Refiancing a commercial loan?

[Shane Vork]

3 years ago, we locked in pricing to buy our current commercial building for a fair market value at the time. In 2021 we bought the property for the agreed amount from 2019. Now that we have renovated areas of the building and added value wondering what the process is for refinancing a commercial loan and if there is a certain time period we need to wait before we can do this.

[Brad Hayden]

@Shane Vork

Your current loan docs should spell out any pre-payment penalties, yield maintenance, etc associated with the current loan. 

New lender rate and terms, including seasoning requirements, will depend on loan type, loan amount, leverage, time held, value of renovations, current appraised value, operating business history and financials, credit history, etc. They may limit their valuation to original price plus actual cost of verifiable renovations.

If you have depository accounts and a good relationship with a local community bank, start there.