If you’re considering setting up a department store in Texas, you’ll need a commercial loan to fund your purchase if you don’t have money available upfront. However, taking out a huge sum as a commercial loan is not suitable for every business owner.
If you’re conflicted about taking out a loan, you can count on us to give you the best commercial property investment tips in Texas. At Z Finance Solutions, we have a team of expert commercial property advisors who can help you throughout the process, streamlining the buying and selling of property for you.
Let’s discuss some pros and cons of a commercial real estate loan to help you decide whether it’s the right decision for you.
Commercial Loans Benefits
· Cash Flow
Taking out a commercial loan for your business will benefit your greatly. One of the main challenges of new start-ups is irregular cash flow.
Commercial loans will stabilize the revenue streams and provide you the cash flow you need to invest in your business, i.e., buying products, employees’ payroll, and other expenses of a department store.
· Business Ownership
Another benefit of taking out a commercial loan for your department store in Texas is that you won’t need an investor and keep the ownership rights to yourself. If you don’t want to sell equity shares and be the sole owner of your business, a commercial loan is the best option for you.
Taking investors’ help, you will have to share the decision-making rights as the board members will hold you accountable for the capital that they provide you.
· Access to Money
Taking out commercial loans will improve your financial capability and provide you with the funds necessary to invest in the initial phase of your business.
It’s possible to cover all your expenses with a commercial loan, and since you’re financing everything through a loan, it’ll keep things simple and neat.
The Cons
· Extensive Paperwork
Commercial loans are difficult to obtain compared to residential loans. Commercial loan paperwork is extensive, making the process stressful.
You’ll be required to submit 3–4 years of tax returns, credit scores, financial statements, and other documents. You’ll also have to present your short and long-term business plans to convince the lender.
· Less Flexibility
Unlike equipment loans or other options like a business line of credit, commercial loans are a lot less flexible. You’ll need to have a payback plan and stick to it by making regular payments every month.
· Default Risks
A secure commercial loan is risky as you can end up losing all your assets if you’re unable to pay back your lender.
As with any financial decision, you’ll have to weigh the pros and cons of a commercial loan as well. There will always be a risk, but with a commercial loan, you’ll have cash flow that you can use to generate revenue and repay the loan.
Schedule a meeting with our team before choosing to work with our commercial property advisors in Texas.
From home loans for first-time homebuyers to financial advice for property investment, commercial property investment tips, and assistance with the down payment on homes, we can do it all.
Get in touch with us today for more details!
