IS YOUR BALLOON PAYMENT COMING DUE?
Balloon Payments: What to Do When Your Lender Won’t Refinance
If you’ve got a commercial mortgage with a balloon payment coming due, you might be counting on your current lender to refinance. But in today’s environment, that assumption could be risky.
Many lenders, especially those impacted by post-pandemic restructuring and ongoing risk aversion, are quietly stepping away from small-balance commercial loans. Some are selling off portfolios under $5 million, and if your loan is under $1 million, the options can feel even more limited.
The Refinancing Surprise No One Warned You About
Too often, business owners are blindsided when their trusted banker, who may have casually promised to “roll the loan over”, suddenly declines to refinance. And while it feels personal, it’s not: lenders are under no obligation to renew your loan once the balloon payment hits.
This leaves borrowers scrambling to secure new financing before the bank forecloses on a property they’ve invested time, money, and energy into.
Why Balloon Loans Still Exist
Short-term loans with balloon payments have long been the go-to for small business owners and investors. Why?
- Banks prefer short-term exposure on smaller, riskier loans
- Balloon structures allow lenders to reassess risk at maturity
- For many borrowers, it’s the only option offered at the time of purchase
But the downside is clear: when the term ends, you’re on the hook, and if your lender walks away, you need a backup plan fast.
What to Do If Your Lender Won’t Refinance
Here’s the good news: there are still lenders who specialize in small-balance commercial loans, fix-and-hold projects, and long-term refinancing. You just need to know where to look.
Step 1: Don’t panic.
Foreclosure isn’t inevitable, there are options.
Foreclosure isn’t inevitable, there are options.
Step 2: Pick up the phone.
Talk to someone who knows the lending landscape and can move quickly.
Talk to someone who knows the lending landscape and can move quickly.
Step 3: Contact us today
We work with a network of lenders who offer long-term solutions, some with 25-year amortizations, fixed rates, and flexible underwriting. Balloon payments don’t have to be a dead end. With the right guidance and lender match, you can refinance, restructure, and keep your business moving forward.
We work with a network of lenders who offer long-term solutions, some with 25-year amortizations, fixed rates, and flexible underwriting. Balloon payments don’t have to be a dead end. With the right guidance and lender match, you can refinance, restructure, and keep your business moving forward.