|HOME | ATTORNEYS | DIRECTIONS | CONTACT US ||
McGunagle, Reidy & Hentz, Ltd.
2088 Broad Street, Cranston, RI 02905-3342
PH: 401.941.2088 - FAX: 401.941.0017
A Business Lawyer In New Orlean Business Law And Operation Tips Business Law Attorneys Business Law and Commercial Solicitors Business Law and Law Firm Business Laws Basics Business Laws For Small Businesses Business Laws Unveiled Business Litigation Commercial Law Payment Commercial Loan Modification Success Tips Commercial Refinancing Commercial Transactions Gone Bad Commercial Transactions Money Laundering Company Law Services Company and Business Laws Differences Between Family Solicitors Direct Commercial Funding Review Employment Law Florida Real Estate Lawyers History Of Business Law Degree How Can Attorney Help You How To Choose LLM Business How To Finance YourBusiness How To Get Investment Money How to Make Commercial Transactions Immigration and Business Law Important Facts About Commercial Mortgages Important Points to Know Intercompany Business Transactions And Relationships International Commercial Arbitration - Law Late payments in commercial transactions Laws Surrounding Online Pharmacy Business Legal For Trade Scale Managing Business Law Ntep Scale Assurance Of Quality Role of Commercial Law Firms Salespeople Must Understand the Fundamental Principles Small Business Law and Their Issues Specialists Navigating the Legal Minefields Startup Law 101 The Best Business Law Books The Law Of Attraction The Necessity of Business Law Things You Should Consider Listing US Commercial Mortgage Basics Finance Using Your Slow Paying Invoices Walker Commercial Fundings Experience What Commercial Law Deals With What Constitutes A Breach Of Contract What Is Business Law What Is the Checklist What You Need To Know About Business What You Need to Know Where to Go For Training Why to Have a Trusted Probate Work With The Best Real Estate
The decision to refinance a commercial loan is an important one. In this article, we take a look at the key factors to consider when you are considering commercial refinancing.
Why should you pay attention to refinancing standards? Well, refinancing is infinitely more common in the world of commercial financing than it is with personal loans. It is fairly rare for a commercial loan to be paid up completely through its term. Instead, loans are refinanced constantly to roll over balloon payments that are usually built into the loans themselves. The common analysis used in a commercial refinance transaction is the discounted cash flow method. This is essentially a comparison of the current loan with the proposed loan on a net value basis.
Cash flow is obviously the most important factor looked at. Specifically, what is the effect on cash flow of the proposed refinance? Ironically, you are in concert with the views of the lender on this. After all, don't you want cheaper terms than you had on the original loan? One method used frequently is to extend the amortization on the refinance to lower the payments, a method both the lenders and clients are happy with.
Closing costs are another factor to take into account when refinancing. I don't have to tell you they can add up quickly on a commercial loan. The good news is most of the costs and fees can be rolled into the refinanced loan, but one can expect to pay for the appraisal and any environmental reports. Still, that is a significant up front cash savings.
McGunagle, Reidy & Hentz, Ltd.
2088 Broad Street
Cranston, RI 02905
401-941-2088 | Fax 401-941-0017