SBA 504 Loan Helps Family-Owned Small Business Buy Property, Embrace Growth and New Job Creation
Top 3 Reasons Small Businesses Should Buy a Building
Are you familiar with CDC’s #LoanTipSixty Video Series, where experts from CDC share insights in just 60 seconds? Read below for the key takeaways from our #LoanTipSixty: Top 3 Reasons to Buy a Building video or watch the video here. Follow the series on CDC’s YouTube Channel.
Small business owners who are tired of paying rent for their business or have an upcoming lease renewal, often look to buy a building. Purchasing a building can often be good for the bottomline when compared to leasing. Many small business owners get financing to buy a building with the help of an SBA 504 loan.
As the leading SBA 504 commercial real estate lender in the country, we’ve had the opportunity to work with numerous small business owners when they faced the question – should I continue leasing or should I buy a building? There are many reasons to shift to building ownership instead of renting. After hearing back from business owners who decided to purchase a building – here are the top three reasons to consider:
TOP 3 BENEFITS: BUY A BUILDING
#1. BUILD EQUITY
When you own your building every payment you make generates wealth. That provides future borrowing power for business growth. It can often also create resources for when it’s time for retirement.
#2. CERTAINTY OF OCCUPANCY COSTS
When you lease, the landlord controls the rent and can also sell the building which could cause disruption to your business. When you own the building, you know the mortgage payment and you control the property. This allows you to better plan your future.
#3. PRESERVE CASH
The cash you put into the building today works for you. Did you know that most lease payments are greater than the mortgage payment for an SBA 504 loan? If you use the 504 loan it’s only 10% down and you can then finance up to 90% of the cost. The savings can be used for things to help business growth, such as buying inventory, hiring new employees, equipment financing, or investment in new improvement strategies.
Hear from an SBA 504 borrower on Building Ownership:
SBA 504 DETAILS
With the recent reduction in interest rates (October, 2024),now is a great time to learn more about the SBA 504 loan and how it can fit into your business strategy.
- Only 10% down payment by the small business owner
- No additional collateral required to be pledged
- Below market fixed interest rate fully amortized
- Use of funds: new acquisition or conventional refinance of owner user property
- SBA 504 vs. 7a comparison
Want to learn more about how you can get an SBA 504 loan to buy commercial real estate? Connect with one of our loan experts. Email us at loaninfo@cdcloans.com or give us a call at (619) 243-8667.
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