At some point in the life of your business, you may find it necessary to refinance a loan or mortgage. While the terms you originally agreed to might have served your needs at the time, it is not unusual to seek terms that are more favorable to your present situation. For example, if your loan requires making a balloon payment in the near future, you could refinance to avoid taking that big financial hit.
There are a couple of basic steps you will need to take in preparation for trying to refinance a loan. First, gather up all the pertinent documents that potential lenders will need to see to assess your business. These documents include:
- Balance sheets.
- Profit and loss
- Tax documents.
Additionally, you will need to be able to show your company’s or project’s projected cash flow. Using a debt service calculator can help you determine if your monthly income will cover your loan payments.
When you seek to refinance a loan, it is important to make a favorable impression with all potential lenders. To this end, it can be extremely beneficial to have a thorough and concise business plan on hand when negotiating with a lender.
A business plan that clearly states your goals and methods for achieving those goals demonstrates you have a command of your project and that you are a safe bet to pay back your loan. In fact, many mortgage lenders require borrowers to present a such a plan.
To improve your odds of getting the refinancing you need, you want to get in touch with a knowledgeable business law attorney. The attorney can help craft a strong business plan and advise you on the kind of terms you should seek for your new loan.