Private Banking Direct Commercial Real Estate Loans
Self Storage
Conforming Loans
Self storage loans are typically used to finance the purchase, renovation of self storage facilities. The most popular self-storage loans are traditional bank loans, CMBS, Life Company loans, SBA 7a loans for commercial real estate and SBA 504 loans.
How Self Storage Financing Works
Self Storage loans are used to space out the total cost to build, or acquire storage facilities, over a 20-30 year period. Self-storage lenders generally look at the operations financial performance, value of the real estate, the local market and the credit profile of the borrower.
The qualification requirements for each of the main options only have slight differences. For all three of them, you will typically need to be a prime borrower with some collateral. Usually if you meet the qualifications for one, you will most likely meet the qualifications for the others. Typically we look for:
- Debt Service Coverage Ratio of 1.20, or greater.
- Cash down payment of at least 15%, but can be as high as 30%
- Credit Score of 650 or greater
- Show competency to operate facility
- No recent bankruptcies, tax liens, or foreclosures within 5 to 7 years
New Construction Loan Options:
Typically construction costs can range is from $1,000,000 to $50,000,000. SBA loans are especially good for self-storage facilities because you can finance all of the construction interest and up to 2 years of loan payments. SBA will finance up to 5 million per one borrower. Market studies are critical for a lender to take an interest in doing a loan.
Acquisition Loans:
Acquisition loans are needed when you’re looking to acquire an existing self-storage facility. If you are buying a self-storage business for the first time, chances are you’ll need to use the SBA or have more of a down payment. These loans can be fixed from 5 to 15 years and be amortized over 25 to 30 years. Rates will range depending on market timing and property condition.
Renovation Loan:
It’s common within the industry to reconfigure existing self-storage facilities. If you have an influx of customers wanting to rent out room, but your available units are being used, you may want to reconfigure some units to make more available.
Renovation loan size can vary greatly. This is mostly dependent on what type of facility you have and the extent of the remodeling needed to be done. At E3 Capital Funding, we have great bridge programs to help you with your success!
Learn More
This is a content preview space you can use to get your audience interested in what you have to say so they can’t wait to learn and read more. Pull out the most interesting detail that appears on the page and write it here.
Hard money self storage loans
Additional Information
E3 Capital Funding finances commercial self storage loans nationwide up to $20 million. Using direct private money, we are able to underwrite your project fast and get a pre-approval letter within about 24 hours and fund the deal within about 5-7 days. E3 Capital Funding realizes the complexities of financing commercial self storage loans.
- Commercial self storage loans available nationwide in metropolitan areas
- Loan sizes starting at: $200,000
- Max LTV: 75%
- Purchase, refinance, cash-out refinance, rehab
- Interest only: 8.5% – 10.5%
- Term: 6 months – 24 months
Commercial self storage loans are provided for self storage and mini-storage properties that are stabilized and are located in high traffic metropolitan areas. Construction should be concrete block, brick, or wood framed. Preference is shown towards single story facilities unless a drive-up access is provided.
How Self Storage Loans Work
How to finance a self storage facility
Self storage loans are usually commercial real estate loans. E3 Capital Funding provides short term reliable financing through bridge loans typically 6, 12, or 18 months while traditional financing is secured. For self storage loans, we generally look at the business’s financial performance, value of the real estate, the surrounding market, and your credit profile to make a lending decision. Because we use direct lending, we typically are able to make this decision within 24-48 hours and provide you with a pre-approval letter. Then we are able to fund the loan within about 5-7 days.
- Loan collateralized by real estate – no business only financing
- Prefer high traffic metropolitan areas
- Loan approvals based on value of real estate rather than borrower credit score and financials
Our successful track record is closely linked to our ability to make immediate lending decisions based on our highly disciplined underwriting approach. The emphasis on in-house loan origination allows our borrowers to move forward with confidence on their Self Storage Unit loans.
