Tools
Renewal Cost Check
A quarter of a percentage point on a commercial loan costs about $2,500 a year for every million borrowed. On a $3 million balance, half a point is $15,000 a year and $75,000 across a five year term. This calculator shows what that gap is worth on your own balance, rate and remaining term.
Enter your loan balance and current rate to see the figures
These figures are an illustration calculated from the numbers you entered. They are not a rate offer, a loan commitment or an underwriting decision. A cash flow test applies as well and can size a loan lower.
FAQ
Renewal questions
What does a quarter point actually cost?
A quarter of a percentage point costs $2,500 a year for every million borrowed. On $3 million that is $7,500 a year, and $37,500 across a five year term.
Why does my lender only send one number?
A renewal quote reflects that lender's appetite, cost of funds and the risk they already hold. It is a real number, but it is one number from one source.
What moves a commercial renewal rate?
Term, leverage, the cash flow test, whether a personal guarantee is given, and fees that sit outside the rate.
When should I start shopping a renewal?
Around eighteen months out. At month two there is time to gather documents and compare offers. At month seventeen there is time to sign what arrives.
How much can I take out in a refinance?
It depends on the property value, the balance owed and the advance rate a lender applies to that type of business. A cash flow test applies as well and can size a loan lower.
Disclosure
How we are paid
Business Advisory Services is a licensed Texas real estate brokerage. When we represent a party in a sale, our commission is paid by that party at closing under a written agreement.
Shams Siddiqui also acts as an agent for a commercial lender. When a buyer uses that lender, he is compensated by the lender for the work he does on the loan. That is separate from any commission on the sale.
You are not required to use this lender. You may take your financing anywhere, and your choice does not change the price, the terms, or anything about how we handle your offer.
If your loan is an SBA 7(a) or 504 loan, SBA rules treat a compensated agent as an agent of record. Our compensation is disclosed on SBA Form 159.
Not a commitment to lend. Subject to lender underwriting. Terms vary by borrower.