Situation: Inefficient Financing of Five Commercial Properties

Our client is a heavy equipment dealer based in Kansas City with dealerships and operations in five states. Their portfolio of five owner-occupied properties previously was financed through three different banks, leading to inefficiencies and extra cost and time. The dealerships also wanted to expand and upgrade their locations to make the best use of their footprints.

Higher Cost of Financing
The client’s interest rates on its owner-occupied financings did not reflect the interest rate environment which had improved over the years. Nor did any of the client’s three existing lenders at the time offer to refresh their loan terms to reflect the improved interest rate environment. 

Managing payment logistics and accounting for three separate banks for five properties was burdensome and inefficient. 

Critical Timing
While our client was open to consolidating the portfolio of five properties into one credit facility, the Federal Reserve was poised to raise interest rates, so First Business Bank needed to move quickly to perform property due diligence and close on its refinance facility to provide a favorable interest rate.

Solution: One Consolidated Real Estate Transaction

First Business Bank’s experienced Commercial Banking team refinanced three different bank loans on five properties into one $12.5 million credit facility, which included $1.3 million for upgrades to the properties.

Streamlined Management
Doing the legwork to consolidate three loans into one helped our client by streamlining the payment and communication to one bank, saving time and energy.

Advantageous Interest Rate
In a rising interest rate environment, our team worked quickly to approve and close on the new credit facility which significantly reduced the client’s interest rate, saving the client tens of thousands of dollars on an annual basis.

Future Expansion
With the $1.3 million of additional fundings approved for capital improvements, the business will add much-needed improvements to the properties, which will maximize the footprint of each building for current and future needs.