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    I had a lot of great questions come in over the past week that covered topics such as construction loan interest calculations, multifamily financing, hotel financing, and private money lenders. The one that was the most interesting concerned small business real estate financing.

    Buying real estate for your small business offers you, as the business owner, several advantages over leasing. The first advantage is that financing the real estate purchase helps small businesses grow into larger businesses by preserving capital during expansion. Growing a business is a cash management balancing act and the less money buried in facilities means more money for other necessary functions.

    The second advantage is tax related. Funds to support the business can be diverted to help your personal portfolio by building equity in the commercial real estate housing the business. The lease payment that benefited your former landlord is now helping you reduce current business income from a tax standpoint, yet keeping it in your pocket through your real estate. Many owners take the property in their personal names and have the business pay rent to them rent to cover the property’s operating expenses. Some even have additional tenants to supplement the cash flow.

    The third ad

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    eal estate financing.

    Buying real estate for your small business offers you, as the business owner, several advantages over leasing. The first advantage is that financing the real estate purchase helps small businesses grow into larger businesses by preserving capital during expansion. Growing a business is a cash management balancing act and the less money buried in facilities means more money for other necessary functions.

    The second advantage is tax related. Funds to support the business can be diverted to help your personal portfolio by building equity in the commercial real estate housing the business. The lease payment that benefited your former landlord is now helping you reduce current business income from a tax standpoint, yet keeping it in your pocket through your real estate. Many owners take the property in their personal names and have the business pay rent to them rent to cover the property’s operating expenses. Some even have additional tenants to supplement the cash flow.

    The third a

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    serving capital during expansion. Growing a business is a cash management balancing act and the less money buried in facilities means more money for other necessary functions.

    The second advantage is tax related. Funds to support the business can be diverted to help your personal portfolio by building equity in the commercial real estate housing the business. The lease payment that benefited your former landlord is now helping you reduce current business income from a tax standpoint, yet keeping it in your pocket through your real estate. Many owners take the property in their personal names and have the business pay rent to them rent to cover the property’s operating expenses. Some even have additional tenants to supplement the cash flow.

    The third a

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    iverted to help your personal portfolio by building equity in the commercial real estate housing the business. The lease payment that benefited your former landlord is now helping you reduce current business income from a tax standpoint, yet keeping it in your pocket through your real estate. Many owners take the property in their personal names and have the business pay rent to them rent to cover the property’s operating expenses. Some even have additional tenants to supplement the cash flow.

    The third a

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    r pocket through your real estate. Many owners take the property in their personal names and have the business pay rent to them rent to cover the property’s operating expenses. Some even have additional tenants to supplement the cash flow.

    The third advantage relates potentially to your estate. If the property is in personal name and the business is unwound, sold, or terminated for any reason, that asset is not part of the business transaction. This can simplify an otherwise complex situation.

    There are two types of small business real estate loans. One is guaranteed by the Small Business Administration (SBA), the other we’ll call “conventional.” Both offer a business owner a loan amount up to 90% of the purchase price of the property used for the business. The government guaranteed financing tends to have a somewhat lower rate, but requires a great deal more paperwork. Conventional financing is the more flexible by offering different documentation requirements and potentially faster funding.

    Conventional Small Business Real Estate Financing

    In recent years, some lenders have created SBA “look-alike” or conventional programs that have fewer restrictions than SBA-guaranteed financing. For example, they allow the owner-user to occupy less space in

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