Discover how a Consumers commercial real estate loan protects your business—and makes financing simpler.

Balloon loans are a common way to finance commercial real estate. These loans allow businesses to pay off a portion of the loan over five to seven years, and then refinance the balance— also known as the “balloon.” Balloon loan refinancing can be a hassle because it requires new paperwork, a new appraisal and new underwriting. If the property appraises for less than it did when the original loan was taken out, like many did in the 2008-2010 market downturn, lenders make what’s called a “capital call,” meaning the business must ante up enough cash to have a 20% down payment on the refinanced amount. If they don’t have enough cash, the owners face the possibility of losing their business.

Commercial real estate financing that provides protection

At Consumers, we offer a unique commercial real estate loan that protects business owners from decreasing property values. As long as the loan is in good standing and regular payments have been made, the rate is simply reset after five years.

For example, if your original interest rate was prime plus 1% APR*, at the five-year mark the loan is reset to the current prime rate plus 1%. There’s no need for additional paperwork, an appraisal or new underwriting. More importantly, there’s never any capital call that could put your business at risk.

If you’re considering a real estate balloon loan, talk to us about a Consumers commercial real estate loan first. We’ll help finance your new building with a loan that doesn’t put your entire business at risk five to seven years down the road.

Do you have business banking questions? Contact our knowledgeable commercial loan officers online or call 800-991-2221. We’re also available to help in person at your local Consumers office.

*APR = Annual Percentage Rate. All loans subject to approval. Rates, terms, and conditions are subject to change and may vary based on credit worthiness, qualifications, and collateral conditions.