What is development exit finance?

Development exit finance is short-term bridging finance secured against a development scheme that is near or approaching practical completion. It is typically used by developers who need capital to complete final works, are refinancing an existing development facility, or need time to sell or refinance before a long-term facility can be arranged. Unlike traditional development finance, it does not require staged drawdowns — it is drawn in a single advance against the value already created in the scheme.

Can I get development exit finance without a valuation?

Yes, in suitable cases. AF Credit can consider no-valuation underwriting for development exit finance where the security position is sufficiently conservative, supporting evidence is available — such as planning documentation, build progress photographs, cost-to-complete analysis and comparable sales evidence — and the LTV is low enough to justify the approach. In this Manchester case, a £325,000 facility was provided at 35% LTV against a £3.9m GDV with no formal valuation required.

Can I get development exit finance without a build warranty?

Mainstream lenders typically require a build warranty such as an NHBC Buildmark or equivalent to be in place before drawdown. AF Credit can consider cases where a build warranty is not yet in place, provided a retrospective warranty can be implemented following practical completion. In this Manchester case, the developer did not have a warranty at the point of application. Rather than treating this as an automatic decline, AF Credit identified that a retrospective warranty could be put in place after the works were completed.

What LTV does AF Credit offer on development exit finance?

AF Credit considers development exit finance on a case-by-case basis, with LTV typically assessed against the completed Gross Development Value rather than the current build-stage value. In this Manchester case, the facility was structured at 35% LTV against the £3.9m GDV — a highly conservative position that supported the no-valuation and no-warranty approach taken.

Development Exit Finance — 21-Unit Conversion, Manchester

⚠️ The Challenge

Multiple lenders declined. Too advanced for development finance, no warranty in place, second fix stage — despite a first charge, 35% LTV and a £3.9m GDV with structural works already complete.

💡 Our Solution

No-valuation underwriting supported by planning docs, build progress and comparables. Retrospective warranty solution agreed. Interest fully retained. First legal charge. 18-month term to allow orderly MUFB refinance.

✅ The Outcome

£325,000 net facility drawn. Developer completed second fix and final works. 21-unit scheme reached practical completion and refinanced onto a long-term Multi-Unit Freehold Block facility.

Background

The Situation

An experienced property developer required additional capital to complete the second fix and final internal works on a 21-unit commercial-to-residential conversion in Manchester.

The property had originally been acquired for approximately £700,000 without finance and was owned outright. Planning permission had subsequently been secured to convert the building into 21 residential apartments, with the majority of construction works already completed. Structural works were finished. First fix plumbing and electrical installations were complete. Only second fix and finishing works remained before practical completion.

The completed scheme carried an estimated Gross Development Value of approximately £3.9 million. The developer required £325,000 to complete the final works before refinancing onto a long-term Multi-Unit Freehold Block facility.

Despite the conservative leverage and strong security position, multiple lenders declined the transaction.

Why other lenders declined

The scheme was too advanced for traditional development finance
Funding was required at second fix rather than acquisition or early construction
No build warranty was in place at the point of application
The developer required a flexible completion timetable

Context

Why Late-Stage Development Finance Is Difficult to Obtain

Most development finance lenders are designed to fund projects from acquisition through construction. Their underwriting processes assume funds will be drawn from the beginning of the build programme and released in stages as construction progresses. A developer approaching for funding at second fix falls outside that model.

Ironically, the majority of development risk has already been removed by this stage. Planning has been obtained, structural works are complete and significant value has already been created within the asset. Yet many lenders treat advanced build stage as a reason to decline rather than recognising the substantially reduced construction risk.

This creates a funding gap for developers who have self-funded earlier stages, require additional capital to complete, need to refinance an existing development facility, or require flexibility prior to long-term refinance or sale. This Manchester transaction was a clear example of that gap.

Structuring the Deal

How AF Credit Structured the Facility

Security and leverage assessed

The asset was unencumbered, planning permission had been implemented and the scheme carried an estimated GDV of £3.9 million. A £325,000 net facility represented approximately 35% LTV against the completed value — an exceptionally conservative security position.

