Financing business premises? These are the 8 best financing options for SMEs

1. Bank financing

• Minimum loan amount: $ 1,000,000
• Interest rates: very favorable
• Conditions & flexibility: moderate
• Application time: 2-3 months

Financing small business premises is not profitable for banks, which means that most banks have the minimum loan amount at a lower limit of $ 1,000,000. As a result, SMEs with small premises are better off looking elsewhere, while larger companies are in the right place with a bank, because of the favorable interest rates they offer.

Compare 8 bank financiers

2. Microfiners

• Maximum loan amount: $ 250,000
• Interest rates: moderate
• Conditions & flexibility: very favorable
• Application time: 3 - 6 weeks

Where banks start with a loan sum of one million, microfinance providers usually apply a maximum of $ 250,000. Microfiners are non-bank institutions such as Qredits, which provide smaller loans to entrepreneurs. Financing business premises is also an option at various microfinance providers, in addition to business loans or credits. These smaller financiers are very flexible, but on the other hand there are higher interest charges.

Compare 24 microfiners

3. Crowdfunding

• Maximum loan amount: $ 2,500,000
• Interest rates: moderate
• Conditions & flexibility: reasonable
• Application time: 3 - 6 weeks

Crowdfunding, a form of financing that has become very popular in recent years. For entrepreneurs because of the difficulty of financing at banks. With investors because of the volatile stock markets and the easy accessibility.

The term of financing via crowdfunding is more limited by a maximum of 10 years than with other forms of financing where the maximum term is 20 years. In addition, interest rates are usually quite high (6.5% - 7%) and the crowdfunding platform charges a brokerage fee of approximately 0.5% of the loan amount per year. They are not necessarily the most favorable conditions, but a great solution for entrepreneurs who cannot be helped elsewhere.

Compare 7 crowdfunding platforms

4. Institutional investors

• Minimum loan amount: $ 1,000,000
• Interest rates: favorable
• Conditions & flexibility: reasonable
• Application time: 4 - 6 weeks

Institutional investors such as pension funds and insurance companies, by their nature, have to invest large sums of money, but only want to take limited risk. Commercial real estate is therefore an interesting investment for this target group.

Request supply from institutional investors

5. Small funds and investment companies

• Minimum loan amount: $ 200,000
• Interest rates: reasonable
• Conditions & flexibility: favorable
• Application time: 4 - 6 weeks

Where institutional investors usually invest in larger real estate objects - because smaller projects are not interesting due to their size - there are several smaller funds and small investment companies that invest part of their portfolio in real estate.

Because they do not have to meet the requirements and guidelines of the European Union and the Netherlands Authority for the Financial Markets, which financial institutions do have to, they are flexible to whom they lend. This can be a great option for SMEs who are just stuck with other financiers.

Usually this group does not directly do business with an entrepreneur, but a financial advisor with a good business network can probably put you in touch with various parties.

For example, the real estate finance advisor we work with has direct contacts with 81 financiers. If you are interested in the opportunities they can offer you, you can contact them here .

6. Wealthy individuals

• Maximum loan amount: $ 1,000,000
• Interest rates: reasonable
• Conditions & flexibility: favorable
• Application time: 3 - 6 weeks

Wealthy individuals, there are many in the Netherlands. A large group of them are willing to finance business premises at 4-6% interest. In this way they get more security than on the stock exchange, for a decent interest payment.

How do you find wealthy individuals who may want to finance your business property? There are platforms like possible and (usually at 6.5% interest, plus 0.5% of monthly interest for administration fee) that bring together supply and demand.

Many corporate finance brokers also have a small network of high net worth individuals who can provide financing on more favorable terms, as there is no platform that charges management or administration fees. Wondering if this is the best loan form for Your business property financing? And what our real estate finance advisor currently has in portfolio in terms of wealthy individuals? Get in touch .

7. Bridge financing

• Maximum term: 24 months
• Interest rates: unfavorable
• Conditions & flexibility: very favorable
• Application time: 2 - 4 weeks

A short-term loan that is used in a bridging period. For example, when new business premises have been purchased, but the old business premises have not yet been sold. Also widely used in project development, where a mortgage is obtained when the project is completed, because the value of the property is higher at the end of the project and it can then be borrowed on better terms.

8. Leasing

• Minimum loan amount: $ 100,000
• Interest rates: unfavorable
• Conditions & flexibility: unfavorable
• Application time: 3 - 6 weeks

Not a common option when financing business premises, but leasing can be a good solution in exceptional circumstances. Consider, for example, a sale and leaseback construction for a company that is in financial trouble and has an acute need for cash. In that case, you sell the current property to an investment company and lease it back.

Family and friends

Finally, the closest option to home: wealthy family or friends. It can be a solution to collect part or all of the funding from acquaintances. However, be aware of the consequences, as unexpected (payment) problems can always arise, which can affect your personal relationship.