One of the most important steps towards making your dream a reality as an entrepreneur is finding a premises in order to create a base for your product or service. Needless to say, this is easier said than done in most cases, especially if you’re relying on getting the ball rolling after setting up the business. Fortunately, there are a few things you can do to finance your important commercial real estate purchase.
Small business association loans are perfect for getting the commercial real estate of your dreams. This loan comes either entirely from the government or from a combined bank and government endeavor. These loans have a huge array of benefits, including small down payments, fixed interest rates and a wide selection available. There are, however, very strict regulations regarding who can qualify for this loan, making it impractical for some startup entrepreneurs.
This is, of course, the most traditional means of funding a real estate purchase or the purchase of any other expensive asset for business owners everywhere. While finding banks that still offer these types of loans can be a challenge, there are certain benefits you can expect when you find one that does. Typically, you’ll only need to have a ten percent down payment ready, and terms are not only fair but typically predicable on a month to month basis.
In this arrangement, the seller sells the real estate in question directly to the buyer instead of working through banks or other methods. When this occurs, there’s a good chance that the seller will be able to present interest rates and down payment amounts far lower than those you find with a bank or other lending institution. However, this method is growing more uncommon by the day, and may be difficult to find.
Like seller financing, third party financing is a way of funding your purchase that comes with fewer risks than traditional loans. If you choose this method, you’ll borrow the funds you need for your purchase from a close friend or family member. In return, they get the property in question as a source of collateral.
If you have the funds, it may be very beneficial to simply outright buy the property with cash as an individual. Then your business can occupy the space, and pay rent on a monthly basis. This gives you more freedom as far as building management goes, and ensures money goes back into your pocket.
These five approaches are all legitimate ways of purchasing your first commercial real estate lot and getting your business on the fast track towards becoming a household name.