
Investing into an office space in Pune not only gives your business the perfect space but also guarantees high returns on the investment made. Although there are various aspects to pay attention to while acquiring an office space in Pune the most important aspect is the acquisition of funding for the office space. In this article, we will share some interesting tips which will help you to fund your investment and we also present to you Dream Location, Pune as one of the top names into real estate business in Pune.
Recommendations While Financing an Office Property in Pune
1. Evaluate Your Financial Standing
Having a good understanding of your finances before seeking funding is very important. This includes:
a. Obtaining a Credit Report
While applying for an office space in Pune, your credit score becomes key when searching for a financial deal. As the credit score increases the conditions and the interest rates for loans becomes much more favorable. A reputable finance company can assist you in getting hold of your credit reports easily.
b. Be Precise with Your Budget-Breaking Strategy
Determine how much you can spend on renting your office space in Pune without disturbing the day-to-day functioning of the business. Include all additional costs like down payments, EMIs, maintenance, taxes, insurance, etc.
c. Cash Flow Management
Be sure that your business has sufficient cash flow to be able to meet any loan repayments. The lenders expect you to show stable cash flow and profits in order for them to give you a loan.
2. Evaluating All Potential Sources Available
Once you are satisfied with the overall assessment of your finances, you can assess the various options available to you. Here are some common methods:
a. Conventional Bank Loans
Conventional bank loans are an option where the ventures of setting up the office could be financed. Most of these loans have lower interest rates and reticulated repayment period ranges but can prove to be difficult for the less creditworthy small business owners or start up’s as obtaining a bank loan is quite tough.
b. Government sponsored schemes
Small business owners should look for government schemes that offer loans. Such loans typically offer great features with low down payments.
c. Business Mortgages
Business mortgages are relatively the same as residential contracts on mortgages except that they are used when buying a business property. Such loans are available through banks, credit unions and certain lenders that only deal with business mortgage loans.
d. Owner Financing
In some situations, the owner of the office property may provide owner financing. In this case you under the terms of the agreement can pay the seller through installments over an agreed duration. Owner financing may be helpful if you do not qualify for conventional loans but the rates will differ widely.
e. Leasing with an Option to Buy
If you are looking to finance an office space but are not in a position to do so immediately , considering leasing an office space over a period with an option to buy it after the lease period may help. This facility allows you to lease the premises but gives you the right to purchase it for a fixed price after some time.
f. Crowdfunding and Peer-to-Peer Lending
One can approach the crowdfunding and the peer to peer platforms as other financing options. These sites allow investors to lend to specific borrowers who want to finance their projects. Though these options are great for one to avoid meeting many criteria, they tend to have higher interest rates.
3. Prepare a Solid Business Plan
A properly developed business plan is very crucial, especially when seeking financial assistance for your office in Pune. A business proposal usually contains the following components:
a. Executive Summary
This section summarizes the business including its goals, objectives, vision and mission statement.
b. Financial Projections
These should also include some detailed financial projections for profit and loss, cash flow, balance sheet and so forth. Explain how the investment in the office will enhance and help in increasing the business.
c. Market Analysis
It would be wise to conduct a thorough market analysis to demonstrate to potential lenders that you are knowledgeable about the industry and areas that you with to operate in. Illustrate your value proportions and your intended clients.
d. Detailed Description of the Property
Explain in full details the office premises which you intend to buy in terms of its location, size, facilities, and expected growth in value.
4. Save for a Down payment
A majority of the financing options require a down payment, which is between 10% and 30% of the value of the property purchased. As soon as you can bear a down payment, put it on lay-away so it’s available when the time is right. Perhaps you might not want to panic for a borrowed and caused this expense to go to other expenses.
5. Improve your credit score
Improving your credit worthiness will increase the chances of obtaining loanable funds at a reasonable cost. Here are guidelines that can help:
a. Pay down existing debt
Settle existing debts to lower your debts to income ratio. This can help you score a better rating and prove to the creditors that taking out a loan at this point is a low risk as you can service the debt without difficulty.
b. Don’t Create New Debts
Try not to add any additional debt as the loan application date gets closer. This is because lenders like to take loans out to people with strong financial positions.
c. Fix Errors on A Credit Report
Look through your credit report for mistakes and inconsistencies and rectify them as soon as possible. Even smaller mistakes can lower your score.
6. Seek For Professional Help
To avoid the problems that come with fresh loans, consider reaching out to:
a. Commercial Real Estate Brokers
If you need a qualified commercial space in Pune, Reach out to a commercial real estate broker who will also help you with the pricing.
b. Financial Advisors
If you want to analyze your finances and budget as well as search for loan providers, A financial advisor can do that just for you.
c. Mortgage Brokers
With the help of a mortgage broker, you will gain access to numerous lenders which would eventually help you get the best possible rates.
7. Negotiate Loan Terms
If you feel that the rates they have given you for loans are suitable then do not shy away from negotiating terms of the loan. The most important things to negotiate include:
a. Interest Rates
Work on getting the lowest possible interest rate in order to reduce the overall cost of debt.
b. Payment and Repayment Details
If applicable, first work out the repayment terms that are suitable for the cash inflow and also what is said in the financial projections.
c. Fees for Early Settlement
Try to obtain the provision of ‘no prepayment penalties’ or ‘minimal prepayment penalties’ so as to allow you to settle the loan in case you can afford to do so.
8. Expect The Un-Expected
Set aside a certain budget for expenses that don’t fall within the predetermined range. Keep in mind that the business’s finances can turn on its head. Set aside a certain budget that can cover expenditures that couldn’t be forecasted and make sure that you have contingency measures ready to tackle an impending financial situation.
Conclusion: Your Way to Get an Office Investment in Pune Finders
In final words, obtaining financing for your commercial property in Pune isn’t that difficult. As long as you keep all these things in mind, you should end up being able to get sufficient funding for your office investment and be able to run your business. If you are interested in premium properties in Pune, do not miss the commercial properties of Dream Location Pune. With regards to meeting clients’ various interests, Dream Location Pune is proud of its thirty-seven -year history of a strong brand presence through creating various commercial landmarks in the most attractive locations in Pune.
For more information about Dream Location and to search your dream property, please visit Dream Location on Google Map. Contact us today to know more about the best real estate deals in Delhi and North India; we will connect you to the right property investment.