When looking at your available financing options with commercial loan programs, one thing you need to evaluate is whether the interest rate is fixed or adjustable. Fixed interest rate programs are often preferred, over adjustable ones, because they lock in the rate over the entire length of the loan. However, you do have to keep an eye on current market interest rates on fixed loan programs, as they do drop. In the event the rate drops, it is worthwhile to consider refinancing your current fixed rate loan with a new one through Commercial Lending Corporation.
With an adjustable rate commercial loan program, your interest rate is often fixed for a short period of time, ranging from 2 to 5 years. After this period, your interest rate can be adjusted based upon the current market rates, plus a specified percentage amount. For example, you are at the end of your fixed period, and the current market rate is 5 percent. When you first obtained your loan, the current market rate was 4 percent, and your specified percentage amount was also 4 percent, meaning your initial fixed rate was 8 percent. Now, because you are entering the adjustable rate period of your loan, your interest rate may be increased to 9 percent, based upon the current market conditions.
However, obtaining an adjustable rate loan from Commercial Lending Corporation can be beneficial in certain circumstances. For instance, if you are a higher risk due to a lack of, or poor, commercial credit and are not able to qualify for a fixed rate program, you still could quality for an adjustable rate program. Most programs contain a clause where you are able to refinance the loan after a set period of time without any penalties. This allows you time to establish or repair your credit so when you are able to refinance, you are able to secure a fixed rate program.
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