Self Storage Business Loans up to $300,000
Need financing? We’ve helped thousands of self storage businesses do just that. We can approve you for up to $300,000 within 48 hours to help you purchase a location and stock it with the appropriate equipment. So apply now with no obligations, no impact on your credit score, and no fees.
Self storage business loans are means for investing capital in your self storage business. These facilities represent a growing segment of commercial real estate, perhaps buoyed by the trend of Americans moving away from densely-populated and urban centers toward suburbs and smaller cities.
Business owners in the self storage industry need to put all the available tools into their toolbox. Otherwise, they risk falling behind the competition or missing out on opportunities. Let’s explore how you can leverage business loans of up to 300,000 for your self storage business.
What Are Self Storage Business Loans?
Loans for self storage business owners can provide the capital needed for various projects. Even though the idea seems relatively straightforward, this is a niche industry, and you need to understand the types of loans and financial products available for your business.
What Can Self Storage Business Loans Be Used For?
Self storage business loans can help you access liquidity you don’t have on hand. What you do with that liquidity is up to you, so long as it conforms to the terms of your loan.
For many self storage business owners, a business loan can be used to:
- Acquire an existing facility or expand their own. Your lender may sometimes even be able to help scout properties or help you through the process.
- Construction. Consider that if you have an existing space to convert into a self storage warehouse or another major construction project, you might not want to fund it out of your working capital.
- Business Technology. Like any other business you will need technology to accept and process payments, POS systems, security systems, temperature control, etc.
- Cash on hand. A business loan can help you defer the payment for your capital improvements while keeping your cash on hand for the daily needs of your business, like writing paychecks, paying for repairs, and staying on top of your bills and other overhead.
Self Storage Business Loans Funding Options
Traditional small business loans are a tool that’s advantageous for self storage business owners. They’re simple installment loans, usually with a fixed monthly payment and a relatively short term between twelve and sixty months.
Small business loans can be ideal if you need short-term cash for doing a needed maintenance project like replacing your rolling door system or hiring staff to manage the warehouse. Just make sure you’ll have the liquidity to pay off the loan in the short term.
If your need is more equipment-based, you can consider financing the project with an equipment loan. The equipment you purchase will usually serve as the collateral for the loan, meaning you’re not signing anything you already own away. This setup is ideal if access to the new equipment increases your revenue, as it pays for itself over the term of your loan.
For instance, if you use an equipment loan to purchase an electronic access system that allows you to remain open 24/7, with a minimum workforce and more paying customers, the extra income offsets the loan.
For self storage facilities, where startup costs for warehousing can be high but static, there is a lot of appeal to a cash advance. Merchant cash advancesare also an option for a growing business. This type of loan allows your business to borrow against your future earnings, paying the money back through a percentage of your sales.
Business lines of credit are also available for modest projects that don’t require masses of financing. The approval processes are often fast and straightforward. However, your annual revenue will determine the amount of cash you’re eligible to borrow, and you usually need to have been in business for at least six months, if not longer.
For instance, if you need to add six outdoor storage lockers to meet sudden demand, use a line of credit to quickly get the money you need before you miss out on the potential business.
SBA loans, or Small Business Administration loans, are another option for self storage financing. TheSmall Business Administration has a variety of SBA loans that your self storage business can take advantage of if you’re eligible. For instance, if you need funds to purchase fixed assets, land, or renovate your warehouse space, you can use SBA 504 loans. These loans have a cap of $14 million and terms of up to 25 years.
There are also other SBA loan programs. For instance, if you’re performing new construction, renovating, or expanding your self storage company, an SBA 7(a) loan for commercial real estate might work. As a bonus, you don’t need industry-specific experience or a proven investment portfolio to qualify, unlike a conventional loan.
Tips to Qualify for Self Storage Business Loans
To qualify for a loan, you will need to prepare your self storage business information for your lenders. Any lender will examine your business using the five Cs of loan analysis:
- Capacity (AKA Cash flow)
At a minimum, you should make sure you have all your information ready to go in an electronic format. Ensure your document bundle includes a personal financial statement, a YTD financial statement for your self storage business, three years of personal and business tax records, and a written plan for your self storage outfit with more than three years of projections.
The more you can demonstrate the ability to pay the loan back and not just your need for it, the more likely you will receive funding. You should also try to verify that you have a credit score over 650, two years or more in business, and the ability to pay a 10% down payment if needed.
Pros and Cons of Self Storage Business Loans
There are upsides and downsides to taking out a loan for your self storage business.
Self Storage Business Loans Pros
- Multiple types of loans from which to choose.
- Different structures and terms that best suit your self storage business.
- Access to large amounts of capital, sometimes quite rapidly for established self storage businesses.
- Lower interest rates are available depending on your loan structure and credit history.
- Business lines of credit are typically easier to qualify for than traditional loans.
Self Storage Business Loans Cons
- You may have to navigate extensive prerequisites to qualify for your loan.
- The rate you pay will largely depend on your credit history.
- Lenders tend to prefer an established self storage business over a recent startup.
Frequently Asked Questions for Self Storage Business Loans
Some questions about self storage loans are quite common.
What Challenges Might I Face Qualifying for a Self Storage Business Loan?
Getting a loan for your self storage business can be challenging if you have a spotty credit history. It may also be quite tricky if you’re experiencing cash flow problems.
Can I Get a Self Storage Business Loan With a Bad Credit Score?
You can. But, the rate you pay will probably not be as favorable as that of self storage loans for someone with better credit history.
Do Self Storage Business Loans Require Collateral?
Many self storage business loans require collateral. But, you can also take out a line of credit or see if you qualify for a loan without collateral. Check out the SBA’s Preferred Lender Program to see if there’s a lender near you who can help you navigate the process.
How Hard Is It for Self Storage Businesses to Get Loans?
In general, it’s fairly easy to qualify for self storage loans for your business, but you will have to do some work. First, you’ll have to provide both business and personal financial and tax records. Then, once you’ve compiled all the information, consider shopping multiple lenders for the best deal. That’s smarter than typing ‘small business loans Oklahoma self storage’ into your web browser and taking the first loan you qualify for.
How Much Money Does It Cost to Start a Self Storage Business Loans?
It can cost as much as $50 per square foot to build new self storage facilities. That means you’d need about a million bucks to open a 20,000 square-foot self storage facility.
Funding Your Business Is Our Business
Self Storage Business Loans Can Help Grow Your Business
For owners, self storage loans are a means to an end. Before you start thinking about creative ways to use the money, focus on the quantitative needs of the business. Instead of thinking about what would be nice, consider only what investments might increase your return.
Better access, more electronic monitoring, and more units will increase your revenue and increase the appeal of underwriting your loan. If you stick to your plan and come prepared, qualifying for and receiving a self storage business loan will be easy. Then it’s up to you to get the most out of it.
Don’t Allow a Lack of Funding
to Hold your Business Back
It’s Time To Move Your Business Forward!