If your small business isn’t directly involved in buying or selling homes, you may think that you won’t have to worry about real estate. In reality, however, practically every business will have at least some real estate concerns that it needs to consider. When you , you can get answers to questions unique to your business. However, understanding a few basic principles in advance will help you be better prepared to address your company’s needs.
Local zoning laws can have a huge impact on your small business — especially if you plan on operating out of a home office! Depending on the nature of your work, you will only be able to rent or purchase property for your company in a commercially-zoned area.
While exceptions do exist for certain home-based businesses, most municipalities aren’t going to allow you to do this if you plan on keeping inventory in your home or having employees coming and going throughout the day. Being aware of local zoning regulations will keep you from making an erroneous purchase or getting fined.
For many small businesses, renting an office space seems to be the most effective solution. However, ensuring a positive rental experience requires more than trying to negotiate a lower monthly rate. You should read the entire lease agreement, making sure that you fully understand the terminology.
Pay close attention to common financial concerns like capital expenditures and common area maintenance. Typically, renters will be financially responsible for a set percentage of these costs based on how much of the building they rent. Read this section carefully to make sure you aren’t paying for high administrative fees or expenses that would place an excessive burden on your business.
When buying a property for commercial use, it is essential that you understand your financing options. Bank loans are not always easy to secure due to the perceived risk associated with lending to a relatively new company. However, business owners in Canada have access to the Small Business Financing Program made available through the government.
This program is specifically designed to help business owners with the purchase of land or property. Business owners can obtain loans of up to $1 million through this program. As with any other financing agreement, you will need to make sure you have room in your budget to pay your loan obligation each month until the amount is paid in full. Because of this, higher-risk businesses are often better served by renting instead of buying.