No-valuation underwriting agreed

Given the conservative leverage and extensive supporting evidence available, AF Credit was comfortable proceeding without a formal valuation. Underwriting focused on planning documentation, build progress, cost-to-complete analysis, comparable sales evidence, and exit strategy viability. No surveyor visit was required — removing cost, delay and uncertainty from the process.

Retrospective build warranty solution identified

The absence of a build warranty had caused other lenders to decline automatically. AF Credit recognised that the scheme qualified for a retrospective build warranty which could be implemented following completion of the works — removing an unnecessary barrier while maintaining a sensible risk profile.

Interest fully retained — capital freed for completion

Interest was fully retained within the facility, allowing the developer to direct all available cash resources into completing the project. No monthly interest payments were required during the build period.

18-month term — orderly MUFB exit

An 18-month term was structured to allow the developer adequate time to complete works, achieve practical completion, let the units and arrange long-term Multi-Unit Freehold Block refinancing without time pressure. First legal charge secured against the property throughout.

Deal Structure

The Numbers

Item	Detail
Property Type	Commercial-to-Residential Conversion
Location	Manchester
Units	21 Apartments
Original Purchase Price	~£700,000 (unencumbered)
Gross Development Value (GDV)	£3,900,000
Net Loan	£325,000
LTV (against GDV)	35%
Monthly Interest Rate	0.99%
Term	18 Months
Interest	Fully Retained
Security	First Legal Charge
Valuation	Not Required
Build Warranty	Retrospective Warranty Permitted
Build Stage at Drawdown	Second Fix
Exit Strategy	MUFB Refinance

Analysis

Why This Case Worked

Security position was extremely conservative. At 35% LTV against a £3.9m GDV on an unencumbered asset with planning already implemented, the lender had substantial equity protection. The primary reasons other lenders declined were operational rather than credit-related.
Risk was substantially reduced. Planning had been obtained, structural works were complete and significant value had already been created within the asset. The remaining works — second fix and finishing — carried materially less risk than early-stage development.
No-valuation underwriting was appropriate. Conservative LTV, unencumbered property and strong supporting documentation — planning, build progress, comparables and cost-to-complete — all supported an underwriting approach that removed the need for a physical valuation.
Retrospective warranty was a practical solution. Rather than treating the absence of a warranty as an automatic decline, AF Credit identified that a retrospective warranty could be implemented post-completion — resolving the issue without adding unnecessary cost or timeline risk during the build.
Retained interest freed capital for completion. By retaining all interest within the facility, the developer's available cash was directed entirely to completing the works rather than servicing monthly interest costs.
Exit was clear and credible. A 21-unit residential block in Manchester with a demonstrable rental profile provides a straightforward route to MUFB refinancing. The exit strategy was well-evidenced and commercially sound.

Products Used in This Case

How This Deal Was Financed

This transaction was structured using AF Credit's development exit and no-valuation bridging capability — specifically designed for developers requiring capital to complete a scheme after the majority of construction is already finished.

Primary product

No Valuation Bridging Loans

AVM or desktop underwriting — no physical survey, no upfront cost, faster completion.

Commercial Bridging Loans

Offices, retail, mixed-use and commercial-to-residential conversions across England and Wales.

Refurbishment Finance

Light and heavy refurbishment, including late-stage funding and staged drawdown facilities.

Related Case Study

See Another Deal

Development approaching completion?

If traditional development lenders have declined due to build stage, warranty requirements or timing constraints, speak to AF Credit. We regularly structure late-stage funding solutions for developers across England and Wales.

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Disclaimer: Case study details have been anonymised to protect client confidentiality. All lending is subject to underwriting and credit approval is not guaranteed. Any property used as security may be repossessed if you do not repay your loan within the agreed term. AF Credit acts solely as a lender and does not provide financial advice.

Multiple Lenders Declined.AF Credit Completed.