The following article will help you determine when you should refinance your self-storage loan.

When it comes to loans for self-storage facilities, there are a lot of things to consider. One important decision is when to refinance.

There are many reasons why you might want to refinance your self-storage business. Remember, too, that timing is everything. 

Here are a few things to keep in mind when considering whether or not to refinance your self-storage unit.

You will want to consider why you're looking to refinance. Is it because you are hoping to get a lower interest rate? Or are you looking to tap into the equity you have built up in your property?

Remember that getting a lower interest rate is not always possible. Consider the environment we are in today; rates are rising and are higher than they were a year and even two years ago.

But the interest rate isn’t everything. You could get more favorable terms with a higher interest rate. For example, maybe you can negotiate a longer term, thus making smaller payments but over a longer period of time.

A move like this could improve your cashflow. And when rates drop, as they inevitably will, you can consider refinancing again to lock in a lower rate.

Once you know your reasons for wanting to refinance, you can start shopping around for the best deal for your particular situation.

Be sure to compare rates and terms from a few different lenders before making a decision. Consider banks, credit unions, and other financial institutions.

Finally, don't forget to factor in the costs of refinancing. While it can save you money in the long run, there are usually upfront costs associated with getting a new loan. Make sure you weigh all of these factors before making a decision on whether or not to refinance your self-storage unit.

If you are unsure where to start your refinancing journey for your self-storage business, contact one of our experienced commercial loan advisors today. 

One of the best loan programs in the market today is the SBA’s 7a loan program. You can use this type of loan for a whole host of financing needs, including consolidating and refinancing existing debt. 

You cannot consolidate or refinance debt using an SBA 504 loan, so keep that in mind, too.

If you do decide to pursue refinancing your self-storage loan debt, make sure you give yourself plenty of time to work through the process. Often, especially with SBA loans, you will need around 3-6 months to work through the loan application and approval process.

But it will be well worth it, as you will often see lower rates and better terms (including longer maturities) using an SBA 7a loan.

Additionally, make sure all your financial statements are up-to-date and that you have been making on-time payments.

With a refinance, any lending institution will consider most, if not all, of the factors it considered when arranging your original financing.

Again, if you need an experienced commercial loan advisor, click here to set up a brief discovery call.