Real Estate Talk:
Commercial financing

Commercial financing and location search for startups

By Joseph Marovitch

January 22, 2026

An individual, working a 9 am to 5 pm job on an hourly wage, has the idea in their head that there is more out there for them. The individual loves baking bread and thinks, “Why can’t I be my own boss and start a business I control?” There would be no limitations as to where I can take it. The sky is the limit.

Each day, they become more excited and start googling business plans until they finally put together a proper business plan and decide to consult a business financial planner at their bank. They present the plan to the bank, and the financial planner provides information and advice on sharpening the business presentation by outlining their mission, the product, the equipment required, the demographic they want to serve with their bakery, and the type of location needed. Included in the business plan are the startup costs for a rental location, equipment, staffing, utilities, inventory, and unforeseen miscellaneous expenses.

Following the startup costs are projected sales over the first three to five years, indicating how much product must be produced and how many baked breads must be sold to cover costs and make a profit. 
Finally, the bank approves the plan and the loan amount. However, to receive the loan amount, the individual must put down 15% to 20% or more, depending on their credit, work history, and the value of their assets as collateral.

It is better to pay more in the right location than struggle and spend on marketing in a less expensive location.

Now the potential entrepreneur begins their journey to find the right location, equipment suppliers, base products for baked goods, and staff. It is possible to find a rental unit with equipment already in it, which is ideal since so much money is saved on fixturing (preparing the location). However, there are other factors involved; does the location have ample foot traffic? Is it in an area with the right demographic? Is the area affluent?

A lower rent can mean a side street with no foot traffic, an area in which people cannot afford the product, or low public exposure. All these factors and more mean the rent is low, but the marketing expenses are much higher for social media and local newspaper ads. You will spend more over a longer period just so people will know who you are, what you sell, and where you are located.

One way or another, the potential entrepreneur will pay more with or without aggravation. It is better to pay more in the right location than struggle and spend on marketing in a less expensive location. As well, the right location provides an 80% chance of success, provided the product and service are outstanding.

The information in these articles is a summary. Should you have questions, comments or wish to discuss further, please refer to the comments section at the bottom of the page or contact me directly. As well, to view past articles, click here.

Next week, we will look at commercial leases.

State of the market

As the U.S. president spoke at Davos on January 21, several items, among many others, proved positive for world markets. By removing the threat of tariffs on European countries that might defend Greenland, this caused the Dow Jones Industrial Average to rise by 700 points. This, along with the withdrawal of military action in Greenland, reduced a lot of stress.

Through these words, for the moment, the fear of a supply chain slowdown, rising interest rates and inflation has permitted the Canadian economy to continue with less pressure and the Montreal real estate market to continue toward a balanced market.

As of today, January 22, 2026, the Montreal market is proving to be resilient. With consistent pricing and market conditions, buyers and sellers have ample opportunities due to current demand and supply. There appears to be a strong demand for moderately priced homes. Multi-residential property demand seems to be increasing among individual investors seeking second or third income streams and value appreciation. Condos are appealing to first-time homebuyers, individual investors and urban professionals working in the city.

‘In this market, the key to buying or selling is strategic pricing that considers location, condition, and marketing timing.’

According to the CMHC and certain real estate brokerage agencies, average value increases are expected to range from 2% to 3% in 2026. For first-time home buyers, demand is expected to increase property values by 5% to 7%. It should be noted that there is still a housing shortage and fewer new constructions.

The average days on market range from 60 to 90 days due to higher prices, lower household incomes, and higher-priced goods and services. In this market, with moderate growth and volatile external factors, the key to buying or selling is strategic pricing that considers location, condition, and marketing timing, as influenced by global and current Quebec politics.

Currently, the market is good for buyers and sellers; however, five or six months down the line depends on global events and the next Quebec election.

Have a great week.

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Feature image: Pikist

Other articles by Joseph Marovitch