Regardless of what you think of our government currently, you have to love a program that gives a business owner a leg up in owning their own commercial property. The value of many of the most successful businesses is not the worth of the business itself, but the real estate it is built on, or owns.
Per an article on McDonalds from Seeking Alpha: “Most people don’t realize it, but McDonald’s (MCD) is not a burger-flipping restaurant chain; it is one of the world’s best real estate portfolios. Franchisees flip the burgers. McDonald’s simply owns the best commercial property all over the world.”
So if you’re a business owner, and want to have your business worth more when you go to execute your exit strategy, read on.
Here are both a brief summary and the benefits of the SBA 504 program, as well as your next step.
The Small Business Administration provides this loan program opportunity to:
Anyone who qualifies as:
- A for-profit business
- That has a tangible net worth BELOW $7.5 million
- Its average net income DOES NOT EXCEED $2.5 million after taxes for the preceding two years.
- A business that can or does occupy at least 51% of the property or 60% of constructed building
Benefits:
- Low down payment — 10% (CAN be as low as 5% in special circumstances)
- Low, fixed interest rate currently around 5.520% as of this writing vs. bank rate of 6 or 6.5%
- 20 year term — no balloon payments
- Loan fees and soft costs can be financed
What can it be used for?:
- Can be used to buy buildings — including renovation costs
- Can be used to buy land and construct buildings
- Can be used to modernize, renovate or convert existing facilities
- Can be used to buy equipment
Sure, it sounds good, but really, can it really make that big a difference to my bottom line, or make moving worth the hassle? YES! Look at our LEASE vs. BUY case study below. You’ll see that given this example, you could actually SAVE around 50% on your yearly lease costs — AND OWN a piece of real estate in the process. CLICK HERE to see the financials!
Sure it looks easy, but if you go look at all the paperwork at sba.gov, it makes your head swim. Don’t go there, go here: we have a team that includes: SBA loan officers, paired up with our real estate team (who have years of small business experience too, by the way), to bring all this together for you, so you don’t waste your time trying to become an SBA or commercial real estate expert. We work for you, to acquire a real estate investment — just like we would for ourselves. So what’s your next step?? Call Peter 770.356.5506, email him at peter@petertennis.net, or see us on the net at www.petertennis.net.
1http://seekingalpha.com/article/73533-mcdonalds-is-a-real-estate-company
P.S. – If you know a small business owner, please, do them a favor and share this with them.
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