A Construction-to-Mini-Perm loan is a blended facility that covers both the construction phase and the immediate post-completion period within a single loan agreement. Common in UK property development finance, it removes the need to refinance at practical completion by automatically converting into a mini-perm structure once the build phase ends. This integrated approach provides a smoother funding transition for developers, reduces transactional risk, and is especially beneficial on schemes requiring stabilisation or letting before exit via sale or long-term finance.
In structuring terms, a Construction-to-Mini Perm facility sits as an evolution of the Mini-Perm Loan, combining development funding with a built in stabilisation period under one facility. During construction, funds are typically drawn against certified progress, with oversight often involving an Independent Certifier to monitor works and approve drawdowns. Once practical completion is achieved, the loan transitions into its mini-perm phase, allowing time for leasing, income generation, or market positioning prior to exit. This structure is particularly useful where immediate refinancing or disposal is not optimal, aligning funding with real world asset performance and reducing exposure to refinancing risk at completion.
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