If a business owner has accrued equity in the commercial property, it may be possible to pull out a portion of it as cash to be used for other purposes.
Remember, your refinance costs are tax deductible which means When you refinance your loan, all of the costs are deductible. You can write off your points, your loan fees, any legal or title fees you pay and any recording fees or registration taxes that your city, county or state charge. However, you will need to divide these costs by the length of the land and write off a commensurate portion every year. For example, if your closing costs are $16,500 for a loan with a 10-year term, you’d be able to claim $1,650 a year in costs.
This can be an effective way to:
- Avoid a balloon payment and reduce your current interest rate
- Finance property repairs or improvements.
- Provide working capital for day-to-day business needs and things like inventory, hiring more employees, or running an advertising campaign.
- Purchase additional commercial properties.
Consider refinancing your commercial property into a new low-cost product for the best results.
