Refinance Commercial Loan Agreements: 4 Tips If You Are Thinking About Refinancing

Have you ever thought about doing a commercial loan agreement modification

? If not you have the potential to loose thousands of dollars and stand a chance of loosing your property. Consider the vast benefits that a loan modification can bring to you and your business. Like freeing up some cash for starters.

Let's first consider the 'Why',and the reasons why people generally believe that refinancing a commercial loan will benefit them:

1. Interest rate changes. You might know of another lender offering a lower interest rate, or your commercial loan might be tied into a specific rate while interest rates in general are dropping. In such cases it might be possible to refinance loan agreements with another lender or even renegotiate your loan terms with your existing lender.

2. It may benefit your business to extend the loan period. Adding to your amortization time form 15 to 25 years, will impact your payments bottom line. Your overall interest payments would be higher, buy your cash flow would be made healthier by reducing your regular payments. In most cases, business that are having problems making payments can be helped by improving capital in this way.

3. If your lucky and have equity within the business pulling out some cash could free up some spending capital. This can offer at least two major benefits, namely enabling you to invest the capital at a good rate of interest or provide you with a cash sum to enable expansion.

4. You may have a few loans that can be combined into better terms. Many business owners that refinance commercial loans through combing loans in this way can save a great deal in their monthly repayments, particularly useful in a business that relies in a strong cash flow situation.

Whatever reasons you have for refinancing a commercial loan, doing so must offer you a business benefit. Otherwise there is no logic in doing so. This benefit can be related to improved cash flow, tax benefits or expansion through the acquisition of capital assets such as equipment, increased office space or improved manufacturing facilities.

Now let's consider 'How' you are going to refinance your loan:

You can either refinance your loan with your existing lender or with an alternative. If you can not refinance your loan you might do a commercial loan modification. Many business owners tend to change their lenders for a better deal: a lower interest rate, longer period, reduced debt amount, or eliminate late payments. A commercial loan modification can produce great results for you as well.

It is not easy to negotiate with a large number of lenders for the best deal. and that is where brokers become involved. A good broker will have a large number of lenders on their list and will be able to get the best possible deal for you. No matter how good you think you are you will be wasting your time if you think you can deal with a bank yourself. You can't. You need the services of an expert to refinance commercial loan agreements or do a commercial loan modification, and a broker will have the proven expertise to do that properly.

by: Wayne Estes

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