Loan Guidelines for Self Storage Property Financing

Pre-qualifying Criteria:

 

  • Cannot be in a flood zone.

  • At least 40,000 square feet of rentable space unless in a large metropolitan area where a smaller facility may be considered.

  • No facility older than 10 years.

  • Must demonstrate a demand driver: e.g. military base, large apartment complexes or university nearby.

  • Acquisitions – at least 15% of the total project cost (acquisition plus closing costs plus other requested uses) must be provided by the borrower as cash equity; any remaining equity can be seller financing provided that no more than 10% of the project cost can be provided by seller financing that has a repayment schedule attached. The balance of seller financing must be on COMPLETE stand-by for the life of the loan.

  • No start-ups or construction.

  • Debt Service Coverage must be at least 1.25x in each of the prior two years and the current interim period.

  • Maximum LTV 70%

 

Loan Size:                                               USDA: $250,000 – $5,000,000; SBA: $250,000 –                                                                              $5,000,000

 

Eligible Locations:                                  Nationwide

 

Loan Term Amortization:                     USDA: Maximum 30 years; SBA: Maximum 25 years

  

Collateral:                                               First position mortgage as certified by title search                                                                        and title policy on property.

 

Loan Escrows:                                       The borrower may be required to contribute monthly

                                                                 to an escrow account for real estate taxes and

                                                                 property insurance.

Appraisal:                                               Complete summary appraisal required.

 

Environmental Screen or Phase 1:     Required.

 

Eligible Principals:                                  U.S. citizens, or permanent resident aliens.  Majority

                                                                  principal owners cannot be on probation or parole.

 

Recourse:                                                Every loan will be personally guaranteed by any

                                                                  shareholder with 20% or more ownership in the

                                                                  company.

 SBA SELF STORAGE FINANCING 

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