Funding a Business Relocation

A lease is ending, the neighborhood has changed, you have outgrown the space or a better location came up. Whatever the reason, moving a business is one of the more disruptive things you can do. Customers have to find you again, equipment has to come down and go back up, and your team has to keep working through it.

The invoice from the movers is often the smallest number in the project. This page walks through the full set of costs, how to protect revenue during the transition and how to fund the gap between leaving the old place and getting the new one running.

It is general information. For lease terms, permits and tax questions, involve your attorney, accountant and the local authorities.

Add up the full cost of moving

Start with the obvious items: movers or trucking, packing materials, new lease deposit and first month's rent, and any broker or legal fees. Then add the less obvious: build-out or tenant improvements, utility hookups, new signage, internet and phone setup, new permits and licenses, address changes and printed materials.

Do not forget equipment that cannot be moved safely, specialty installation and the cost of disposing of what you will not take. A line-by-line budget with a contingency prevents most of the unpleasant surprises.

Run an inventory of everything that touches your address: bank accounts, merchant accounts, insurance policies, licenses, vendor accounts, online directories, tax registrations and legal documents. Missing one can lead to returned mail, delayed payments or a lapse in coverage, so a checklist saves real headaches.

• Lease deposit, first month and legal review
• Build-out, signage and utility setup
• Movers, rigging and specialty equipment handling
• Permits, licenses and insurance updates
• Marketing and notices about the new address

Plan for overlapping rent and downtime

It is common to pay two rents for a while. Your old lease may run past the day you leave, while the new space needs time for improvements before you can open. Negotiate the move-in date, a rent abatement period or an early termination right with both landlords where possible.

Estimate lost revenue during the move. Even a well-planned weekend relocation may cost a few days of sales, and a longer closure will cost more. Include that shortfall, plus fixed costs that continue, in the funding you need.

Consider the effect on employees. A longer commute may cost you good people, and replacing them is expensive. Talk to your team early, and think about transitional support if the new location is meaningfully farther away.

Protect your customers and revenue

Tell customers early and often. Update your website, search listings, social profiles, email signatures and vendor accounts before the move date. For businesses that depend on walk-in traffic, a new location may reset your visibility, so plan promotions and signage to help people find you.

Consider a phased move for businesses that cannot close. Keep operating from the old site while you set up part of the new one, and shift in stages. It can reduce downtime even if it adds some complexity.

Check the new location before you sign

Verify zoning, permitted use, parking, accessibility, landlord obligations for repairs and the cost of utilities. Inspect the condition of heating, cooling, electrical and plumbing, since these can become surprise costs. Ask about the length of the lease, renewal options, rent increases and what happens if the landlord sells the building.

Have an attorney review the lease, particularly any personal guarantee. A good space on bad lease terms can become a long-term burden.

If you are staying in the same market, compare the total occupancy cost per square foot, including common-area charges and taxes, rather than base rent alone. Two spaces with the same advertised rent can differ widely in what you actually pay each month.

Funding options

Relocation costs are often covered by a mix of savings and funding. Working capital can handle deposits, moving costs and the overlap period. A term loan or equipment financing may suit build-out and new equipment that will serve for years. Match the repayment length to what the money buys.

Take care with products that begin pulling payments immediately if your revenue dips during the move. Build a conservative forecast, and keep a reserve for the weeks after you reopen when sales may rebuild slowly.

Hold some of the funding in reserve until the new site is open and stable. Surprises are common in the final weeks of a move.

Working with Fidelity Funding

Fidelity Funding is a broker that connects you with funding partners instead of lending directly. A short application and soft credit pull begin the review, and a funding specialist goes over options with you. Decisions can often come within hours and funding sometimes arrives within about a day after approval, but terms vary and nothing is guaranteed.

Bring your move budget, the new lease terms and recent bank statements. When you have the numbers, start your application and let a specialist help match the funding to the project.

This article is for general information only and isn’t financial, legal or tax advice. Funding approval, amounts and terms are set by funding partners and depend on underwriting.