Competitive commercial business loan rates make now the ideal time to secure real estate, investment property, or equipment to expand your operations and build wealth. This article explores how to take advantage of this opportunity by detailing the benefits and considerations of owning versus renting commercial property. We also delve into the advantages of using commercial business loans for real estate investment and equipment acquisition compared to using less favorable unsecured financing options.
To learn ways to get extra support to build your business, read our related article about funding your business here.
Ownership vs. Renting: A Critical Look
For a successful, growing business currently operating in a leased building, the dream of ownership is within reach. To own your current space or purchase a larger facility, now is the ideal time to take action. Before proceeding, it’s essential to analyze the financial and operational advantages of owning versus renting to determine the most strategic path forward.
The Power of Owning: Benefits
| Advantage | Key Impact |
| Build Equity | Loan payments grow your business’s net worth as they build equity in a tangible asset, unlike rent, which offers no return. This equity can be used for future expansion. |
| Predictable Costs | A fixed-rate commercial mortgage locks in your primary occupancy cost, guarding against unpredictable rent increases and simplifying long-term financial planning. |
| Full Control | Ownership grants you the freedom to renovate, expand, or customize the space instantly without needing landlord approval, supporting rapid business changes. |
| Potential Income | If your property has extra space, leasing it to other tenants can create an additional revenue stream, effectively lowering your own operating costs. |
The Challenges of Owning: Considerations
| Challenge | Key Impact |
| High Upfront Cost | Commercial business loans typically require a large down payment (often 20-30%), which can strain cash flow for other operational needs. |
| Responsibility for Maintenance | You are financially responsible for all repairs, maintenance, and capital improvements (like roofs or HVAC), requiring careful budgeting and reserve funds. |
| Reduced Flexibility | Selling a commercial property can take months or years, limiting your ability to quickly relocate if your business needs to change or the local economy shifts. |
| Management Demands | Managing a property requires time and expertise—from coordinating repairs to handling tenant issues—which can distract from your core business operations. |
Commercial Business Lending for Real Estate Investments
Beyond simply housing your business, using a commercial loan to acquire investment real estate is a powerful strategy for diversifying your portfolio and generating passive income. Consider these two strategies and their advantages:
Investment Property Advantages
- Strong Cash Flow: Commercial properties often provide higher annual rental yields (e.g., 6-12%) than residential ones.
- Stable Leases: Longer lease terms (3-10 years) offer stable, predictable income.
- Triple Net Leases (NNN): Many commercial leases require the tenant to pay for property taxes, insurance, and maintenance costs in addition to rent, making the investment more passive.
- Tax Benefits: Investors can benefit from depreciation deductions, mortgage interest deductions, and potential 1031 exchanges (deferring capital gains taxes when upgrading properties).
The Hybrid Approach: Owner-User Investment
A highly strategic move is purchasing a property larger than your immediate need, occupying part of it, and leasing the rest. This approach maximizes the benefit of your commercial business loan by:
- Reducing your own occupancy costs using rental income.
- Creating immediate cash flow diversification.
- Building community by supporting other local businesses as tenants.
Building Generational Wealth
For forward-thinking business owners, commercial real estate acquired with a commercial business loan is a powerful path to generational wealth. Unlike business equity, which can be hard to liquidate, commercial real estate provides the following advantages:
- Tangible Assets: Property that can be easily valued and passed down to heirs.
- Ongoing Income: Rental streams that continue beyond your active working years.
- Inflation Hedge: Protection from inflation through property appreciation and rent increases.
Commercial Business Loans for Equipment
The most direct and popular way for small businesses to fund essential machinery and tools is through Commercial Business loans. Loans are accessible because the equipment itself serves as collateral, making it easier for businesses to qualify.
The lender provides a lump sum for the purchase, granting the business immediate ownership. The borrower then repays the principal and interest over a fixed term. The equipment acts as the security, meaning that if a borrower defaults, the lender has the right to seize the asset. This self-collateralizing nature is a key feature that often results in lower interest rates and more favorable repayment terms compared to unsecured business loans.
Low rates with Achieva Credit Union’s 5.50% APR* Commercial Business Loan
Achieva Credit Union’s competitive business loan rate of 5.50% APR* can be the difference between a stalled plan and a major expansion. This low cost of borrowing significantly reduces your payments, freeing up capital for operations, hiring, or marketing. For business owners looking to secure a new building, acquire a key investment property, or purchase essential equipment, this limited-time offer can translate directly into thousands of dollars in savings over the life of the loan.
What a Lower Rate Means for Your Finances
A lower rate translates directly into significant savings over the life of your loan. Look at this example scenario:
| Scenario: $375,000 Loan (20 Years) | Achieva Promo (5.5% APR)* | Typical Market Rate (7.0% APR* | Difference / Savings |
| Monthly Payment | $2,578 | $2,906 | $330 |
| Total Interest Paid | $243,720 | $332,440 | $78,720 |
For investment properties, these savings can be the factor that gives positive cash flow. When local businesses and investors own commercial properties, they are more likely to invest in long-term improvements and remain committed to their communities, fueling local economic development.
Get Started with a Commercial Business Loan at Achieva Credit Union Today
- Get Pre-qualified: Understand your borrowing limit and capacity.
- Analyze Your Finances: Determine the appropriate price range for a property.
- Research the Market: Identify opportunities that align with your business and investment goals.
- Assemble Your Team: Work with a trusted commercial real estate agent, attorney, and accountant if you don’t already have one.
- Act Quickly: Take advantage of competitive, limited-time rates before they expire. The most successful business owners leverage commercial business loans not only to stabilize their operations but also to generate investment returns, diversify wealth, and build a legacy that supports the local economy.
Consult with a Commercial Lending Specialist at Achieva Credit Union to learn how the 5.50% APR* rate can help you achieve your business and investment goals.
You can also call 727.431.7650 to start your business loan application. We look forward to working with you and helping you on your way to growing your financial future.
*APR= Annual Percentage Rate and is based on creditworthiness, loan term and collateral qualifications. Rates, program, terms, and conditions are subject to change without notice. Offer excludes construction loans and existing Achieva commercial loans. Business membership and account maintenance required for the duration of the loan. NOT SBA GUARANTEED. Federally insured by NCUA.
