Question: I’m thinking of purchasing the commercial property I currently lease. What should I consider to ensure it’s the right decision for my business?
Answer: While there are nuances in each business’ financial situation that may impact the choice to lease or purchase, every business should consider certain factors. First, you need to be confident in your projections so you have a clear understanding of your financial picture. If you plan to be in your location for several years, purchasing may be the right choice. Typically, the longer you stay, the more economical it is to buy. So, if you may outgrow the location soon, leasing may be better. Also consider up-front costs including mortgage payments, a down payment and collateral. And, factor in property maintenance costs. You may want consider a Small Business Administration (SBA) loan. Guaranteed by the U.S. government, SBA loans usually require lower down payments and offer lower interest rates. Go to https://www.sba.gov/loanprograms to learn more. In addition, a financial services advisor whom you trust who understands your business and long-term vision, can provide helpful advice.
CEO, Beneficial Bank