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When Should I Refinance My Commercial Loan?

One of the biggest questions facing commercial real estate owners - especially in today’s wild market - is when to refinance their loans. While refinancing can be a lucrative choice in reclaiming potential revenue dollars for other asset growth, you should come to the table prepared.


In a conversation with Jason Williamson, the Commercial Account Manager at RBC in Kelowna, The Picture of Wealth podcast host Dustin Serviss discusses some of the key aspects to considering refinancing.



When Should You Refinance?


According to Jason Williamson, there are several key times when you may want to get a second opinion on refinancing your commercial loan:


  • When your loan is nearing maturity

  • If you are interested in learning more about your potential financial reporting

  • When it’s necessary to take advantage of equity takeouts to buy long-term assets

  • Any time you are considering adding space to your building or building onto your property


Williamson also encourages those who have held onto the same loan for several years to consider shopping around for a refinance - and potentially bringing all of your finances under one vendor.


For example, you may have initially bought your business with a vendor to receive your initial financing, but now you are in a position to switch over your loan and renegotiate your rate. This is the perfect time to sit down with a commercial refinancing expert!



Cash Flow Is King


What is the key to a successful refinance?


According to Williamson, one of the most important aspects to consider when approaching a commercial refinance is cash flow.


Having the ability to show that your company can service the new debt will increase the chances that you will have a fast and successful refinance.



Don’t Fear The Breakage Costs


It is also important to consider the potential breakage costs with refinancing.


Each financial institution will have in its terms and conditions the breakage costs involved with moving your loan and refinancing.


However, don’t let breakage costs scare you away from a lower rate! If that cost is $10,000, it may be a hard pill to swallow at first, but with the refinance you can quickly remake that loss with lower rates and higher cash flow.



Listen To Full Interview Online


Want to hear more great insights from one of Kelowna’s leading refinancing experts? Listen to the full interview between Dustin and Jason Williamson on The Picture of Wealth!


Want to hear more great lessons on life, happiness, and true wealth? Check out the Picture of Wealth podcast - hosted by Dustin Serviss. Discover the tips, tricks, and insights that unlock a life well spent. Listen today where you listen to podcasts.



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