When Does It Make Sense to get a bank loan for a restaurant? Refinancing is not always the right move. But the
following conditions might signal it’s time: Interest Rates Have Dropped or Are More Favorable If your current interest rate is significantly higher than what you could get today, refinancing may save you money over time. You Need to Improve Cash Flow Whether by lowering monthly debt service or extending the term, a new loan can ease monthly pressure. You Want to Tap into Equity If your property has appreciated or you've paid down substantial principal, a cash-out refinance may unlock funds for renovation, expansion, or paying off higher-cost debt. Balloon Payments or Short-Term Loans Are Looming If you have a balloon payment coming due, or you’re in a short-term, high-cost loan, refinancing to a longer-term or fixed rate may reduce risk.
You’re Consolidating Multiple High- Cost Debts If you have credit card debt, merchant advances, or equipment loans with high rates, refinancing/refinancing + consolidation can bring them under a more favorable umbrella. You Have Good Financials Lenders will expect strong financial statements, debt service coverage, a solid operating history, property value, and creditworthiness.
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