4 Options That Would Help You Purchase Commercial Property

You have some wonderful plans for starting or expanding a business and they involve finding the right place to set up shop. The question now is what approach you will use to obtain financing for commercial real estate that has all the features you desire. There are more financing options out there than most people realize. Here are four suggestions that you can consider.

Leveraging Your Own Assets

You could go the self-financing route if you have some assets. For example, you could take out a second mortgage to cover the purchase of the commercial building. If there are some assets that you could liquidate, it’s possible to buy the building now and gradually replace those assets as the business grows.

The thing about self-financing is that you could end up losing something that you need, like the home you live in. This solution can and does work for some people; make sure it will work for you before going this route.

Seeking an Angel Investor

Another solution is to try obtaining the money from an individual. Angel investors who are convinced that your business volume will allow you to repay the debt within a reasonable amount of time might be interested in providing the financing that you need. While there are plenty of pros and cons of a private mortgage that you need to consider, this arrangement can work quite well.

If you decide to seek an angel investor, make sure there are clearly defined roles that each of you will play. That includes how much influence the investor has in the operation of the business, the schedule for repayment, and the rate of interest that applies to the balance. As long as both parties are willing to abide by the terms and conditions, this can end up being a profitable deal for everyone involved.

Opting for a Business Mortgage From a Bank

If your credit is great and you have experience in managing this type of business operation, there’s always the chance that you can secure a business mortgage from a traditional bank. Shop around and see what sort of deal you can receive. In the best-case scenario, you’ll enjoy rates that are at or near the current average, payments that will be easy to make, and no penalties for retiring the debt early.

Working With Alternative Lenders

If the banks aren’t interested and there doesn’t seem to be an angel investor who will work with you, don’t assume there’s nothing more to be done. Turn your attention to alternative lenders who are willing to consider your application. Lenders of this type tend to have less stringent requirements that traditional lenders and often place more emphasis on business volume and the current aging of your business accounts. This is an option you may want to consider if your credit is mediocre or has sustained a hit or two in the last few years.

Remember that not every financing option is right for every situation. It’s up to you to determine what will allow you to secure the business property needed to move the operation forward. Take your time, explore all of your options, then go for the one that seems to be the best fit. In less time than you thought possible, you could be working out of that newly-acquired building and getting ready to do great things.