Reinvest in Your Small Business with Real Estate
running-a-business | Read Time: 3 minutes
By Anthony Ryan | Published: January 2022
One of the most important aspects in running a small business is to constantly embrace change. From consumer or client behaviors, wants and needs to vendor or supplier management, staying on top of changes that affect your business is critical.
However, a key constant that all small business owners and operators must embrace is reinvesting in the business. There are several ways to put resources back into a business, but one option that should not be overlooked is real estate.
Purchasing real estate can fortify your business in many ways, from providing a permanent home to becoming an everyday revenue generator.
Here are a few ways reinvesting in your business through real estate can increase profitability and strengthen your finances.
Establishes Cost Certainty
By purchasing property for your business, you can control costs better by not having to deal with rising lease costs. Purchasing your own property with a commercial real estate loan for small businesses provides cost certainty with fixed terms, rates and fees including appraisal and most closing costs and bank costs.
Also called an owner-occupied commercial real estate loans, this lending option helps secure financing for the acquisition of a building, the refinancing of an existing commercial property, or for making improvements to your existing property.
Owning your business’ property can also reap revenue-generating benefits, such as leasing part of the space to another business or if it includes mixed use space, having a residential tenant. Both options can provide consistent revenue that can be reinvested into your business, help pay for the mortgage, and more.
Just make sure your business uses at least 51% of the space.
Already Own the Property? Reinvest Through Refinancing
If you already own your small business’ home, refinancing your loan can be a great way to put cash back into your pipeline. Whether you use the savings to build reserves or use a cash out refinance to expand the business or renovate your space, looking for ways to make your business’ finances work for you is always a good idea.
Much like residential real estate, commercial real estate has extra incentives for property owners, such as building equity. If your business’ property gains value over time as you are paying down the mortgage, that equity can be used in several ways to increase the financial strength of your business.
Owning the property also adds long term value to your business, which can also help if you reach a point where you are weighing whether it is time to grow or sell your business.
Finally, if your property is financed you may be able to deduct the annual interest paid on the loan and other expenses associated with owning the property, an excellent advantage over leasing space for your small business.
About the Author – Anthony Ryan
Anthony Ryan is Senior Vice President, Director of Small Business Lending for WSFS Bank. He joined WSFS in 2011, bringing with him 30 years of Retail and Small Business Banking experience.
Reflect on the Challenges of This Year to Prepare Your Small Business for Success in 2022
As 2021 comes to a close and we reflect on all of its successes and challenges, it is also a great time to look ahead to 2022’s opportunities for the small business community and how your business can be successful in the new year and beyond.Read More
WSFS Bank Loves Small Businesses Holiday Program Honors Four Local Businesses That Go Above and Beyond for Their Communities
For thousands of small businesses throughout the Greater Philadelphia and Delaware region, the past two years have seen ups, downs and everything in between. Despite these challenges, many of these businesses, their leaders and their employees didn’t lose sight of their ability to positively impact their communities.Read More
WSFS Bank’s SBA Team Helps Small Businesses Get the Funding They Need, Earns Recognition for 2021 Loan Volume
The U.S. Small Business Administration (SBA) recently released their regional and national fiscal year 2021 rankings, and WSFS Bank continues to shine supporting small businesses! In Delaware, the team led all lenders with $12.6 million in loans and was second in the state in loan originations, while placing third in New Jersey for dollar amount and loans originated.Read More
Key Steps to Position Your Business to Get the Long-Term Credit and Loans it Needs
Whether you are an entrepreneur at the helm of a startup or a seasoned small business owner looking to expand, the importance of good business credit cannot be understated. From equipment finance to real estate loans and credit lines for operating expenses, at some point your business will most likely need to borrow money from a business lender.Read More
Top Things to Consider When You Need an Equipment Finance Partner
The right finance partner can make a huge difference in the structure, operations, and growth of your company. This relationship can be the difference between growing your business and remaining stagnant; winning new business and losing potential customers to a competitor; or even loyal employees leaving and high turnover rates. So why do so many equipment sellers settle for less than top-tier equipment finance partners?Read More