First Class Travel Agency
Commercial Real Estate Financing First Class Travel Agency
Author: Valerie Mellema
Date posted: 05.15.23

A small travel agency located in the Midwestern United States had been running on a crew of only a few workers for well over a decade. The owners had always been passionate about travel, which is how they got started in the industry. The agency had done well in the past and many of its prior clients would come back when they needed to plan another trip. There was always this thought in the back of the owner’s minds about what this company could be if they allowed it to grow. However, for several years, that was nothing more than something they talked about and then put back away without moving forward.

The Time for an Expansion

 

With another agency moving into the same niche, the owners had another conversation about expanding and becoming a more full-featured agency. This time, they decided to do more than chat. They started looking into their options. Even moving forward with office space for the business would enable them to get much more done.

 

At this point, they weren’t entirely sold on whether this was the best option. However, they decided to do more research and come back to the conversation. The first step would be to find out how much it would cost to update their operation.

 

The Cost of an Office Space

 

The owners looked into the price of office space in their small city. They searched different locations nearby since they wanted to ensure it was easy to commute from their current home office to the new space. As they started to do this, the excitement about expanding began to increase.

 

In the end, the research indicated that the owners would need $200,000 to acquire an office that would give them the space they needed now, as well as some to grow on.

First Class Travel Agency

Which Type of Financing Is Right?

 

After the two had researched costs and talked more about expanding, they became more certain that now was the time to make the leap and move forward. It was clear that they would need financing to move forward. A traditional bank loan was a possibility but the duo wanted to look into other financing options as well.

 

Since the main point of financing was to get an office for the business, commercial real estate financing was on top of the list from the start. However, before deciding for certain, the owners did research into other options. In the end, a real estate loan turned out to be the best choice.

 

Benefits of Commercial Real Estate Financing

 

There were a lot of reasons to go with commercial real estate financing. The first is that it’s specifically for the purchase of property and designed to be ideal for that purpose. Payments are monthly and the cost is affordable with a long term length and low interest rate. On top of that, this financing option allows up to 90% loan to value, which creates great leverage.

 

The qualifications were easy for the owners to meet and they applied and were pre-approved for the financing. From that point, they knew they could expect funding within a few months. It was enough time for them to plan how things would work out when funding was available.

The Aftermath for the Travel Agency

 

As soon as the owners had access to financing, they were able to acquire a gorgeous building to use as an office. They’ve since put their own funds into equipping it and bringing in new employees. What was once a small business has become much larger and more successful. It wouldn’t have been possible without commercial real estate financing.

First Class Travel Agency
About The Author | Valerie Mellema

Valerie has over 16 years of experience as a professional writer of blogs, eBooks, articles and press releases, with a focus on finance and alternative lending. Valerie resides with her family in Texas and is passionate about her horses.

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