END OF LEASE BALLOON PAYMENTS

Balloon Payments

If you have a mortgage loan with a balloon payment coming due, you’re probably expecting your current lender to refinance your loan when the term ends. However, you may be in for a surprise.  With the crash of 2008 still haunting lenders, and the impact of the Pandemic still lingering, many lenders have decided not to rewrite new loans for their current customers.  Some are even selling off smaller debts to reduce their risk.  As more and more small lenders get merged into bigger banks the lending options for borrowers with loans under $5,000,000 are decreasing.  If your loan is under $1,000,000 your options are even worse.

Sadly, a lot of business owners find themselves left out in the cold as their trusted lenders have failed to let them know that they will not refinance their current debt even though the banker may have informally promised the borrower that they would write another loan when the time comes.  However, they are under no obligation to do so when the term ends, sending the business owner or investor into a frenzy to find a suitable lender before the property is foreclosed on by the bank that will not refinance the debt.

Why choose a loan with a balloon payment?

Short term loans with balloon payments are the traditional way that banks lend to small business owners and investors.  Often, they are the only choice banks will offer to these borrowers because banks do not want to lock up their capital in small loans that pose a greater risk than large companies do.  Unfortunately, small business owners and investors usually do not have the time to investigate lenders when they are looking for financing solutions; they are simply too busy running their businesses.

So, what do you do if your lender will not refinance your loan?

Despite the rush to get out of the small loan space, there are still plenty of great lenders out there. The issue is finding them. If you find yourself in this position you need to do the following:

Don’t panic.

Pick up the phone.

Call me.

There is always a way, and we have access to many great lenders who can help you.  Many of our sources even offer long term loans up to 25 years or more!

Call Lisa at:  516-268-0350

Email: lisa.rodino@fitufinance.com