Commercial Refinancing Alberta | Commercial Refinance Alberta

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Refinancing your organization’s upcoming commercial property debt could be an opportunity to unleash much-needed equity if approached correctly.

Asian ladies framed by large city structures consider refinancing her commercial building to increase liquidity in her firm.

The current economic environment has highlighted the need for liquidity in the survival of many businesses. Uncertainty has raised concerns about short-term cash flow and the ability to fulfill future capital requirements, exacerbated by the impending maturity of a real estate loan.

However, refinancing your real estate may provide an opportunity to access the equity built up during years of real estate value appreciation or the amortization of an existing loan. With the future remains uncertain, extra money from a loan refinance can provide some stability for your firm. Before proceeding, there are various aspects to consider to prevent potential errors in the refinancing process and optimize your outcomes.

With the future remains uncertain, extra money from a loan refinance can provide some stability for your firm.

Make use of the larger real estate capital markets.

In comparison to previous moments of economic instability, real estate capital markets have remained reasonably liquid, and interest rates are at all-time lows. Lenders are tightening their underwriting criteria in some cases, avoiding specific property types and areas that the pandemic has disproportionately impacted, and instituting safety measures such as more significant reserves and lower loan-to-value ratios.

That is not to argue that the market cannot offer competitive refinancing solutions. To uncover those chances, the procedure may now necessitate extra time and research. To better serve you as a client, your current financial institution may be willing to give you a new real estate loan. However, as was true before the epidemic, other lenders may be a better fit for your financial needs depending on loan size, asset type, borrower, flexibility demands, and other considerations. Seeking information from diverse lender types can help you secure the most competitive terms on the market.

Engaging in the real estate capital markets necessitates access to an extensive network of lenders and the knowledge to compare their experience and lending terms. Hiring a trustworthy advisor to supervise the mortgage brokering process makes the most sense for many business owners. Because of their market contacts, your real estate advisor will be able to find more possibilities for you, and they will be able to negotiate on your behalf.

Prepare to fight for your property.

Even though lenders’ interest in giving real estate loans varies, interest rates are projected to remain low for the foreseeable future, making refinancing an appealing alternative for owners. You may substantially increase the refinance process’s efficacy (and efficiency) by anticipating potential stumbling blocks and participating in the due diligence process.

Lenders, for example, frequently employ a broad, cautious range of marketalternative real estate financing assumptions to assess the value of the commercial real estate (and the loan that can be obtained), mainly if they are inexperienced or sophisticated real estate lenders. This method, however, overlooks essential information particular to your structure or region. Because the property’s worth is determined by the cash flow it generates, it should be determined by its purpose and utility as an integral part of your business. No one is better familiar with the use of your property than you, as the owner and user, so we encourage that you remain involved in the process. Making your case for more acceptable assumptions can increase your application’s confidence and more funds accessible to your company.

If you have a lease in place, even if it is with a related party, the lease rate may impact the loan value. Before approaching a lender for refinancing, consider restructuring the lease with more marketable conditions.

Recognizing typical concerns is a fantastic strategy to minimize obstacles and get through the refinancing process efficiently. Owners may discover that, as with the mortgage banking process, the assistance of a real estate consultant in designing attractive leasing conditions and uncovering extra chances to be involved can significantly influence the outcome.

Making your case for more acceptable assumptions can increase your application’s confidence and more funds accessible to your company.

Investigate alternative real estate financing options.

Before approaching your lender, you should be informed of all available sources of financing. Otherwise, you risk losing funds or other benefits:


Whereas standard financing is limited to 50 to 75 percent loan-to-value ratios, nontraditional financings such as sale-leasebacks can give up to 100 percent of the property’s worth. A sale-leaseback transaction occurs when an owner-operator sells their facility while concurrently leasing it back from the new owner. This allows you to produce income from your real estate asset while preserving long-term control over the area.

Programs at the state and federal levels

Even before the epidemic, federal and state initiatives were in place to assist building owners with additional cash. For example, we can assist property owners in determining whether PACE funds are available to finance energy-saving renovations or get brownfield dollars for cleanup or redevelopment.

Local financial incentives

As communities continue to prioritize economic development, many municipalities offer incentives to enterprises inside their borders to expand or strategically relocate.

Understanding your alternatives will help ensure that your real estate asset is optimized to help your company develop. If you want to learn more about alternative funding, here are a few resources to get you started:

What developers should understand about economic development incentives

New Markets Tax Credits will help you cover the gap left by COVID-19 in your capital campaign.

Act now if your loan is due to mature within the next 18 months.

Given the uncertainty regarding the pandemic’s long-term effects on various asset classes, many lenders have been wary of re-entering the real estate financing market. As a result, more significant loan revenues and cheaper interest rates may be available. This prudence may affect the time required to get new financing or refinance an existing loan. On the other hand, traditional refinancing is still an option if you can engage the broader capital markets, stay involved in the due diligence process, and resolve any obstacles that develop quickly.

Following an audit of your company’s entire capital stack and business goals, it may be worthwhile to investigate any alternative financing options available, in addition to standard refinancing.

If your mortgage is due to mature in 18 months or fewer, the time to act is now. Contact our real estate financing specialists for assistance in analyzing your financing alternatives, getting the best terms, and managing the refinancing process so you can focus on your core business.


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