Refinancing

If you currently own a commercial property or are carrying a commercial loan, now may be an excellent time to consider refinancing. Ponce D. Moody Funding partners with lenders across the country to ensure you have access to reasonable terms and competitive interest rates. We can help you determine what lines of financing would best suit your needs and position your company for both immediate and long-term success.

When Should You Refinance?

There are a variety of variables that could determine the perfect time to refinance your commercial loan or mortgage:

• What closing costs would you incur as part of the refinanced loan, and what portion of the expenses would you finance out of pocket?
• How would the new loan impact your monthly cash flow?
• Once refinanced, how much longer would it take to pay down your principal balance?
• Does your current loan require future balloon payments that will negatively impact your capacity for continuing operations?

How Will Refinancing Affect My Cash Flow?

Most companies seek out refinancing loans to improve cash flow. Refinancing can accomplish this in two ways: 1) decreasing the interest rate and, consequently, the monthly payment due to the financier, and 2) extending the loan payment period to reduce monthly payments in exchange for a longer term.

If your company’s current loan includes ballooning payments, refinancing may be necessary to maintain a positive net operating income and optimal liquidity. Even with an extended payoff, it may be better to delay paying down your principal balance while protecting your operational capacity.

Are There Closing Costs?

Refinancing your commercial loan or mortgage will likely include a variety of closing costs. We can provide you with a step up on your competition by helping you minimize your potential expenses. We will work with you to ensure that there are no surprises and that you can find the right balance between out-of-pocket and financed closing costs.

Closings costs could include, but are not limited to, appraisal fees, which currently average around $4,000; environmental studies, which generally start at approximately $2,000; and loan origination fees, the amount of which depends on multiple factors.

The cash flow impact of your closings costs will depend on how much of the expenses you pay out of pocket and your monthly loan savings. For example, if you spend $12,000 in closing costs for a loan that saves you $3,000 per month in loan payments, it will take four months for your cash flow to break even.

How Will Refinancing Affect My Principal Pay Down?

While many commercial property owners prioritize cash flow over mortgage payoff, it is essential to consider how refinancing will affect your loan’s term. Paying down your loan balance improves your equity position and provides additional financing flexibility over time.

There are many factors to consider before refinancing a commercial loan or mortgage. What closing costs would your business incur, and how much of those expenditures would you pay out of pocket? How would a refinanced mortgage affect cash flow and long-term equity? At Ponce D. Moody Funding, we can help you answer these questions and find the right lender for your business. Contact us today for a no-obligation case review.

How to Get Started

If your company needs to refinance debt for whatever reason, contact Ponce D. Moody funding for a confidential refinancing options review. We are here to help you through the red tape and secure the necessary refinancing as quickly as possible.