As a small business owner, you may or may not need a physical space. Some people can do all of their work remotely. However, many other businesses require a storefront, storage space, or other brick-and-mortar location. Unfortunately, rent is one of your biggest fixed costs as a small business. The good news is that there are ways to get free rent for your business.
Get Free Rent for Your Business Before You’ve Signed The Lease
The Business Journals explains that the best time to negotiate for free rent is before you’ve signed the lease on a commercial space. After all, the door is wide open for negotiations at this point in time. Once you’ve signed a lease, you’ve agreed to the terms. Therefore, you have less wiggle room. Similarly, you might negotiate at the time when your clease comes up for renewal. So, before you sign any lease, consider these things:
Come With a Broker, Ready to Negotiate
You aren’t going to get free rent for your business just out of the kindness of your landlord’s heart. In other words, they aren’t going to offer it to you. You have to ask. When it comes time to sign the lease, show up to the table with negotiation at the forefront of your mind. Moreover, you should strongly consider bringing a savvy real estate broker with you. After all, these professionals know all about how to negotiate a commercial lease. Therefore, they’re going to be able to help you get free rent for your business or any other concessions you might seek.
Ask For Abated Rent
This is a variation on free rent. Basically it means that you and the landlord agree on a set period of time at the start of the lease during which you won’t pay rent. Typically you’ll make up the difference with higher rent during the subsequent months. So, it’s not exactly free rent. Rather, it’s delayed rent. Nevertheless, having no rent up front can be a big help when first starting a business in a new space. Don’t overlook this option.
Get Free Rent for Your Business After You’ve Signed The Lease
Obviously, there are also reasons that you might need to ask for free rent even though you’ve already signed the lease. In fact, you might be inside a business space for years before situations arise in which you need to ask for rent. For example, let’s say that there’s a roof leak and your landlord hasn’t repaired it, thereby damaging your ability to do work. Or, on the other hand, perhaps an external disaster (such as the COVID-19 pandemic) forced you to shut doors for a period of time. You weren’t earning money and therefore couldn’t pay rent. In these situations, you’ll work with your landlord. You might also have to call in an attorney to assist you in negotiating to get free rent for your business.
Read Your Lease
Marketplace points out that there might be clauses in your lease that outline exactly how to deal with such situations. In fact, if you worked with a savvy broker as suggested, then you might have written this stuff into the lease. For example, it might say right there in the lease that you get free rent for your business if certain emergencies occur. Therefore, you simply need to follow the rules laid out in the lease to claim that free rent.
Read Your Insurance Policy
Likewise, your business insurance might offer some solutions to dealing with unpayable rent in case of emergency. Read through that. Talk to your insurance provider to see if they have solutions for you.
Look Into Financial Assistance
Depending on your situation, there might be a variety of options open to you to get rent assistance. For example, during the COVID-19 pandemic, the SBA, PPP loan programs, and many other local programs offered funding to assist tenants in paying their business rent.
If you can get funding through various local programs to cover your rent, then you’ve effectively gotten free rent for your business. You may not need to do anything else. Either way, though, knowing all of the options available to you for paying the rent will help you out whether or not you opt to apply for them.
Talk to Your Landlord
Hopefully there’s something in your lease or insurance policy that will help you out. If that’s the case, then you just need to inform your landlord in writing of the situation.
However, in most cases, you’re unfortunately on the hook for rent. This is when talking to your landlord might be the only way to negotiate to get free rent for your business.
Come to your landlord with a plan in place. This is where knowing your options can help. For example, you might say, “I’m planning to apply for an SBA fund. However, it won’t come through until two months from now. Even then, it won’t cover the entirety of my rent. Request free rent for your business for two months and reduced rent thereafter.
If you’ve been a great tenant, your landlord might be willing to work with you. Moreover, if they’re in a position where the storefront would lay empty otherwise, then they might have an urge to assist you.
Speak to a Small Business Attorney and/or Renter’s Aid Program
You’ve done all of your homework. Unfortunately, you can’t get your landlord to agree. What’s next? You don’t necessarily have to shut doors immediately. Instead, see if you can get additional professional help.
You might want to speak with a small business attorney. The SBA, SCORE, law clinics at law schools, and other organizations offer free or low-cost consultations to assist you with these types of issues. They may be able to point you in the right direction.
Likewise, there are renter’s assistance organizations available in many cities, counties, and states. If you have one in your area, then you might turn to them for advice. Sometimes the people in your network can help you with solutions that you haven’t been able to come up with your on your own.
- Owning a Small Business: The Office
- SMBX: Crowdfunded Bonds for the Small Investor
- 10 Cons of Working for a Small Business
If you enjoy reading our blog posts and would like to try your hand at blogging, we have good news for you; you can do exactly that on Saving Advice. Just click here to get started.