Self storage

searcher profile

April 01, 2023

by a searcher in Boston, MA, USA

Have any Searchers used SBA funding for self storage facilities/businesses? It seems much of the value in these facilities is in the real estate they occupy and not as much in their annual revenue. For example a $3,000,000 ask with $170k NOI. Obviously it varies greatly depending on market. This is just an example in my market.

4
10
184
Replies
10
commentor profile
Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA
Yes, you can use SBA financing to buy self-storage. The difference is self-storage is viewed as a special-use property and since most of the value is in the property itself, the required down payment is typically 15% instead of 10%. You can also use the SBA 504 loan program for self-storage, which will provide for a fixed rate versus the SBA 7A loan program. The majority of commercial banks participate in the SBA 504 loan program, whereas only a few participate in the SBA 7A loan program. So you have more lender options. Lastly, the SBA 504 loan program does not eat up your SBA availability the same way the SBA 7A loan program does. If you would like to discuss all of your options, I would be more than happy to do so at any time. You can reach me here or directly at redacted Good luck.
commentor profile
Reply by a searcher
from Virginia Polytechnic Institute and State University (Virginia Tech) in Blacksburg, VA, USA
Yes. Can confirm your take. You need multiple to make it worth your while. For what it’s worth, it’s the easiest business to operate that I’ve ever run across. Still, your numbers suggest a bad deal. If you decide to pull the trigger I recommend Live Oak Bank. They know this business better than anyone.
commentor profile
+8 more replies.
Join the discussion