Developer completion funding

The scenario

A developer has reached completion on a project, and completed stock is sitting unsold while the marketing campaign runs. Short-dated capital bridges the gap to the eventual sale or refinance.

Why the bank cannot solve it

Bank construction facilities are structured around construction; once the project is complete, the bank expects either sale-down or refinance to a standard investment loan. Where neither has happened yet (slower sale market, marketing window extension), the bank channel struggles to extend.

How a private lender approaches the file

The credit team underwrites the sponsor, the completed asset, and the exit. Sponsor track record carries significant weight on completion files; a developer with comparable delivery history is in a much stronger position than one without. The structure is sized against the completed value and the realistic sale or refinance timeline.

Indicative file structure

• Security: registered first mortgage over the completed asset, GSA over the developer entity, personal guarantee from the sponsor.
• Term: sized to the sale or refinance pathway with contingency.
• Exit: sale of completed stock, bank refinance on retained stock, or combination.

What credit will ask for

• Sponsor CV with comparable delivery history.
• Project status: completion certificate.
• Sale evidence: contracts under exchange, marketing report, agent appointments.
• Recent valuation of the completed asset.

Key risks

Sale velocity is the dominant risk. A slower-than- expected sale extends the loan and increases total cost. The credit team underwrites realistic sell-down rates based on the market and builds buffer into the term. Property-secured lending carries the risk of loss of the security on default.

Frequently asked

• What is developer completion funding?
  Short-dated capital for the final stage of a project: holding completed but unsold stock through the sale period. Sometimes called residual-stock finance or completion finance.
• Does this need a strong sponsor track record?
  Yes. The credit team underwrites the sponsor first; the file shape sits on top of that. Files where the sponsor has comparable delivery history progress furthest. First-time developers in this stage usually need stronger structuring.
• How is completion finance sized?
  Against the completed asset value and the documented exit. The credit team underwrites both: how much value is in the completed project, and how quickly the exit (sale or refinance) will actually deliver.
• What is the exit?
  Sale of the completed stock at expected prices, refinance to a bank investment loan if the developer intends to hold, or a combined sale-down with bank takeout on retained stock. Each exit is documented and stress-tested at submission.