Commercial Balloon Payment Coming Due: Don’t Wait Until You’re Out of Time
Most commercial mortgages aren’t fully amortizing — they have a balloon payment due at the end of the loan term. A 25-year amortization with a 10-year term means that after 10 years, you owe the remaining principal balance in a lump sum. That lump sum is the balloon.
The problem isn’t the balloon itself. The problem is when property owners ignore it until they’re 60–90 days out — at which point their options have narrowed significantly and lenders know they’re under pressure.
If your balloon is coming due in the next 6–18 months, this is your action plan.
Step 1: Know Exactly What You Owe
Free Download: Commercial Balloon Maturity Checklist
Everything you need to do in the 12–18 months before your loan matures. One page, no fluff.
Before you can approach any lender, you need three numbers:
- Current outstanding balance — your balloon payoff amount
- Current property value — ideally a recent appraisal or solid broker opinion of value
- Net Operating Income (NOI) — your property’s annual income minus operating expenses (not debt service)
With these three numbers, you can calculate your own LTV (Loan-to-Value) and approximate DSCR — the two metrics every lender will look at first. If you’re below 75% LTV and above 1.20x DSCR, you’re in strong shape with most lenders.
Step 2: Don’t Start With Your Current Bank
This sounds counterintuitive, but it’s critical advice. Many property owners call their existing lender first as a “courtesy” — and in doing so, they telegraph that they’re facing a deadline.
Once a lender knows your balloon is due and you’re actively looking, your negotiating position weakens. Start the process with the broader market first. Get outside offers. Then — if you want to give your existing bank a chance to compete — you can approach them with leverage.
Step 3: Understand Which Lenders Are Active in Your Market Right Now
The lending environment changes constantly. In 2026, the CRE lending landscape looks like this:
- Banks and credit unions have tightened significantly on office and some retail. They remain active on multifamily, industrial, and well-performing retail with strong tenants.
- Debt funds and bridge lenders are active across all property types and have more flexible underwriting — at higher rates.
- Insurance companies (life cos) are selectively active on stabilized, income-producing properties over $3M. Excellent rates for qualifying deals.
- CMBS is back for deals $5M+ with strong cash flow and long-term leases.
The right lender for your deal depends on your property type, location, LTV, and timeline. A competitive bid process that reaches all of these categories simultaneously gives you the full picture.
Step 4: Give Yourself Enough Lead Time
Here’s a realistic timeline for each path:
| Financing Type | Time to Close |
|---|---|
| Bridge loan (fast close) | 3–6 weeks |
| Non-bank permanent | 45–75 days |
| Conventional bank | 60–90 days |
| Life company / insurance | 90–120 days |
| CMBS | 90–120 days |
The rule of thumb: Start the process no later than 6 months before your maturity date. If you’re within 90 days, focus exclusively on bridge lenders who can close fast, then refinance into permanent financing once the pressure is off.
Step 5: Run a Competitive Process — Not a Sequential One
Most property owners approach lenders sequentially: call one, wait, get declined or a bad quote, call another, repeat. This takes months and gives you no leverage.
A competitive process means submitting your deal to multiple lenders simultaneously, letting them know they’re competing, and collecting offers within the same window. This approach consistently produces better rates, better terms, and faster closes — because lenders know they have to compete to win the deal.
Frequently Asked Questions
What happens if I can’t pay my commercial balloon payment?
If you can’t pay the balloon and can’t refinance, you’re facing default — which can lead to foreclosure. The key is to start the refinance process early enough that you have options. Even if your current bank won’t renew, there are lenders who will. The worst outcome is waiting too long to find out.
Can I refinance a commercial loan with a balloon payment due soon?
Yes. Lenders refinance maturing commercial loans regularly — it’s a normal part of the market. If your balloon is less than 60 days out, you’ll want to focus on bridge lenders who can close quickly.
What if my property value has dropped since I got the original loan?
This creates an LTV challenge — you may owe more than a conventional lender will finance at current values. Bridge lenders and debt funds typically have more flexibility here, especially if your income (NOI) is strong.
Use our free commercial balloon payment calculator to see exactly how much you’ll owe at maturity based on your loan terms.
How RefiLoop Helps
RefiLoop runs the competitive bid process on your behalf. We submit your deal to our 7,000+ lender network — banks, bridge lenders, debt funds, insurance companies — and return 3–5 real offers within 48 hours.
No upfront fees. No commitment required to see your options. We’re paid only when you close a loan that works.
If your balloon is coming due in the next 18 months, the best time to start is now — when you still have leverage.
Related Resources
- My Bank Won’t Renew My Commercial Loan
- Commercial Bridge Loans: How Fast Can You Close?
- Commercial Loan Maturity Default: What Happens Next?
State-Specific Refinancing Guides
Refinancing requirements and lender market conditions vary by state. Browse our state-specific guides:
- Texas Commercial Mortgage Refinance
- Florida Commercial Mortgage Refinance
- Georgia Commercial Mortgage Refinance
- North Carolina Commercial Mortgage Refinance
- Ohio Commercial Mortgage Refinance
Complete guide: Commercial Balloon Loans — Everything Property Owners Need to Know →
Property Types We Finance
RefiLoop sources refinance options across all major commercial property types. Find lender options specific to your asset class:
- Multifamily balloon loan refinance
- Retail strip center refinance lenders
- Industrial property commercial refinance
- Mixed-use building refinance
- Self-storage facility refinance
- Office building commercial refinance
About David Greenbaum
David Greenbaum is a commercial mortgage broker and co-founder of RefiLoop. He specializes in helping commercial property owners refinance maturing loans between $200K and $15M across Texas, Florida, Georgia, North Carolina, Ohio, and other priority markets. With hands-on experience in commercial bridge loans, debt fund financing, and conventional CRE refinancing, David helps borrowers find the right capital source for their situation — not just the easiest one.