As a business owner you’re always looking for smart ways to improve your bottom line. When you refinance commercial mortgage terms you could end up improving your business’s financial situation. There are various reasons why you might want to refinance, but whatever the specifics of your situation, the overall reason to refinance is to come out ahead in some financial way. Read on for four reasons why you should consider refinancing on a commercial mortgage.

Refinance for Cash

If you have accrued equity in your business’s commercial property, you may want to convert some of the equity to cash. You can use the money for whatever your business needs. For instance, property repairs and improvements can be financed through the equity in your property. You can also use the money for working capital to pay for the daily operations of running your business. You can take the cash-out refinancing as a lump sum, or, if you prefer, you could use the financing as a line of credit to be used if and when you need it.

Go From an Adjustable to a Fixed Rate Loan

If your loan has an adjustable rate, you might consider refinancing to a fixed rate. While an adjustable rate can be a good idea to keep initial loan costs down, or to take advantage of low rates, there are some pros to a fixed rate. If, for instance, interest rates are on the rise, you might want to lock in your lower rate before your loan repayment gets too expensive. Also, an adjustable rate can make it more difficult for you to plan your monthly expenses. When you refinance commercial mortgage terms to a fixed rate, you’ll always know what your payments will be.

Burst the Balloon Payment

A commercial mortgage with a balloon payment means the majority of your loan will be due at the end of the loan period. A large payment due all at once may be not only daunting, but could also prove to be nearly impossible to manage. When you choose to refinance commercial mortgage debt to more conventional terms, you’ll avoid the big, dark balloon that hovers over your loan. Your debt will be broken into smaller chunks that you can pay off over time.

Get a Lower Rate

Perhaps one of the best reasons to refinance your commercial mortgage is to get a better interest rate. When the interest rate falls, you could potentially save thousands of dollars by refinancing your commercial mortgage.

If you decide to refinance commercial mortgage terms, you’ll be faced with closing costs, lenders fees and appraisal expenses. You’ll need to decide whether these expenses make sense for you and whether refinancing will give you more benefits than you currently have.