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Lease or own: should your business buy its building?
Compare paying rent with buying the building your business uses, financed with an SBA 504 loan. Change any number and the chart updates as you type.
Lease or own your building
Rent today versus buying with an SBA 504 loan, which often allows about 10% down for owner-users who occupy most of the building. Ownership costs are a yearly percent of the price.
Disclosure: These tools are for a quick idea only, not advice or a loan offer. Real market data, property due diligence, lender terms and your own situation decide the final numbers once you finalize a deal and apply. Verify every result with your agent, loan officer, CPA or attorney before you decide.
How the calculator works
- Rent grows each year by the increase you enter.
- The loan payment uses your down payment, rate and term. Tax, insurance and upkeep are a yearly percent of the price.
- Net cost to own is everything you paid, including the down payment, minus the equity you hold at the end: the building value less the loan balance.
- The result also shows the answer with no value growth, so you can see how much depends on appreciation.
Common questions
What is an SBA 504 loan?
An SBA 504 loan helps owner-users buy or build commercial property. A bank and a Certified Development Company share the financing, and qualified borrowers often put about 10% down. The business generally must occupy at least 51% of an existing building.
Does the calculator include closing costs and SBA fees?
No. Closing costs, SBA fees, moving costs and income taxes are left out so the comparison stays simple. Add them to your own analysis before you decide.
What value growth should I enter?
Use a number you are comfortable defending. The tool shows the result with no growth as well, so you can see how much of the answer depends on it.
When does owning usually make sense?
When you plan to stay in the building for many years, your business can cover the payment comfortably, and you find a building that fits your operation without major changes.