May Blog
Most business owners are already paying a mortgage every month - the
problem is, it isn’t theirs. It belongs to their landlord.
If your business has been operating successfully from the same location,
you’ve already proven the space works. Your customers know where to find
you, your revenue is tied to the location, and chances are you've invested
time and money in improving a property you don’t own. Yet each month,
your rent payment helps build someone else’s equity instead of your own.
The Ownership Conversation Most Businesses Never Have
Imagine you're paying $8,500 per month in rent for a 5,000-square-foot
space. Over ten years, that's more than $1 million paid out with no
ownership stake at the end.
Now compare that to purchasing a similar property using SBA 504
financing. With approximately 10% down on a $1.2 million property, your
payment may be slightly higher initially, but ownership can create long-term
value through:
• Building equity through principal paydown
• Potential property appreciation over time
• Tax advantages such as depreciation benefits
• Greater control over occupancy costs compared with lease increases
The conversation shifts from simply paying for space to building an asset
that can become part of your long-term wealth strategy.
Why Many Business Owners Never Explore It
In conversations with business owners, three concerns come up
repeatedly:
"I can’t afford the down payment."
Many owner-occupied SBA programs require approximately 10% down,
and there may be multiple funding strategies available, depending on the
business situation.
"My business isn't large enough."
SBA financing was specifically designed to help small businesses acquire
owner-occupied commercial properties.
"I've never seen the numbers."
Many owners evaluate rent as a monthly expense rather than comparing it
The long-term financial impact of leasing versus ownership.
Questions Worth Asking Your CPA
If you currently lease commercial space, consider asking:
•What would the tax impact be if I purchased a building?
•How could depreciation affect my business income?
•What does my projected cost of leasing versus owning look like over
the next 10 years?
Those conversations can provide valuable insight into whether ownership
aligns with your business goals.
A Different Perspective
Commercial real estate doesn’t always have to be viewed as a separate
investment. For many business owners, it may simply be the building they
already operate in - with the potential to turn a monthly expense into a long-term asset.
Interested in exploring the numbers? I’m always happy to discuss buy-
versus-lease scenarios, connect business owners with trusted SBA lending
resources, and help evaluate opportunities based on your specific goals.
Mark Ellsworth is Principal Broker at Southern Equity Commercial, a CRE brokerage serving Metro Atlanta and the Southeast. For deal inquiries or consultations: mark.ellsworth@kw.com | 404-449-6275 | southernequitycommercial.com