Lease strategies for Denver Metro

Posted: October 22, 2010 in Uncategorized

Wow.. what a market! There are those buying up the failed business for 20 to 50 cents on the dollar. On the other hand, new business owners are putting their ideas to market, some for the first time.

Banks are still being ,, banks,, giving the perception they are helping but are just spinning everyone’s wheels. As always, you either have the money, or investors, or you don’t. Banks only lend to those who don’t need the money,, investor’s lend to those that might make it, but have a great equity position if they don’t!

SO, how about leasing? Leasing can be a great strategy especially in this marketplace. In between those going out of business and those buying businesses is a place for those that do not have large amounts of money on hand.

If done properly, a lease can help you to use your future earnings to secure your business success. Leasing, lease to own, lease option, 5+5, 7+1+7 are all different lease strategies that can keep your expenses low, keep your options for expansion open, and again leverage money you might use for downpayment for additional turns and profit in your business.

Lease rates are still low, but are beginning to creep up in Denver. Banks are not refinancing the 5 yr balloon notes, 7+1 mortgages, or any other mortgages that are coming due. If you get a fixed 10 15 or 20 year loan with 35% to 50% down, you may have little capital left for getting your business started. The fees banks are charging for loans, refi, are very high and the SBA loans still have a 3 points IN ADDITION to any other fees charge by your broker or local banker. If you are still insistent about buying, look at owner carrys or private money with long terms of financing.

Or instead, you can lease for 5 years and put aside profits so that you can expand, or buy out the building you are renting, OR you just might realize the profit and turns you can make in your business. Downpayment, points, loan fees and the higher payments you will make to buy real estate is lost capital that cannot make income. Put the right lease together and give your business all the capital it needs to take root and blossom!!

Good things!

Kenny d

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