Refinance Or Sell? Which option is right for you?

by Jasmine Keeble, Solicitor, Bright Solicitors’ Commercial Property Team

When looking to unlock value from a commercial property, one of the biggest decisions is whether to refinance or sell. Both options can release funds, but they achieve very different outcomes. 

Refinancing: Release Equity While Keeping the Property 

Refinancing allows you to borrow against the value built up in your property. This can release capital for business growth, property improvements, debt consolidation or future investments, while allowing you to retain ownership of the asset. 

For many owners, refinancing can be an attractive option where the property is generating rental income or has long-term growth potential. It may also allow you to benefit from increases in property value without having to dispose of the asset. 

However, refinancing will increase borrowing commitments and lenders will assess factors such as the property’s value, income and your ability to meet repayments. 

Selling: Access the Full Value of the Property 

Selling provides access to the property’s equity without taking on additional borrowing. This can be a suitable option where funds are needed for a new venture, succession planning or where the property no longer fits your long-term objectives. 

A sale can also remove ongoing ownership responsibilities, such as maintenance costs and property management obligations. 

The downside is that once the property is sold, any future capital growth and rental income will be lost. 

Which Option Is Best? 

The right choice will depend on your circumstances, financial objectives and long-term plans for the property. 

If you want to release funds while retaining ownership, refinancing may be worth considering. If you are looking to realise the full value of the asset and move on from ownership, a sale may be the better option. 

Seeking professional advice early can help you understand the financial and legal implications of each route and make an informed decision. 

How Bright Solicitors Can Help 

Thinking about selling or refinancing your commercial premises? Our Commercial Property team are experienced in dealing with both options, and can provide clear, practical advice and assistance throughout the selling and refinancing processes.