Commercial Real Estate Loans: From Start Up To Small Business

Is it time to expand your growing business? Then, let’s go over all things commercial.

By now you know the benefits of starting your company can be two-fold—you get to be your own boss and you are following your dreams. Well, the good news is if you are in the market for commercial real estate loans than chances are you are doing something right.  Generally,  the first thing you need to know about commercial real estate loans is  whether or not you are in the market for owner-occupied loan options or investment property loans.

Owner-occupied loan options typically refers to a loan for a commercial building that will have more than 51% of the space occupied by the owner (hint: since you are making the transition from startup to small business, owner-occupied loan options will often help keep the cost low due to the additional tenants). An investment property loan for a commercial building, multi-unit store front or office complex, on the other hand, can be used to buy or refinance. This particular type of commercial loan generally has higher rates and a balloon payment that tends to be due sooner rather than later. But, nevertheless, an investment loan is just that an investment. In other words, you would typically consider this loan option if you were not interested in occupying the property.

Generally, when making the transition from startup to small business, as previously mentioned, it is all about the owner-occupied loan options. Thus, with that being said, the next step in all things commercial is deciding if the benefits outweigh the costs (literally).

The Benefits of Owning Your Business Location

If you have already done a little bit of research then you are more than likely aware of the numerous benefits of owning commercial real estate such as the lucrative tax advantages, asset appreciation, leverage, high cash yield and of course a clear indication of overhead costs i.e. your business is essentially rent controlled. These benefits are even more lucrative for a startup or small business as owning your business location will allow you to create capital for a variety of business expenses as well as foster an image of progression and durability in your brand. The best way to purchase commercial space is with commercial real estate loans.

Of course, that’s not to say there are no disadvantages to owning your business location, especially when you are first starting out. Remember, commercial loans involve additional costs and fees, title work, appraisals as well as full documentation. In fact, many startups and small businesses simply may not be ready to take own the financial responsibility (various fees, depreciation, borrowing capacity, etc.) or the property management and maintenance that comes with commercial ownership. Consequently, it is always in your best interest to weight the pros and cons before you make your next venture.

If you are ready to take the next step with commercial real estate loans, call our office today!

Well if you decide commercial real estate loans are right for you. Then your next step is to reach out people that know the business. This means working with a real estate company that can not only meet your needs but one that ultimately understands your needs. 

Dennis Dahlberg Broker/RI/CEO/MLO

Level 4 Funding LLC
Arizona Tel:  (623) 582-4444 
Texas Tel:      (512) 516-1177 
Dennis@level4funding.com
www.Level4Funding.com

NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027

111 Congress Ave |Austin | Texas | 78701    

   

About the author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true.

Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.