When setting up a business, it’s important to choose the right location. Opting to buy commercial premises is an alternative to the constraints of a lease. Beyond the practical aspects of space, input, logistics and convenience, this approach offers significant autonomy. Find out how this option allows you to escape certain constraints, carry out fitting-out work, deduct certain charges, and enhance the value of your company’s assets.
Should you rent or buy commercial premises?
Whether it’s a franchise or another form of business, the decision to buy or lease commercial premises largely depends on the stage of development of the business. For a young business, whose financial resources may be limited, leasing offers a flexible solution that enables funds to be channelled into business development. Leasing also has the advantage of being easy to adjust to the company’s development, particularly in terms of staffing levels, whereas buying may entail an overly definitive geographical anchorage.
On the other hand, if a business has substantial financial resources, enabling it to acquire commercial premises without compromising its finances, buying may be a very attractive option.
Financially stable businesses with a solid grasp of their expenses can then consider buying as a long-term strategy, offering greater freedom and security.
How do I buy commercial premises?
The acquisition of commercial premises is a strategic option for many entrepreneurs, offering considerable autonomy and operational flexibility.
Before embarking on this process, however, it’s essential to find the ideal commercial premises for the business you’re planning.
Online advertising platforms, such as specialized websites, offer an initial perspective, enabling you to filter available properties.
Word-of-mouth and informing your network about your search are also effective methods.
Exploring shopping streets can prove fruitful, spotting “for sale” signs.
Chambers of commerce, town halls and other local authorities are additional sources, often listing properties for sale.
When buying commercial premises, there’s a decision to be made: whether to opt for unoccupied or occupied walls.
Buying unoccupied walls offers significant flexibility, allowing the buyer to fit out the space as required.
However, it also entails costs associated with fitting-out work.
Conversely, the purchase of occupied premises guarantees immediate profitability thanks to the rents received from existing tenants, simplifying the tenant search process.
The choice of purchase status also plays a crucial role.
There are a number of possible purchase options, including direct purchase by the business itself, purchase via a Société Civile Immobilière (SCI) in which the company becomes a partner, or purchase via a property lease.
Buying in one’s own name offers financial flexibility, but the personal and professional aspects may become confused.
Setting up a Société Civile Immobilière (SCI) separates the business from the real estate assets, facilitating management and transfer.
Before concluding a purchase, a number of criteria need to be carefully assessed.
The location of the commercial premises, its visibility, the surrounding area, future projects and the co-ownership regulations are all essential elements.
Technical diagnostics are also essential to guarantee the condition of the property.
A valuation of the commercial premises, taking into account their location and characteristics, is essential.
Once the price has been set, a preliminary sales agreement can be signed, followed by the deed of sale before the notary to formalize the purchase.
How to finance the purchase of commercial premises?
Financing the purchase of commercial premises generally involves taking out a bank loan, in whole or in part.
In most cases, future rents are intended to cover the monthly repayments.
There are two main options available to companies considering the acquisition of commercial premises: a business loan, which makes it possible to obtain a larger surface area than the company’s self-financing capacity would allow, and real-estate leasing, an attractive alternative when the business cannot mobilize a large capital contribution.
The latter option accelerates depreciation of the asset and offers significant tax advantages, notably the deduction of rental payments to reduce corporation tax.
The use of a broker is often recommended to obtain flexible and preferential borrowing conditions.
An interesting alternative approach to financing the purchase of commercial premises is to use the company’s own funds.
This choice largely depends on the company’s contribution, financial situation and long-term development strategy.
By using equity capital, the business can have more direct financial control over the commercial premises purchase operation, offering a degree of flexibility in terms of financial management.
The decision between borrowing and using equity will often depend on the business’s contribution, financial priorities and growth objectives.
How much should I contribute to the purchase of commercial premises?
Buying commercial premises often involves borrowing.
It’s vital to determine an adequate financial contribution to support this approach.
The contribution can come from the company’s own funds, external financing, or a combination of both.
A substantial contribution reduces the amount of borrowing required, and eases future financial burdens.
However, it is essential to strike the right balance, as too high a contribution may restrict financing capacity for other projects.
A careful assessment of the financial needs specific to the purchase of commercial premises is therefore essential in determining an appropriate down payment.
Who can buy commercial premises?
The purchase of commercial premises is not reserved for a specific category of buyer, and can be carried out by an individual or a legal entity.
Any company, regardless of its legal form, has the option of purchasing the walls of its commercial premises.
Whether it’s a sole proprietorship, a joint-stock company, a limited liability company (SARL), or other, the possibility of buying commercial premises remains open.
However, this decision needs to be carefully considered, and the business needs to assess its long-term financial capacity, in particular by anticipating the costs associated with borrowing, such as the personal contribution, notary fees, and any future charges linked to ownership.
Whether for commercial or non-commercial purposes, individuals or entrepreneurs can purchase commercial premises, either on their own behalf or on behalf of the company they run.
As far as rental investment is concerned, although residential property rental remains the most widespread form of investment, investors also have the option of acquiring commercial premises to rent out to companies looking for workspace or goodwill.
This investment diversification generally offers more affordable purchase opportunities, while also offering potentially higher rental yields.
In this way, investors can take advantage of the growing demand for commercial space while diversifying their investment portfolio.
