SCORE Small Business Blog

Growing: Playing Monopoly—For Real
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I was playing Monopoly the other night. The person who ended up winning the game—and I mean rolling in cash, while the other players groveled to scrape up $15—was the person who started small, bought some under-recognized properties, built gradually…and ended up wiping the rest of us out.

I was reminded of that game when I read the results of the recently released CIT Small Business Commercial Real Estate Study. The survey found that only 6 percent of small business owners have bought a commercial property in the past two years. The majority (52 percent) have not even considered buying commercial property. This, despite the fact that 28 percent agree that buying real estate today presents a “great” or “substantial” opportunity.

And they’re right – there are some amazing deals out there right now. So why aren’t small business owners snapping up commercial real estate? As you might expect, current market/economic conditions were the biggest barrier for 36 percent of respondents. Financial conditions are also a factor: 19 percent of entrepreneurs said they couldn’t afford the down payment needed to get a bank loan for commercial real estate.

But it’s not all about the economy. A big part of the problem is lack of awareness of your options. The majority (52 percent) of respondents weren’t familiar with the Small Business Jobs and Credit Act or how it might impact them as small business owners. The recently enacted law enhances SBA loan terms for both lenders and borrowers, eliminating borrowers’ fees, raising the loan guarantee from 75 percent to 90 percent, and increasing loan limits.

With the ability for borrowers to make a lower down payment, enjoy a lower monthly payment, and pay off the loan over a longer time period, SBA loans are a great option for small business owners seeking to buy commercial real estate. A SCORE Mentor can help you find the right financing option for you and prepare your loan application package.

I know now may seem like a scary time to make such an investment. But if you wait until everything’s perfect, you could be waiting forever. Sometimes, as my Monopoly opponent proved, you just have to take a leap of faith.

Rieva LesonskyCEO, GrowBiz Media
Rieva is CEO of GrowBiz Media, a content and consulting company specializing in covering small businesses and entrepreneurship. She was formerly Editorial Director of Entrepreneur Magazine and has written several books about small business and entrepreneurship.
www.growbizmedia.com | @rieva | More from Rieva

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