Why the present is a great time to buy a comm'l. facility

Now is a great time for a small business to purchase its own facility, commercial building, condo or coop. Temporary tax incentives due to the Stimulus Package along with other factors make commercial facility acquisition more affordable than it has been in years. Under the Federal Stimulus Package's latest iteration- ARRA: * Small businesses get bonus depreciation this year. Instead of simply being able to depreciate the building evenly over the permitted years, 50% of the building cost (including any capital assets purchased) can be depreciated this year and the rest depreciated over time. * The bonus depreciation can be used even if it results in a loss this year. This can benefit the company because ARRA provides for enhanced carry back of losses (to offset prior taxes paid). For now, you can recapture taxes paid for five years back (instead of normal two years). * An alternative to the bonus depreciation is the 179 deduction where you can deduct 100% of the asset cost up front (maximum $250,000). You can only use this if you buy less than $800,000 in one year and, unlike the bonus depreciation, the 179 deduction cannot be used to create a loss. * ARRA provides for enhanced federal tax credits for energy efficient improvements/green initiatives. So, if that facility purchase involves energy/green renovations, there are incentives which will benefit the bottom line (NYS has credits available as well). In addition to the ARRA incentives, purchase of commercial facilities is further enabled by today's low real estate prices and historically low interest rates. While the drop in real estate values is not being celebrated by sellers, it certainly benefits proposed buyers. Conventional rates are in the single digits. And, subordinate financing programs such as the SBA 504 and New Market Fund are hovering around 5% (fixed for 20-25 years). Now is the time to lock into this value. Bottom line is that there is no time like the present when it comes to acquiring, and/or renovating a commercial facility. For information on how to finance that purchase with low cost financing visit www.gnydc.org. Roslyn Goldmacher is the president and CEO of the Long Island Development Corp. (LIDC) and the Greater New York Development Co. (GNYDC), Bethpage, N.Y.