Batman had the Batcave and Superman had the Fortress of Solitude, so even superheroes understand the importance of having a headquarters. As an SME, you can save money by not having a HQ, but do you really want to lose out on the benefits that come along with owning a business premises?
Why You Need a Business Premises
A headquarters can be beneficial for many small business enterprises, especially if you make a purchase rather than renting. A few of these benefits are:
• Buying a business premises may be a large investment, but it may also be a great way of making money to help expand your business. When you eventually decide to sell the property, any profits on the sale are yours to keep and spend how you like. You could give the staff a really good bonus or relocate to a larger building.
• If you do decide to move in the future, you don’t have to sell. You could rent out the property as another income stream. In fact, if you have some spare space you could rent out part of the premises while you are using it and recoup some of your outgoings.
• A business headquarters is a place where all staff members can meet and interact.
• It can provide a singular postal address for mail.
• A business address adds credibility to a business and makes it look more professional.
• Owning a property adds greater flexibility than renting premises, as you will have direct management of the building. This means if damage does occur, you can call a repairman in yourself, there is no need to ring a landlord and wait for them to fix it.
• With a fixed-rate mortgage you can successfully forecast expenditure with relative certainty. Mortgage repayments are likely to be more affordable than rental payments, and interest payments on a commercial mortgage are tax-deductible.
Buying Business Premises
If you are looking to invest in a HQ then it may be beneficial to visit experienced commercial mortgage brokers before you make any big decisions. This way you can guarantee you get the best deal for your money, without the time and hassle of contacting lenders yourself.
Unless you are paying for your HQ with cash, you will require a business mortgage or an owner occupier business mortgage in order to finance the property purchase. We would recommend you have a mortgage in principle before you start property viewings or make an offer on any premises – you don’t want to set your heart on the perfect spot for your business only to find that it’s financially out of your league.
As well as a mortgage there are other costs you should consider:
• Surveyor and solicitor fees
• VAT and/or Stamp Duty Land Tax
• Companies House searches
• Ongoing business rates
So, will you be looking into buying a business HQ? What benefits are you hoping it will add to your SME? For more information on buying a business premises take a look at our commercial mortgages page or read through our blog posts on related subjects.