The criteria for the new development exit loan:
- 70-72% of site's market value on day one
- no exit fee
- 12-month maximum loan term
- 0.67% interest rate per month, paid monthly
- £15m maximum loan size
- residential security only.
The facility is available for individual or SPV borrowers who want to refinance their development loans for sites which are at or near practical completion.
For this product, brokers will receive a commission fee of up to 2%.
Ian Wilson, CEO at Acre Lane Capital (pictured above), claimed that the additional flexibility is a “game-changer”.
“Typically, the net loan amount that developers have received on day one of a development exit loan has been in the order of 66-68% of the market value of the development — this depends on the length of the loan plus the interest rate.
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“Assuming the developer has the cashflow to service monthly interest payments, we would expect to provide the developer with 70-72% of the market value of the development on day one.
“The most important factor for the developer appears to be the day one amount and, after consulting with the market, we have decided to launch [this] competitive product in the development exit market for sites which are at or near practical completion.”
For developers who can’t service their loan, Acre Lane continues to offer three retained interest development exit products.
These products are designed to suit the varied needs of developers, allowing them to refinance their development loans once the units being built are damp-proof course (DPC), wind and water tight, and at or near practical completion.
For the retained interest loans, the lender offers up to 75% LTV, 66-68% of the site’s market value on day one, and 0.57% interest rate per month.