IS YOUR BALLOON PAYMENT COMING DUE?
Balloon Payments: What to Do When Your Lender Won’t Refinance
If you have a commercial mortgage with a balloon payment coming due, you might assume your current lender will refinance. In today’s market, that assumption could be risky.
Many lenders, especially those impacted by post-pandemic restructuring and heightened risk aversion, are pulling back from small-balance commercial loans. Some are selling off portfolios under $5 million, and if your loan is under $1 million, your options may feel even more limited.
The Refinancing Surprise No One Warned You About
Too often, business owners are blindsided when a trusted banker, who once casually promised to “roll the loan over,” suddenly declines to refinance. 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 facing foreclosure on a property they’ve invested time, money, and energy into.
Why Balloon Loans Still Exist
Balloon-payment loans have long been popular among 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 was the only option available at purchase.
The downside? 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
Foreclosure isn’t inevitable, there are options.
Talk to someone who knows the lending landscape and can move quickly.
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.