SBA 504 Loan Helps Family-Owned Small Business Buy Property, Embrace Growth and New Job Creation
‘Great opportunity’ – SBA loan makes HQ asset, not expense
Are you familiar with our #BizTipSixty Video Series, featuring lessons from entrepreneurs in 60 seconds? Read below for the key takeaways from Waterstone Faucets about buying a real estate asset. Follow #BizTipSixty on our YouTube Channel.
One of the keys to the American dream is home ownership. It’s much the same for small business owners. Owning a real estate asset often beats leasing, and it’s a benefit not only for the bottom line but for owners’ future prospects.
Why? Chris Kuran, owner and founder of Waterstone Faucets, explains the upside to owning commercial real estate.
“It’s an investment process, look at it that way,” he said.
Chris worked with CDC Small Business Finance to obtain an SBA 504 loan for his business, which opened in 1999.
After establishing Waterstone as a designer of parts and components for filtration companies, Chris noted that clients continued to ask him to look at making decorative faucets with custom finishes. By 2005, he’d completed the shift. As a result, his business has become a leading provider of high-end kitchen faucets across the nation.
Big savings with SBA 504 loans
Chris had been leasing space for Waterstone until 2014, when he worked with CDC Small Business Finance’s Merri Adams, a senior loan officer, to buy a 42,000 square-foot building to house Waterstone’s entire operation.
The results have thrilled him, from the monthly savings to the long-term investment possibilities.
“It’s probably one of the best decisions you can make as an entrepreneur or a businessman. You want to be able to do that,” he said.
From expense to asset
Let Chris break it down:
“One of the benefits of being able to have the opportunity to buy your own building is that it changes the dynamic for the money that you’re actually investing. You look at rent as an expense, but as an owner you look at the building as an asset …
It’s not only the smartest thing to do from an investment standpoint, but it actually is less for your cash flow. When we made the move into buying our own building, the cash required to rent the building was actually more than the cash required to pay the mortgage.
So from a cash standpoint, if you can get into a 504 and buy your own building, (it’s a) great opportunity, because now you’re investing in your own asset and that’s where you want to be. That’s what you want to do, because that asset, aside from your business, will continue to appreciate and do really well for you. And it’s no longer dragging cash.”
See the advantages of an SBA 504 loanIn case you missed it:
- 3 reasons small businesses should buy a building
- 5 key differences between SBA 504 vs. a conventional real estate loan
CDC Small Business Finance is the leading SBA 504 lender in the nation and a trusted, award-winning nonprofit. We’re committed to your long-term business success by offering long-term, fixed-rate financing for your building, major equipment or land purchases. Tell our loan experts about your business, and they’ll work to match you with a financing plan that best suits you. Let’s talk! Reach us at loaninfo@cdcloans.com or (619) 243-8667.
