Opportunity Knocks in Commercial Real Estate

As published in the Lowell Sun
By Laura Fraser

A bank will also look at the capitalization or equity position of a business and its leverage, or how much debt it has outstanding. This includes accrued obligations, vendor debt and financed debt. In addition, the credit standing and personal financial strength of the owner or guarantor is considered.

For businesses that are relocating to a new property, owners need to determine moving expenses. Depending on the type of business, moving costs can be quite expensive; for example, manufacturers with heavy equipment can face costly rigging expense.

Parking is another factor. Will there be sufficient parking for the staff and customers? Is the new building move-in ready or will it require renovation? If the property needs to be renovated, what are the costs? Who will handle improvements? For larger projects, the bank will most likely require an experienced contractor.

The U.S. Small Business Administration has a number of programs and is another resource to a business that may not meet all of the criteria listed above. There are also a number of tax-exempt financing programs available through Mass Development for medium-sized businesses.

Owning commercial real estate has many benefits. It allows a business to plan for its future growth while reaping federal and state tax benefits, and the real estate has the potential to appreciate.

With positive changes in the commercial real-estate market on the horizon, now may be the time to take the next step.

Laura Fraser is a vice president of commercial lending at Enterprise Bank in Lowell. She is a graduate of Southern New Hampshire University. She can be reached at 978-656-5766 or via e-mail at laura.fraser@ebtc.com

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