Before you renew the lease on your building this year, you should consider the many benefits of owning your business property. Ownership provides financial advantages that leasing cannot, while offering control and long-term consistency. Through the 504 Loan Program, you can secure a mortgage with monthly payments that are often lower than your current rental amount, as well as a low down payment.
Community Business Finance recently helped a client in Louisiana purchase property with a 504 Loan. The commercial janitorial service was unfamiliar with the 504 Loan Program, however the proceeds enabled the owners to buy the building that they had been leasing for many years. With a 504 Loan, they were able to put only 10% down and are very happy with a 20-year fixed rate mortgage on the SBA's portion of the loan.
While it might seem easier to renew the lease on your building, you should consider the many advantages of owning your business property. Even though there are costs associated with moving to a new location, property ownership can have a significant positive impact on your business. With the 504 Loan Program, owning provides financial advantages that leasing cannot, while offering control and long-term consistency.
The "Emerging Trends in Real Estate 2015" report from the Urban Land Institute and PricewaterhouseCoopers ranked Houston as the country's #1 market to watch in 2015. Houston moved up from #2 last year and #5 in 2013. "You have an economic boom, you have job creation, and when you have job creation, you have demand for everything real estate," said Mitch Roschelle, U.S. real estate advisory practice leader at PwC. In fact, global investors consider Houston "the perfect storm for commercial real estate."
At Community Business Finance we understand that no two businesses are exactly alike. However, it may surprise you to learn that sometimes two unique companies can achieve different business goals with the same solution. We recently helped two clients realize their individual dreams through property ownership.
Rising Interest Rates and the 504 Loan Program
After years of historic lows, interest rates are finally on the rise. Chairman of the Federal Reserve Board Ben Bernanke has said that the Federal Reserve would begin to taper their bond-buying stimulus program this year. The central bank launched the program in 2008 to help lower long-term interest rates and stimulate economic activity.
Before renewing the lease on your office space, have you considered the advantages of owning your business property? It can have a significant impact on your business. There are many benefits to owning office space. Owning offers control, consistency, and financial advantages that leasing cannot provide.