For a property developer, completing construction is often seen as the finish line. In reality, it’s only the start of the final—and often most challenging—phase of the project: selling units, repaying lenders, and securing profit. In 2025, developers are finding that sales are taking longer, valuations remain conservative, and the cost of holding development finance is eating into returns. That’s where development exit finance comes into play.

This form of refinancing allows developers to replace expensive build loans with cheaper, more flexible facilities once the scheme is complete. Done correctly, it reduces pressure from lenders, preserves margins, and unlocks equity for the next site. Done poorly—or left too late—it can lead to distressed sales, heavy penalties, and stalled pipelines.

Why Developers Need Exit Finance Now More Than Ever

The last few years have reshaped the development landscape. Interest rates, while easing from their 2023 highs, are still well above the ultra-low levels that many developers grew accustomed to. Buyers are cautious, stretching out sales cycles across both London and the regions.

A block of new-build apartments in Manchester might take twelve months to fully sell, while a townhouse scheme in Surrey could linger on the market as buyers wait for rates to fall further. In the meantime, developers are stuck paying double-digit interest on their development loans.

Exit finance offers a lifeline by refinancing onto a lower-cost facility, giving developers the breathing space to achieve proper sale prices rather than being forced into discounts. It’s the same principle we highlighted in Why Every Bridging Loan Needs a Clear Exit Strategy: lenders care most about how they’ll be repaid. Developers who plan their exit early are in the strongest position.

How Development Exit Finance Works

An exit loan pays off the original development facility once construction is complete (or very nearly complete). Instead of a lender constantly monitoring contractors, build progress, and drawdowns, the focus shifts to marketing, sales, and repayment.

The terms are usually far cheaper than development debt, sometimes cutting monthly costs in half. Many products run for 12 to 36 months, long enough for even slower-selling schemes to achieve orderly sales. Importantly, these loans can also release equity. That capital is often used to fund the deposit or early works on the next project, allowing a developer to keep their pipeline moving.

In practice, exit finance acts as a bridge between construction and long-term profitability. Without it, developers risk breaching deadlines on their development loans or accepting discounted bulk sales simply to repay lenders.

The Risks of Going Without

Willow frequently encounters developers who underestimate just how quickly timelines can slip once a project is complete. A delayed fire safety certificate, a cautious surveyor down-valuing units, or an economic wobble that dampens buyer confidence can all stretch sales cycles.

We covered the problem of valuation gaps in detail in Navigating Valuation Gaps: When Your Exit Falls Short. The lesson is clear: when developers run out of time on their development loan, lenders lose patience. Penalties increase, and options narrow. In some cases, developers are forced to hand properties back to lenders at far below market value.

Exit finance prevents this by resetting the clock and shifting onto terms designed for the sales phase rather than the build phase.

Real-World Example

A Willow client in Surrey completed a 14-unit scheme of luxury apartments with a £7 million development loan. Sales were progressing, but only half the units had exchanged contracts when the loan term ran out. The bank demanded full repayment within three months—impossible without accepting heavy discounts on the unsold units.

We arranged a 24-month exit facility at a lower interest rate. The new loan cleared the development lender in full, released £600,000 of equity, and allowed the developer to launch their next site while continuing to sell the apartments gradually. By the time the facility matured, all units were sold at close to asking price. The client preserved margins, avoided a distressed sale, and maintained momentum in their pipeline.

Private Banks vs. Specialist Lenders

Not all exit finance is created equal. High street banks remain reluctant to refinance part-sold schemes, but specialist lenders and private banks have stepped into the gap.

Private banks are particularly active in higher-value developments, where they can also offer bespoke structuring around portfolio wealth. For example, they may allow unsold units to be refinanced onto an investment facility, effectively converting them into a buy-to-let portfolio. This dovetails with the strategies we explored in Portfolio Mortgages in 2025: Smarter Finance for Multiple Properties.

Specialist lenders, meanwhile, are more flexible on mid-market schemes outside London. They focus on the fundamentals: is the scheme complete, are sales realistic, and does the developer have a track record of delivery?

Equity Release: Funding the Next Project

One of the most overlooked benefits of exit finance is the ability to release equity from a completed development. Developers often find themselves asset-rich but cash-poor: they’ve built millions in property value, but their cash is locked into the scheme until sales complete.

Exit finance can release part of that equity, giving developers working capital for land acquisition or planning costs on their next project. This forward momentum is critical in 2025, when competition for good sites remains fierce and hesitation can mean missing opportunities.

We highlighted the importance of this kind of liquidity in How to Finance Large-Scale Refurbishment Projects in 2025. The same principle applies here: without timely access to capital, even strong developers can lose momentum.

Strategic Outlook

Exit finance is no longer an optional tool—it is a core part of the development lifecycle. In 2025, lenders, surveyors, and regulators are all focused on reducing systemic risk. Developers who plan their exits early, identify lenders willing to support their sales strategy, and treat refinancing as part of their build programme will enjoy smoother transactions and stronger returns.

Those who leave it until the last minute, by contrast, will face limited options, higher costs, and pressure to accept below-market sales.

How Willow Can Help

At Willow Private Finance, we work with developers across the UK to structure bespoke exit solutions. We know which lenders will refinance schemes early, which will accept equity release, and when private banks are best placed to provide tailored facilities.

Our independence means we are not tied to one type of lender. Instead, we build solutions around your project: whether that means refinancing onto a short-term exit loan, structuring bridge-to-let for unsold units, or securing a facility that funds both the exit and the next acquisition.

In every case, our goal is the same: to protect your margins, reduce your costs, and keep your development pipeline moving.

📞 Want Help Navigating Today’s Market?

If your development loan is nearing expiry—or if you want to release equity from a completed scheme—exit finance could be the smartest move you make in 2025.