If you run a small business and want to purchase real estate, it is vital to thoroughly pore over your options if you need to take out a loan. From opening up, your first brick-and-mortar location to expanding, buying commercial real estate can help you take your firm to the next level.
In addition to going over your choices with respect to financing, you should also review some of the factors that lenders take into consideration when determining how to structure a loan (such as interest, the loan term, etc.).
Your ability to repay a real estate loan
According to the Federal Deposit Insurance Corporation (FDIC), a majority of small business owners use cash flow from their operations to repay loans. The FDIC also notes that many small business owners use their personal resources to support a loan request. Lenders look at various factors when trying to gauge a borrower’s ability and willingness to repay the loan, such as their credit history and anticipated cash flows.
Staying current on your real estate loan
It is vital to ensure that you remain current on your real estate loan. Small business owners face many challenges and sometimes struggle to make payments on time. If you face financial hardships, you could benefit from looking into refinancing.
Falling behind on a loan could jeopardize your ability to stay in business and create additional stressors. Whether you are facing uncertainty regarding taking out a loan, refinancing or any other financial issues related to commercial real estate, make sure you take steps to safeguard the future of your business.