Reality Paper
  • Home
  • News
  • Lifestyle
  • Entertainment
  • Tech
No Result
View All Result
Reality Paper
  • Home
  • News
  • Lifestyle
  • Entertainment
  • Tech
No Result
View All Result
Reality Paper
No Result
View All Result

What is An Exit Strategy (and Why is it so Important)?

Adrian by Adrian
1 week ago
in Business
Reading Time: 3 mins read
0
What is An Exit Strategy
717
SHARES
1.9k
VIEWS
Share on FacebookShare on Twitter

When applying for a bridging loan, development finance or a similar product, your ‘exit strategy’ is your plan for repaying the loan in full and on time. 

Understandably, lenders place great emphasis on the viability of applicants’ exit strategies, as part of their eligibility checks. 

Your job is to convince your lender that your exit strategy is suitably robust, and that they will get their money back by an agreed date, come what may. 

Contents

  • Why is an Exit Strategy Important?
  • How Can I Be Sure My Exit Strategy is Solid?
  • What Exit Strategies Can I Use?
  • How Can I Boost My Chances of Qualifying?

Why is an Exit Strategy Important?

In the absence of an exit strategy, a lender technically has no way of knowing if or when they will get their money back. It is possible to take out a bridging loan without an exit strategy – a product referred to as an ‘open’ bridging loan.

But as these ‘open’ facilities are considered higher risk on the part of the lender, they are more difficult to qualify for and always attach higher rates of interest.

Either way, having a concrete exit strategy in mind is just as important for the borrower as it is for the lender. Should your exit strategy fail, you will face the prospect of default charges and elevated interest rates until your debt is settled. 

How Can I Be Sure My Exit Strategy is Solid?

Truth is, there is technically no such thing as a 100% bullet-proof exit strategy.  Even if you have a buyer for your property or development lined up ahead of time, they could pull out at the last moment.

This is why it is important to take all possible contingencies into account, before applying for a bridging loan or a similar short-term facility. 

Exit loans can often be taken out towards the end of an initial loan term, in order to provide additional breathing room. This is effectively an extension of the original loan term, or a separate product issued to repay the initial facility for repayment several months later.

If your exit strategy fails, this may be the only option you have to avoid heavy penalty fees and damage to your credit score.

What Exit Strategies Can I Use?

Bridging loans providers and development finance specialists are usually willing to consider almost any viable exit strategy. Even so, the most common options for exiting a short-term loan are as follows:

  • Sale of the primary property
  • Sale of other investments
  • Refinance to a longer-term mortgage
  • Sale of a secondary property
  • Inheritance or use of personal savings

Understandably, some exit strategies are considered more robust and viable than others, which may be reflected in the competitiveness of the loan you are offered. 

How Can I Boost My Chances of Qualifying?

Irrespective of your planned exit strategy, it is essential to seek independent broker support at an early stage. This will help you build a clearer picture of the options available, and put together a convincing case to present to your lender. 

After which, your broker will negotiate on your behalf to ensure you get an unbeatable deal, keeping monthly interest and associated borrowing costs to the bare minimum.

  • Trending
  • Comments
  • Latest
1234movies

1234Movies | Watch Movies Online Free On 1234Movies.to

June 21, 2021
mp3 juice, mp3juice

Mp3 Juice Download Free – Mp3Juice Music Download

April 11, 2020
Provence Residence EC Location and Plans

Provence Residence EC Location and Plans

November 17, 2021
Inelz semi-permanent makeup: An innovation in the cosmetic industry

Inelz semi-permanent makeup: An innovation in the cosmetic industry

October 13, 2021
Best ways to make money online

Best ways to make money online

3
Mastering how to build Social Media Reports

Mastering how to build Social Media Reports

2
How To Make Selfies With Dorian Rossini

How To Make Selfies With Dorian Rossini Best Tips

2
What is a Home Warranty Plan | Total Home Protection

What is a Home Warranty Plan | Total Home Protection

2
Arab taweez in help of yemenese people

Arab taweez in help of yemenese people

May 21, 2022
Tainiomania: Is It Safe And Legal To Watch Greek Movies

Tainiomania: Is It Safe And Legal To Watch Greek Movies

May 21, 2022

What It Means to Be the Pope of Buddhism

May 21, 2022
Upon resumption, the relationship between carpets and indoor air quality has never been more important

How to get approved for a loan for your retail business

May 21, 2022
Reality Paper

Reality Paper is a platform where you can read interesting news about TV shows, Movies, Lifestyle, Business and many more.

Contact: worldmusti(@)gmail.com

Categories

  • Apps
  • AreaCode
  • Auto
  • Business
  • Cartoons
  • CBD
  • Celebrity
  • cryptocurrency
  • Digital Marketing
  • Edu
  • Entertainment
  • Exclusive
  • Fashion
  • Featured
  • Fitness
  • Food
  • Forex
  • Gadget
  • Gaming
  • Health
  • Home
  • How to
  • kitchen
  • Law
  • Lifestyle
  • Meaning
  • Mobile
  • Movie
  • Music
  • News
  • Pet
  • Politics
  • Quiz
  • Real estate
  • Relationship
  • Reviews
  • Science
  • SEO
  • Social Media
  • Sports
  • Tech
  • Torrents
  • Travel
  • TV shows
  • Uncategorized
  • Website
  • World

Recent News

Arab taweez in help of yemenese people

Arab taweez in help of yemenese people

May 21, 2022
Tainiomania: Is It Safe And Legal To Watch Greek Movies

Tainiomania: Is It Safe And Legal To Watch Greek Movies

May 21, 2022
  • About Us
  • Contact Us
  • Privacy Policy

© 2022 Reality Paper All Rights Reserved.

No Result
View All Result
  • Home
  • Entertainment
    • Gaming
    • Movie
    • Music
    • Sports
  • Lifestyle
    • Fashion
    • Food
    • Travel
    • Health
  • News
    • Business
    • Politics
    • Science
    • World
  • Tech
    • Apps
    • Gadget
    • Mobile

© 2022 Reality Paper All Rights Reserved.