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Where does the entrepreneur get the money to buy real estate and warehouse space?

Buying real estate is a big advantage for the company. Not only can it use the space itself, but it can also rent it and profit from it. When an enterprise has large assets, the matter is simple - it buys the property for cash. However, this form of transaction is rare on the Polish market, and businessmen much more often choose alternative solutions. Where to get the money to buy a commercial property or warehouse space?

No financial background

Most of the entrepreneurs who want to purchase a service premises, warehouse or office space do not have such a large financial base to finalize the purchase for cash. Therefore, companies are looking for other sources from which they could raise money for investments. Sławomir Molski from Wilsons Nieruchomości indicates loans as the most frequently chosen solution.

Investment loan for the company

One of the sources of obtaining money for the purchase of real estate or warehouse space for an entrepreneur is an investment loan. However, this type of loan is granted only to a selected entrepreneur. Banks grant it to companies that have experience in their business and can boast a long history of operating on the market. To receive it, you must meet a number of conditions, including be in a good financial condition, have adequate security for the loan and prepare a business plan.

A special purpose vehicle as a way to finance the purchase of office space

Getting a real estate loan for a business is not easy. Banks are reluctant to grant them to small entrepreneurs who are just starting their business on the market. For such companies, applying for an investment loan with a special purpose vehicle is a good alternative. In such a situation, the bank does not require any specific experience in the industry - explains Sławomir Molski from Wilsons Nieruchomości.

An SPV is usually a limited liability company or a joint stock company. It is equipped with capital and resources to perform a specific task, in this case the purchase of real estate. A special purpose vehicle is established by the owners of the enterprise and applies to the bank for a loan for real estate for rent or for a seat. As collateral, the bank only requires a lease agreement, which will be signed with future tenants. Only this document is subject to the creditworthiness assessment of the special purpose vehicle. The lease agreement is concluded between the special purpose vehicle and its company.

A special purpose vehicle as a way to finance the purchase of office space

Leasing is the second most popular method of financing the purchase of real estate by entrepreneurs. Various types of buildings can be leased - production, commercial, office and service buildings. The basis of real estate leasing is that one of the parties allows the other party to use a certain thing for consideration. At first glance, this form of financing the purchase of real estate does not differ from renting, but it should be remembered that the leasing contract provides for the transfer of ownership of the premises to the lessee. When the ownership rights are transferred depends on the leasing model selected.

For real estate, there are two options: operating lease or finance lease. The former means that the property remains in the lessor's property for the duration of the contract and the change of owner is possible only after the end of the contract and purchase. In the case of financial leasing, the real estate becomes the lessee's fixed asset at the time of concluding the contract, and the enterprise becomes the owner of the real estate with the payment of the last installment.

There are several ways to finance the purchase of real estate. The entrepreneur can buy the premises for cash, on credit or lease. Each of these options has its own advantages, but also some disadvantages. Even the one that seems to be the best in a given situation and moment of operation of the enterprise does not have to be the most advantageous for it. If you do not want to make a mistake, it is worth talking to both a real estate advisor and a loan advisor about the sources of financing.

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