Guest Post by Dale Gunther, Vice Chairman of the Board, People’s Utah Bancorp
Could your business benefit from the still-low commercial real-estate prices?
Let me tell you about one business that did. Recently, one of Bank of American Fork’s small business customers came to us saying the business had outgrown the office / manufacturing / warehouse building it had been renting. He went out and found a building that he felt would serve the business’s long-term needs. He wanted to purchase it, but was concerned about taking capital out of the business to buy real estate. He found that his personal financial condition would support the purchase so the business could rent from him personally. This allowed the business to utilize its capital to grow the business and gave the owner an opportunity to increase and diversify his personal wealth through ownership of commercial real estate. This is a common way of structuring this type an investment that benefits both owners and the business.
We are currently in a buyer’s market for commercial real estate. If you have a successful small business or profession, now may be a good time to consider looking long term at your real-estate needs. If it makes financial sense, talk with your community banker about your plans and needs. Your banker should be able to look at your situation and let you know if you can qualify to replace fear with fortitude.
In spite of the slowdown in the economy, banks have money to loan in this area and are anxious to make good loans to qualified borrowers. Community banks are dedicated to helping their clients achieve their dreams and build their communities.
The present administration has put more money into lending for small business. SBA loans are now available for qualified small businesses looking to purchase or construct owner-occupied commercial real estate. SBA loans may be less capital intensive because they only require 10-20 percent down rather than 30-35 percent down for traditional loans. SBA loans can be attractive to banks as the SBA guarantees a large portion of the loan. They are designed to help small businesses grow and prosper. SBA commercial loans for equipment and accounts receivable financing have been made more attractive for growing your business.
Whether your needs are for long-term commercial real estate or short-term working capital, community banks stand ready to help you prudently plan for your individual and business success.
Eleanor Roosevelt once said, “It’s better to light a candle than to curse the darkness.” Those words still ring true today. If you are qualified to purchase commercial real estate, why not light a candle, and take the next step by visiting your community bank?
Dale Gunther is vice chairman of the board of People’s Utah Bancorp, the holding company for Bank of American Fork, which is an SBA-Preferred Lender, Equal Housing Lender and Member FDIC. At the start of his 16-year tenure as CEO at Bank of American Fork, the bank had two branches and $80 million in assets; it now has 13 offices and more than $880 million in assets. Dale has served as chairman of the Utah Bankers Association and currently serves as an American Fork city councilman. This article should not be considered legal or investment advice. Seek legal and investment advice from your own qualified professional.