Buy your business premises

A relaxing of interest rates by the Reserve Bank in recent times has provided added impetus for small business owners to own their own premises. Here are a few reasons to own your own business premises:

  1. Asset growth and equity
    As a tenant, when you pay rent, you never see those funds again. Sure, you do get a SARS tax deduction but the net result is that you are simply paying for someone else to build their property portfolio and assisting their cash flow. Buying your own business premises does not have to cost you upfront as there are institutions offering 100% of the purchase price plus transfer and legal costs plus VAT (if applicable). The reality is that you will be building your asset base, your own equity and your own wealth.

  2. Control and productivity
    When you own your own space you can layout, design and re-design the property as often as you like. This often leads to increased productivity and results as your place of work becomes really comfortable and a pleasure to occupy.

  3. Community building
    When you own a property you can develop a community around your property. It is well known that people who have sense of belonging and quality relationships around them are happier than the average person.

  4. Diversification by including property as part of your portfolio
    The rationale behind diversification is to have different kinds of assets and investments in your portfolio so as to spread the risk. Diversification strives to smooth out unsystematic risk events so that the positive performance of some investments may neutralize the negative performance of others.

Here are a few hurdles that would have to be met in order for you and your business to qualify:

  1. Your trading business must be in existence for at least 18 months
  2. You must occupy at least 50% of the property
  3. You must be able to afford the loan repayment comfortably
  4. Property Finance deals range from R500k to R30m and is subject to a viability test and other conditions stipulated by the relevant financial institution.

For more information on finding out more on how you could finance your own premises contact Nuno Muscolino on 082 908 1964 or