Your commercial real estate is a prime investment for your business. Whether you own your own storefront or have a series of rental properties, real estate provides you with several ways to keep your financing flexible. One way you may not be using is to receive additional working capital. Find out today how you can boost your working capital and grow your business with your commercial property.
There are dozens of ways that your business can benefit from additional working capital. Use it to fund necessary improvements or repairs on your commercial building. As apartments and office buildings age, they require maintenance to continue to provide safety and comfort to their occupants. You can also use the additional working capital to upgrade facilities and improve their value. Finally, you can fund any operating expenses or emergency costs that may have come up this month.
There are three basic ways you can leverage your commercial real estate to receive more financing. First, a second mortgage loan can be used in addition to your first mortgage. This is considered a high-risk loan, as your property is being used as collateral for two different loans. In the event of a default, your first loan may receive all your equity while your second loan provider will be given no repayment.
Another flexible financing alternative is a cash-out refinance. If your current mortgage is less than the equity in your property, you can borrow against the additional equity and receive cash. Typically, your financing institution agrees to take on your entire mortgage and offers additional financing in the form of hard money. It’s a flexible way to improve your working capital while still working with a single loan provider.
Finally, refinancing your mortgage provides the same benefits but through your original mortgage provider. If you have a trustworthy reputation built with your mortgage provider and have sufficiently paid off a portion of your mortgage, refinance and gain access to the additional cash for any working capital needs.
From minor bills to major renovations, leverage your commercial real estate to increase your working capital today. Your business needs to stay responsive when faced with looming bills, sudden investment opportunities or emergency repairs. With these financing options, you can not only stay on top of your essential payments but you can keep your working capital free for whatever else may arise. This is just one more way your real estate can work for you.