Opening a brick-and-mortar location for your small business, whether it’s your first time or fifth time, can be daunting. Read these reminders for things to know and look out for before you sign on a property.

Opening a brick-and-mortar location for your small business, whether it’s your first time or fifth time, can be daunting. Read these reminders for things to know and look out for before you sign on a property.

Are you thinking about buying or renting commercial space for your small business? It’s an exciting step forward in your growth! Before the excitement (or the stress) gets to you, take the time to do your research. Investing in commercial property can get confusing and potentially expensive.

Know Your Lease Inside and Out

Take as much time as you need to review and read through any commercial real estate lease you’re considering. If a landlord is pushing you to sign right away, this is a red flag that you really should pay attention to the fine print.

Landlords and real estate agents may try to trick you into paying more than just rent. Be aware of shiny Tenant Improvement (TI) packages for improvements and physical upgrades that passes on the actual cost onto you over time. Ask about fees and costs for Common Area Maintenance (CAM) that you would be responsible for regarding hallways, parking lots, lobbies, and other shared spaces.

Learn real estate terms ahead of time and be prepared to get a second opinion from your business advisor.

Most importantly, know that you have the power to negotiate. You may not end up getting the space, but you should never buy commercial real estate that will cripple your small business with hidden fees and terms.

Visit the Property In-Person

Just as you would never buy a house or rent an apartment before you visit the place, you should know exactly what your commercial space looks and feels like before you sign the lease.

Your customers and employees may not have any parking close to your location, the real estate agent may be fudging the real square footage (don’t pay for unusable space, take your own measurements!), listing photos may have been altered, you might have a really noisy business neighbor, and many other factors that you should know before you buy.

Plan For the Future

When you are looking to for commercial real estate, you’re probably thinking about your immediate business growth needs. However, it is also important to plan for the future of your business and of the property you want to lease or buy.

One thing you should consider is if you sell your small business. If the business is assigned a new owner, will your lease transfer to the new owner? If your landlord has the right to terminate the lease in this event, that might hurt the business and your chance for a profitable sale. For brick-and-mortar small businesses, often your location is a big part of your success.

Another thing to know is liability and insurance for natural disasters and acts of vandalism. We wrote a comprehensive blog post about how to prepare and protect your small business in the event of an emergency, and it’s important to be clear what your responsibility as a tenant or new property owner is.

Make Sure You Have Enough Capital

Renting or buying commercial real estate can be much more expensive than small business owners initially think. Unexpected costs can add up fast, and it is important to maintain a positive cash flow for the success of your business. If you think you need a loan to cover the cost of expanding your business, Opportunity Fund can help.

 

For information about Opportunity Fund’s small business loans, please contact us at 866-299-8173 or loans@opportunityfund.org.  For questions about your existing loan or other customer service questions, please contact us at 866-299-8173 or sbhelp@opportunityfund.org.


Opportunity Fund is tackling economic inequality so that hard work and perseverance means a shot at getting ahead, not just struggling to get by. Our programs are supported by a community of donors and investors whose contributions help to fund small businesses, support college students, and build stronger families and vibrant neighborhoods. Since 1994, the team has deployed $600 million and helped 20,000 families earn, save and invest in their own futures. Opportunity Fund has earned a 4-star rating from Charity Navigator, America’s largest independent charity evaluator, for our commitment to accountability and transparency.

Visit us online at http://opportunityfundloan.org and follow us on Facebook and Twitter

Opportunity Fund loan consultant Osbaldo Velazquez was recently featured on KLAA Community Cares, an Anaheim-based radio program that addresses issues and organizations from the Southern California area that impact the community. KLAA Community Cares host Tammy Trujillo featured Osbaldo and one of the small business borrowers he’s helped with financing, David Anderson. David sells products at home shows, events, and convention centers.

Opportunity Fund loan consultant Osbaldo Velazquez was recently featured on KLAA Community Cares, an Anaheim-based radio program that addresses issues and organizations from the Southern California area that impact the community. KLAA Community Cares host Tammy Trujillo featured Osbaldo and one of the small business borrowers he’s helped with financing, David Anderson. David sells products at home shows, events, and convention centers.

Here are some highlights from the broadcast:

The importance of shopping local

David Anderson: Opportunity Fund can help because having a little bit of access to just some capital, to maybe make some new signs, you know? If I want to make some signs, they cost a few hundred dollars and on a given week I may not have that few hundred dollars to invest in some new signs.

If I can get some working capital, a small loan from somebody, like Opportunity Fund, then I’m more able to invest that extra hundred bucks this week, an extra two hundred bucks that week, in growing my marketing presence. I can reallocate my resources a little bit.

It gives you a little breathing room and a little flexibility to make different decisions that maybe you wouldn’t be able to make because otherwise you’re hand to mouth to a certain degree.

Tammy Trujillo: Where would we be without small businesses? They’re everywhere. I love going to family owned owned businesses because you get a lot of great attention from them. They have products you don’t find sometimes. I like it because I know when I buy [something], I’m helping them out.

David: I often say, if you want a strong economy, spend some dollars locally. I live in Huntington Beach and when I do our street fair there, the income I get goes back to the restaurants and the shops in town because that’s where I get my coffee on a Tuesday morning.

How to get started in small business

Tammy:  Is [now] a good time to start a small business?

Osbaldo Velazquez: I think it’s always a good time to start a business if it’s something that you like and that you want to do. I think you should pursue your dreams. This is the beauty about our country. There are a lot of resources here that support the growth of a small business. It’s easy to start a business, compared to some other countries. In Latin America, to start a business, formally and officially, it might take more than a month. Here, you can go to the county recorder, file a fictitious business name and start a business that way. Depending on the type of business you’re going to start, [you might need] a permit at the city where you’re going to operate, depending on the product or service that you’re going to sell. If you’re going to purchase products for resale, then you’re going to want to get a reseller’s permit with the state.

Those permits are relatively easy to get. The processes are simple. Again, it comes back to the fact that our country supports entrepreneurship because of the economic impact it has in all of us, in all of our local communities and the city and the state and the country.

It’s what makes this country great, to be able to sell and create. It is always a good time to start. There are seasons during the year or during different economic cycles that it might become harder, [like] after the recession. In some instances, it’s even a necessity. Here in southern California, where we have a lot of immigration, especially from Mexico and Latin America, there are a lot of immigrants that come here and start a business because out of need. They might not know the language but they know they have some skill to start a small food business, [for example]. [Many] businesses that have been started by immigrants become big businesses [and even] become corporations.

What to look for in a lender

Osbaldo: The important thing is to go to the resources that support small businesses and avoid other “opportunities” that can provide quick money without a lot of process and paperwork. In the small print or no print at all, [they find out that they signed up for] high cost loans.

You must navigate the waters carefully. Follow your passion and access [community] resources like Opportunity Fund. Do your comparison between the different types of products [for] capital. Compare the lending costs and make an informed decision so that you can have the best resources available to support the growth of your business.

Listen to the full broadcast on our SoundCloud channel here.


Opportunity Fund is California’s largest and fastest-growing nonprofit lender to small businesses. Last year, we made $60M in loans to help more than 2,200 small business owners invest in their businesses.  Opportunity Fund invests in small business owners who do not have access to traditional financing. As a founding member and signatory to the Borrower’s Bill of Rights, we believe in the important role small businesses play in our community and the economy, and we aim to help owners financially succeed.

Visit us online at opportunityfundloan.org and follow us on Facebook and Twitter

Opportunity Fund. Working Capital for Working People. opportunityfund.org