For small businesses, securing financing can be a challenge. From managing cash flow to covering unexpected expenses, there are a variety of financial needs that small businesses must address. One of the most significant investments for many small businesses is commercial real estate. Purchasing or leasing commercial property can be a game-changer for small businesses, providing stability, security, and long-term growth potential. However, financing commercial real estate can be a daunting task, and many small business owners may feel unsure about where to start. In this blog post, we’ll explore the benefits of commercial real estate financing for small businesses and how it can help your business achieve its goals.
Stability and Security
One of the most significant benefits of owning commercial real estate is the stability and security it provides. For small business owners, owning a property rather than leasing provides long-term financial stability. When you own your property, you don’t have to worry about rent increases, lease expirations, or finding a new space to rent. Additionally, owning your property can provide an added layer of security, as it can be used as collateral for future loans or financing.
Building Equity
When you own a commercial property, you’re building equity in an asset that can appreciate over time. This can be a valuable investment for small business owners, as it can provide a source of future capital if needed. For example, if you need additional financing for your business in the future, you may be able to borrow against the equity you’ve built in your property.
Tax Benefits
Owning a commercial property can also provide significant tax benefits for small businesses. The interest you pay on your commercial real estate loan is tax-deductible, as are property taxes and other expenses associated with owning a property. Additionally, you may be eligible for depreciation deductions, which can reduce your tax liability and provide additional savings for your business.
Customization and Control
When you own your commercial property, you have more control over how it’s used and how it’s customized to meet your business needs. You can make changes to the property to better suit your business operations, such as adding storage space or updating the electrical system. Additionally, you can customize the property to better reflect your brand and create a more welcoming environment for your customers.
Long-Term Savings
While purchasing commercial real estate may require a significant upfront investment, it can provide long-term savings for your business. When you own your property, you’re not subject to rent increases or market fluctuations, which can help you better plan for the future. Additionally, owning your property can provide cost savings over time, as you won’t be subject to landlord markups or fees associated with leasing.
How to Secure Commercial Real Estate Financing for Your Small Business
While the benefits of commercial real estate financing are clear, securing financing can be a challenge for small businesses. Here are some steps you can take to increase your chances of securing the financing you need:
Build Strong Credit
Lenders will look at your credit score and credit history when determining whether to approve your loan. Building strong credit can increase your chances of securing financing and may even result in more favorable loan terms.
Create a Business Plan
Having a strong business plan can demonstrate to lenders that you’re a low-risk borrower. Your business plan should outline your goals, projections, and financials, and provide a clear roadmap for how you plan to use the financing you’re seeking.
Shop Around
Don’t settle for the first lender you come across. Shop around and compare rates and terms from different lenders to find the best financing option for your business.
Consider SBA Loans
The Small Business Administration (SBA) offers a variety of loan programs specifically designed for small businesses, including those looking to purchase or refinance commercial real estate. SBA loans can offer more flexible terms and lower down payment requirements than traditional commercial real estate loans, making them an attractive option for small business owners.
Work with a Commercial Finance Broker
Navigating the complex world of commercial real estate financing can be a challenge for small business owners. Working with a commercial finance broker can help simplify the process and increase your chances of securing the financing you need. A broker can help you identify the right financing options for your business, connect you with lenders, and guide you through the application process.
At 21 Capital, we specialize in commercial finance brokerage services, including commercial real estate financing, small business loans, equipment financing, and more. Our team of experienced professionals understands the unique needs of small businesses and can help you navigate the complex world of commercial financing. We offer personalized service, competitive rates, and fast approvals, making it easy for you to get the financing you need to grow your business.
If you’re interested in learning more about commercial real estate financing or any of our other financing solutions, please don’t hesitate to reach out. You can contact us at (614) 537-3802 or email us at patgrove@reagan.com. We look forward to working with you and helping your business achieve its goals.
