Commercial Property Refinancing

Posted on October 19, 2012. Filed under: Kevin Johnsrud |

Commercial Property Refinancing

 In today’s market many business owners are looking to refinance their existing commercial property loans to try and obtain more favorable terms.

 Some owners choose to take a lower interest rate which results in lower payments, while still maintaining their current amortization schedule. Others will choose to continue to make the same current payment even with  a lower interest rate resulting in a more rapid amortization.

 Is one option better than the other? In both cases the owner will wind up paying less in interest throughout the term of the loan. One factor that property owners need to evaluate is what payment are they comfortable paying. Some owners use the longer amortization to maximize the interest expense for tax purposes. Others prefer to pay off debt as quickly as possible which in turn maximizes their cash flow.

 Most property owners should work with both their accountant and banker to make sure cash flow is sufficient and any covenants that have been put in place can be met.  Either way, in this low rate environment, the property owner benefits,

 Contact Denmark State Bank today to have your current loan agreements reviewed and allow us to determine the best path for your refinancing needs.


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