Is It Better to Rent or Purchase Your Office?

An office building often serves as the heart of a business’s operations. Many business owners ask themselves, “Is it better to rent or purchase your office?”

The short answer is that purchasing is usually better. While renting offers flexibility, purchasing an office provides long-term stability, builds equity, and saves money in the long run.

However, purchasing an office building is a significant financial and business decision. At Business Funding Group (BFG), we serve as professional loan packagers with extensive experience in helping businesses secure financing for their office purchases.

Contact us if you’re considering an SBA loan to help you get an office for your business. We can discuss your business goals and the advantages of ownership, and determine your loan eligibility during a free, 10 to 15-minute, no-obligation phone call.

Benefits of Purchasing an Office Over Renting

One of the biggest advantages of purchasing an office rather than renting is that it builds equity and serves as a long-term investment for a business. Instead of paying rent to a landlord every month, the office’s mortgage payments contribute to the business’s assets. The property value may increase over time, and that appreciation could help the business’s financial security. Conversely, rent is an ongoing expense rather than a business asset, with no appreciation or return on investment.

Having stability and predictable expenses is important for a business. With renting, a business is at the mercy of:

• Lease agreements
• Rent increases
• Other potential issues, such as changes or conflicts with property management

These uncertainties are not a consideration when a business has purchased its office. A fixed-rate mortgage offers monthly payments that stay the same. Overall, office ownership makes financial planning easier for businesses. It also gives business owners the freedom to renovate, expand, or make a location their own.

When Renting May Be the Better Option

For small businesses, renting an office can sometimes be a better choice than buying one. For companies just starting or lacking funds for down payments, renting offers flexibility without upfront financial commitments. It also allows for easier relocation if that becomes necessary.

How an SBA Loan Could Help With an Office Purchase

For business owners who decide to purchase an office rather than rent one, SBA loans can be a great financing option. The SBA offers various loan programs that help business owners purchase commercial real estate. SBA loans have borrower-friendly terms that make securing a loan for an office purchase attainable.

Here are a few ways that SBA loans make purchasing an office reasonable:

• Lower down payments
• Longer repayment terms
• Greater lender willingness to provide loans, as they are partially backed by the government
• Competitive interest rates

The SBA 504 loan program is a popular choice for real estate purchases because it offers large loans of over $20M to businesses, which could easily cover the cost of a business property. Repayment periods could be up to 30 years, making monthly payments manageable.

Contact BFG for Help Determining Whether To Rent or Purchase an Office

Deciding whether to buy a building or lease an office space is a big decision. So, is it better to rent or purchase your office? If you have good credit and cash flow, we believe purchasing is the more advantageous option. We could help you get a loan, making purchasing more possible.

At BFG, we specialize in helping businesses get the loans they need with the best terms possible for commercial real estate investment. Contact us today with any questions you have about SBA loans and how they could help you finance an office for your business.