SBA Loan Information
As of October 1, 2010 the SBA has opened up their programs to self storage businesses (the business type was previously excluded).
Here's a summary of the SBA loan programs that are now available to fund self storage operators:
- Use 7(a) for adding on to an existing site or refinancing, or new construction.
- Up to 25 year terms.
- Up to $5 million loan amounts.
- A minimum of 10% equity is likely required. Bankers that we've spoken with tell us that cash flow is the most important consideration.
- Must be personally guaranteed.
- To get a loan, find a local bank that is an SBA Preferred Lender. This helps speed up the paperwork process. We don't have a list of SBA Preferred Lenders, but odds are that one of your local banks are participating in the program.
- The SBA backs 75-90% of the loan to reduce risk to the lender.
- Normally there is a fee tacked on to SBA loans which is a few percent of the loan amount, added onto the amount borrowed.
SBA 504 CDC Loan Program
- This is for funding new construction/new sites.
- The loan amount can include land costs.
- Contact a "CDC" (Community Development Corporation) to get started with this type of loan. The local CDC will work with a lender to fund the project.
- Directory of CDC organizations.
If you want to learn more or are ready to act on a self storage project that you’ve been considering, contact us today.