A Hard Mini-Perm is a type of mini-perm loan that includes a legal maturity date requiring full repayment at the end of the term, regardless of the development’s stabilisation status. Used in structured property development finance deals across the UK, this approach places pressure on the borrower to secure an exit within a fixed timeframe—typically 3 to 5 years. It is preferred by lenders seeking tighter control over exit risk, especially on large-scale or complex developments where prolonged holding periods are undesirable or impractical.
Within the broader framework of a Mini-Perm Loan, a Hard Mini-Perm sharpens the lender’s exit discipline by removing flexibility around term expiry, making refinancing or disposal non-negotiable by maturity. Compared with a Soft Mini-Perm, which may allow extensions or step-ups, this structure increases execution risk for the borrower but can support stronger pricing or leverage where lenders prioritise certainty. Enforcement mechanisms such as a Notice of Acceleration further reinforce this position, while ongoing viability is often monitored through metrics like the Developer Liquidity Ratio to ensure sufficient capacity to meet the fixed repayment timeline.
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