Glossary
Exit strategy
Also called: exit, repayment strategy
An exit strategy is the plan for repaying a loan at the end of its term, typically through the sale of a property, a refinance with another lender or a business cash event. Short-term lenders assess the exit closely because it is how they get repaid.
An example
A borrower taking a short-term loan to buy at auction explains that they will refinance with a bank once their business accounts are lodged. They show the lender correspondence and a timeline to support the plan.
Why it matters
A credible exit, with a backup plan, is often as important as the security. If the exit fails, the borrower may face default interest or enforcement, so it is worth stress-testing timing and price before committing.
Points to check
Write down the main exit and a backup, with dates. For a sale, include a realistic price, the marketing period and settlement time. For a refinance, check whether the new lender is likely to lend on the property and your circumstances at the end of the term. Share the plan with the lender and ask what evidence it wants. The exit timeline planner helps work back from the loan's expiry to key dates.
Try it: Exit timeline planner