Refinancing Options for Commercial Real Estate

Businesses and commercial real estate owners have many reasons to look into refinancing their property. Some may look to refinance because it helps to reduce a debt strain. Others might need to extend their mortgage. If you are considering refinancing, then it’s important that you know some of the mortgage refinancing options available.

Why Refinance a Commercial Mortgage

One of the main reasons that people refinance a mortgage is to lower the rates. Likewise, they may be looking for longer terms. When you lengthen the terms of a mortgage, then you are able to reduce your monthly payments. This might reduce strain on your business’s cash flow. In addition, you may be able to avoid a balloon. You aren’t stuck making massive payments. In addition to these reasons, if your property is worth more than your mortgage, you might be able to tap into the equity. You can use the money towards your business or property.

SBA Mortgage Refinancing

SBA mortgage refinancing uses the Small Business Administration’s enhance program. The SBA helps lenders to take a risk on small businesses. They secure some of the loans so that the lender will not be out a large amount of money if the commercial real estate owner defaults on a loan. This type of refinancing allows for businesses that can’t go through traditional lenders to have options.

Private Mortgage Lenders

Private investment groups and individuals provide private commercial loans. These do not have the same restrictions as conventional mortgage lenders. If you need more creative solutions, then this might be the right type of refinancing. Private lenders offer term loans, bridge loans, cash-out refinancing and a lot of different options.

Bank Commercial Mortgages

Conventional bank mortgages are an optimal form of refinancing. This allows owners to reduce their monthly mortgage payments and to refinance into a healthier facility. Bank lenders provide commercial loans that have great rates. In fact, some rates are in the mid-single digits! Likewise, you can find loans with long terms that may last up to 30 years.

Businesses and commercial real estate owners often look into refinancing their property. There are several reasons that a business might consider this a good and strategic move. With lower rates, less financial strain and the possibility to tap into the equity, there are more than enough reasons to refinance. Fortunately, no matter the size of your business, there are several different options available for refinancing a commercial building.

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