Wednesday, 13 February 2013

Economy Improving, Businesses Refinance Commerical Loans


In the rough days of the Great Recession business owners hung onto whatever they could regarding their commercial loans, happy being able to make payments in dark economic times. As things are now starting to get better, explains Carlos Hank Rhon, these same entrepreneurs are looking to possibly refinance the same loans, hoping to get better interest rates. It is possible to refinance commercial loan but to get a good deal requires that some criteria be met.

Lending institutions don't just hand out favors and they will not do much for someone who has a poor payment record. Prior to even approaching a lender for refinancing, recommends Carlos Hank Rhon the business owner needs to be sure that all payments were on time prior to the meeting. Business owners should also make sure that all financial statements are prepared properly and are on-hand to present to the lending institution. 
A strong relationship with the bank helps but assurances such as a good cash flow ought to be on the balance sheets. Any penalty points have to be factored into the final deal and a business owner has to be able to show collateral if it is requested. A major concern ought to be with the final deal looks like in writing. If it means having an attorney look at it first prior to signature, that's not a bad idea.

Other lending institutions can be investigated for possible refinancing but their terms may include moving all business to them that may include personal checking accounts as well. A small business owner should not hesitate to review all options in order to get a refinancing. However, it has to be remembered that this is a business transaction and unlike the mortgage refinancing it is not as cut and dried a process.

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