabilisation period, typically twelve to eighteen months, and the interest is usually retained or rolled up so monthly debt service does not consume the operator's cash flow before the units sell. We model the loan against GDV, the pitch income, the sales rate and the all-in cost over the expected term before approaching lenders. All bands are illustrative, vary by lender and scheme, are subject to principal sign-off, and are not an offer.

What the exit facility costs across the sell-down and stabilisation

The point of the exit facility is the saving: refinancing off development finance priced for construction risk onto a finished-scheme bridge priced for a completed park usually cuts the monthly cost materially, while removing the maturity pressure that forces a discount on the remaining lodges. Expect a lender arrangement fee, indicatively around 1 to 2 percent of the loan, a valuation of the completed park and its unsold stock, legal costs for both sides, and often an exit fee charged on redemption. The largest cost lever is time, so a strong sales rate and a quick absorption of the pitches costs a fraction of a facility that drifts for the full term. Because the interest is usually rolled up rather than serviced, the headline rate matters less than the all-in cost across the sell-down and stabilisation, and partial repayments as lodges and pitches sell bring the balance and the interest down as you go. We disclose our arranger fee in writing, quote the all-in cost over the expected term rather than the headline margin, and never claim an exclusive panel or a fixed tie to any lender. The figures are indicative and not an offer of finance.

Park sell-down funding against development debt and a trading refinance

Park sell-down funding sits between the development loan that built the park and the long-term debt that holds it once it trades. Development finance is the wrong tool once the park is complete, because it is priced for construction risk that no longer exists, which is exactly why replacing it with a finished-scheme bridge lowers the cost. A trading or investment term loan is the cheapest money, but it only suits a park that has stabilised into a settled business with proven pitch fees, ground rent and occupancy, so it is not available on day one of the sell-down. The development exit bridge is the structure built for that gap: value-led, sized on the unsold lodges and the stabilising pitch income, and repaid as the units sell and the park settles. The exit is usually a blend, with lodge and static caravan sales repaying part of the balance while the remaining trading park refinances onto a term or investment refinance once the income is proven. Compared with a general bridging loan, this facility is underwritten on a clear, near-term sell-down and a stabilising trading business rather than just the value of the security. We map the route so the park is on the right debt for what it is about to do.