Small businesses looking to expand on Long Island have a plethora of attractive financing options available, ranging from low cost mortgages to interest rate subsidies to facilities which will reduce real estate taxes (thus lowering financing costs).

The first consideration is whether the building is right for your business- size, location, price, etc. Once that determination has been made, the next step is to access all the financing and other resources which can make the project affordable and doable. One goal is to put as little money down on the building as possible. This enables you as a business owner to preserve cash for working capital needs and unexpected costs. Another goal is to get the longest term financing available. This will lower the monthly debt service and ease the burden on the company’s cash flow. A third goal is to get fixed rates where possible. Fixed financing costs help you as a business person to more effectively plan for your business. Fourth, you want to obtain the lowest interest rate possible. This may require “rate shopping” among lenders along with accessing low rate government related programs. Obviously, a lower rate , lowers your debt service, leaving more money for business operations. Last, but certainly not least, you want to access all related resources available to your business capital project- interest rate subsidies, real estate tax abatements, utility abatements etc.

On the financing side, NYS has a linked deposit interest rate subsidy program which can reduce ( for a period of time) the interest rate on the bank mortgage financing part of the transaction. There are several second mortgage programs out there which can reduce your downpayment. The most cost effective is the SBA 504 loan program. It provides 40% of the project cost (up to $4 million) in a second mortgage position and has many of the features which can help you achieve the above-cited goals: long term- 10 or 20 year terms available; fixed rate- the rate is set when the loan is funded and stays fixed for the full term of this self amortizing loan; low rate- the 504 loan rate is based on US Treasuries- look at the most recent 10 year treasury. That will give you a rough idea of 504 rates. Real estate tax abatements may be available from your municipality or through Industrial Development Agencies (contact your local town or county department of economic development). Utility abatements may be available through LIPA and Keyspan (Keyspan offers abatements for borrowers using SBA 504 financing).

All of these attractive financing tools can help make your small business dream of business home ownership a reality.