SBA SELF STORAGE FINANCING
Loan Guidelines for Self Storage Property Financing
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
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