The first thing you should put your finger at is the reason for refinancing. Financial institutions usually require a strong proposal for the project that shows a continuous stream of cash flows. Therefore, if a project deals in with short term investment, it is highly unlikely to receive a long-term loan consideration from the lender.
Lender will require several things from you before you prove yourself eligible for the loan. First of all, they will look at the loan proposal. Hence, don’t take a risk in doing that job yourself rather hire a specialist and pay him to bring things together for you. The major information usually includes tax returns, profit figures, sales, projections and cash flow for the next five years at least. A well prepared mortgage business plan will enhance the chances of acquiring a loan.
You should revalue your property with current market rates and includes those figures into the plan. However, make sure you don’t underestimate or overstate the figures because that will definitely force the lender to think twice before refinancing the commercial loan. The historic cost would be diminished in the calculation of Return on Investment and new figures will be used. Therefore, don’t rush through; do everything step-by-step.
There is a debt service tool calculator available online which can be utilized in calculating the market value. You will require several inputs and the calculator will use the built in formula to evaluate the property.
Never broaden the focus of the proposal beyond the usage of the mortgage commercial loan because it will just lose the interest of the lender and might force him to miss out on important information.
Understand the requirements of lender and act accordingly. Never assume anything by yourself and always back up your figures with realistic suppositions.