The amount of refinancing is up to 80% or 85% of the value of the real estate, plus 80% of the value of the business value!
For example: If the real estate appraisal is $2.5 million, and the business is valued at $1,000,000, then right now, a borrower could refinance up to $2,925,000 = ($2,500,000 x 85%) + ($1,000,000 x 80%)
Since many lenders just refinance based on the real estate value, and do not consider the business value, refinancing can happen much earlier, so the borrower can save money starting next month instead of waiting a few years.
- Loan Terms:
- Real estate: 20 year term and amortization
- Business: 7 year term and amortization
- $5 Million maximum refinancing amount
- Only for owner operators – not investors
- Borrower’s home not taken as collateral
- Requirements for refinancing:
- 3 years in business
- Good Liquidity – $300k is good
- Profitable – a 1.25 Global debt service coverage
- Positive trends in Enrollment
- Closing time from when Lender gets complete loan request:
- 3 to 4 weeks for refinancing when the loan is just based on the business value (i.e. no real estate) – no business valuation required
- 6 to 8 weeks for when there is real estate – business and real estate appraisal required
- Lender Origination fee: 0.5% of loan amount + closing fees ($5k to $10k)
How Much You Can Save By Refinancing Your Current Loan? Submit your information online if you are interested in refinancing an existing Childcare Center loan.
Complete an online application and submit it now.
Have questions on refinancing? Contact: JayWhitney@ChildcareBrokers.com 770-410-7582