Financing a Self Storage Business
Securing financing for your facility is one of the most important decisions you’ll make. Contact your local community bank – historically, this is the best source for financing a self storage facility – or contact a local commercial bank that you have a good relationship with.
With no history of performance, lenders are reluctant to finance new sites, so it’s essential to provide them with a professional and extensive loan package. Offer a complimentary proforma or sample loan package that you can modify to fit your deal.
There are three types loans for financing a self storage business:
Construction Loan – This is a customized loan package to get a loan to build your facility.
Refinance Loan – Once a facility is 80% occupied or higher, loans may be refinanced. This may be available at a better rate or terms, and offer the ability to draw cash from equity for expansion or improvements.
Acquisition Loan – This loan may be an option if an existing facility is being purchase, or money is necessary to acquire another piece of commercial property.
