Top Self Storage SBA Lenders
The self-storage industry has been growing rapidly, driven by increasing urban density and a greater need for personal storage solutions. With more people seeking dedicated spaces for their belongings, the demand for self-storage units is at an all-time high. If you’re considering entering this market or expanding your existing self-storage business, securing the right SBA loan is a crucial step to success. Here, we present the top SBA lenders for self-storage loans, along with detailed insights on the types of loans available and how to apply for them.
Top Self Storage SBA Lenders
| Rank | SBA Lender | Location | # of Loans | Average Loan Amount | Average Rate |
|---|---|---|---|---|---|
| 1 | Live Oak Bank | Wilmington, NC | 42 | $2,156,560 | 9.1% |
Recent Self Storage Loan Activity
| Year | Quarter | # of Loans | Average Loan Amount | Average Rate |
| 2024 | Q2 | 37 | $1,666,216 | 9.1% |
| 2024 | Q1 | 25 | $1,450,848 | 9.4% |
| 2023 | Q4 | 25 | $1,890,480 | 9.4% |
| 2023 | Q3 | 31 | $1,696,968 | 9.3% |
Note: Most SBA loans are variable-rate loans, and the rates listed above represent the initial interest rate at the time of loan closing. The rates can fluctuate based on changes to the federal funds rate set by the Federal Reserve.
Why the Self Storage Business is Booming
The self-storage business has experienced tremendous growth, with over 60 million square feet of new storage space added in recent years. The pandemic further reinforced the demand for self-storage as more people needed extra space for belongings they could no longer keep at home. Urban areas, in particular, are seeing a surge in demand for storage units, providing a great opportunity for entrepreneurs to enter this market.
Owning a self-storage business can be a smart move due to its relatively low operating costs and potential for passive income. Tenants are responsible for maintaining their individual units, and business owners primarily manage security and general upkeep. Additionally, self-storage businesses can supplement their income by selling related products like packing materials, insurance, and locks.
Benefits of Owning a Self Storage Business
- Low Operating Costs: Minimal maintenance and staffing requirements.
- Additional Revenue Streams: Sales of packing materials, insurance, and more.
- Flexibility in Pricing: Month-to-month rentals provide flexibility to adjust pricing.
- Steady Demand: Self-storage facilities are highly sought after, especially in urban centers where space is limited.
Best SBA Loans for Self Storage Businesses
Whether you want to expand, renovate, acquire, or construct a self-storage facility, SBA loans are a great option to secure the necessary funding. Below, we cover the primary SBA loan programs available for self-storage businesses.
1. SBA 7(a) Loans
The SBA 7(a) loan program is one of the most versatile options available for those looking to enter or expand their self-storage business. With a maximum loan amount of $5 million, SBA 7(a) loans can be used for a variety of purposes, such as:
- Acquiring real estate for a new storage facility.
- Funding the construction or renovation of storage units.
- Purchasing an existing self-storage business.
- Buying additional real estate to expand an existing facility.
- Working capital or refinancing existing debt.
- Buying out a partner from your self-storage business.
Key Features of SBA 7(a) Loans for Self Storage
- Maximum Loan Amount: Up to $5 million.
- Flexible Uses: Ideal for construction, acquisition, expansion, or refinancing.
- Variable Terms: Loans for real estate acquisition can have repayment terms up to 25 years, while loans for other purposes have up to 10 years.
2. SBA Express Loans
If your funding needs are smaller or more urgent, SBA Express loans are a great alternative. With a faster approval process and a maximum loan amount of $500,000, these loans are well-suited for existing self-storage businesses that require quick access to capital.
Key Features of SBA Express Loans
- Fast Approval: Typically processed within a few weeks.
- Loan Amount: Up to $500,000 for working capital or equipment purchases.
- Interest Rates: Rates generally include a spread of up to 6% over the prime rate.
How to Apply for an SBA Self Storage Loan
Obtaining an SBA loan can be a lengthy process, but partnering with an experienced SBA lender can make all the difference. It’s crucial to work with a lender who understands the self-storage industry and has experience with SBA loan applications.
Steps to Apply:
- Determine Your Funding Needs: Understand how much funding you need and what it will be used for. This could include construction, acquisition, or purchasing equipment.
- Choose the Right Loan Type: Decide whether the SBA 7(a) or Express loan fits your business needs.
- Connect with an SBA Lender: Partner with an SBA-approved lender who is familiar with the self-storage industry. This will make your loan process smoother and increase your chances of approval.
- Gather Documentation: Prepare financial statements, tax returns, business licenses, and a comprehensive business plan.
- Submit the Application: Work with your chosen lender to complete and submit your SBA loan application.
Why Choose GoSBA Loans?
GoSBA Loans specializes in helping self-storage business owners find the right SBA lender. Our network includes lenders experienced in the unique needs of the self-storage industry, ensuring you have access to the best loan options available. Whether you need a large 7(a) loan for new construction or an Express loan for immediate capital needs, we’re here to guide you every step of the way.
Ready to Get Started?
Contact GoSBA Loans today to see how we can assist you in securing the financing you need for your self-storage business. Visit gosbaloans.com or call 1-855-381-6448 to speak with a specialist.
Ishan Jetley
http://gosbaloans.comIshan Jetley is the owner of GoSBA Loans. I have assisted 100's of businesses with their business loans. I specialize in SBA financing for working capital, real estate and business acquisitions.