Throughout the life cycle of the enterprise, every small business owner will face the following decisions: where to open a physical location, whether to stay in that location for a long time, and whether to own the building to make improvements and How to raise funds for them.

For small business owners, investing in real estate (whether buying new assets or reinvesting the property they own) can help increase the overall value of the business and control costs.

One option for this purpose is a commercial real estate loan occupied by the owner. These types of corporate loans can help secure the purchase of buildings, refinance existing commercial properties, or finance improvements to your existing properties.

Here are some considerations to determine if the owner-occupied commercial real estate loan is suitable for your small business.

Occupation requirements

To qualify for an owner-occupied loan, your business must occupy at least 51% of the building area, or at least 51% of the space when the new property is closed and moved in.

Positive impact on business tax

With a loan for the owner’s own use, you can deduct the annual interest paid for the loan and other expenses related to owning the property, which is a great advantage for you to rent out space for a small business.

Property renovation

If you already own your own corporate building, but need to be renovated, such as expanding or reusing the existing space, the loan occupied by the owner can be used to finance the project at a fixed interest rate and fixed cost.

Building assets

If the value of your building appreciates over time, owning commercial property can also help build the asset, adding more value and financial flexibility to your business.

New source of income

If your assets are large enough (and your business maintains at least a 51% occupancy rate), you can lease the remaining space in the building to other businesses, thereby providing new and stable cash flow for your business.

This includes mixed-use properties, where the total space can be used for commercial and residential purposes. Your business still needs to use at least 51% of the space, but renting out unused space to residential users may be another good source of income.

If you want to develop the future of your business through increased cash flow, more cost certainty, and flexible use of equity and assets, you can choose a self-use commercial real estate loan that talks to the owner commercial Bank partner.

Besides, shouldn’t your company have a good home?

About the author – Anthony Ryan

Anthony Ryan Senior Vice President of WSFS Bank, Director of Small Business Loan. He joined WSFS in 2011 and brings 30 years of retail and small business banking experience. In WSFS, Anthony served as the small business relationship manager and team leader, and later as the director of small business loans.Anthony can be reached at the following locations [email protected].