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Common Reason Commercial Borrowers Need Cash Out

Commercial Mortgage
Posted on 
July 6, 2018

Many commercial mortgage borrowers are looking for a simple cash-out solution, and it’s important for brokers to understand how to help these clients. When a borrower comes to you looking for a cash-out refinance, you need to understand their financial situation and why they need the money in order to secure those funds.

Here are some common reasons borrowers will want a cash-out commercial mortgage:

Debt consolidation

For many small business owners, getting a cash-out commercial mortgage allows them to pay down a number of business debts, such as an existing mortgage or credit card debt. Consolidating these debts into one simple monthly payment frees up funds and makes paying their bills simpler. When you submit a commercial mortgage request like this, make sure you have a payoff or another document that shows how much money your borrower needs.

Working capital

Another reason your commercial borrower may need a cash-out commercial mortgage is take care of various expenses related to their business. Maybe they want to take advantage of a great deal on inventory or they need money in the bank to cover their bills while they wait for receivables. Refinancing their commercial property for cash out allows them to handle these expenses without running into trouble. Be sure to include cost estimates in your submission.

Property improvements

Whether your borrower needs to replace the roof, repave the parking lot or make some other repairs to their commercial property, a cash-out mortgage is a good solution. In this instance, make sure you have cost estimates from contractors to submit to the lender.

Purchasing additional property

Maybe you’re working with a borrower who’s looking to expand their current business and purchase a new property. A great way to secure the necessary funds it for them to refinance a commercial property they already own. When you submit a commercial mortgage request like this, make sure you should include the agreement of sale.

Whether your borrower is looking to pay down debts, improve their building, or purchase inventory, a cash-out refinance is a great solution. In order to help these borrowers secure the commercial mortgage they need, take the time to learn about their situation and why they need the money. This will allow for a smoother road to closing, and you’ll get your commission check that much faster.


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