Extraordinary Service,
Exceptional Results
INSIGNIA Financial Services seamlessly provides self-storage owners and investors fast, efficient access to a wide variety of financing solutions with flexible and various length terms, including ground up construction and SBA 7(a) and 504 loans.
Performance
We are client-centric and performance driven dealmakers. Your success is our success.
Specialization
We're seasoned lending professionals with thousands of loans funded.
Transparency
We provide a transparent engagement, diligence and closing process.
Certainty
Capitalize on more opportunities with greater certainty of execution.
Financing Overview
Whether your goal is to acquire, construct, or expand your self-storage business or investment portfolio, we have the expertise and reliability to deliver.
We are a reliable lender with significant lending and investment experience, a vast network of relationships, and the ability to source, structure and underwrite even the most complex transactions.
- Bridge & Interim Loans
- CMBS alternatives
- Permanent Financing
- Absentee Owners
- Owner-Operators
- Passive Investors
Discuss your needs with an expert
Commercial Loans for Self-Storage Properties
In recent years, self-storage facilities have become a staple investment strategy for many real estate investors, large and small and remains one of the most stable forms of commercial real estate investment, filling a growing need for millions across the United States.
Finding the Perfect Fit:
Choosing the right financing option for your self-storage business hinges on a thorough assessment of your unique needs, goals, and financial standing. The team of lending experts at INSIGNIA Financial Services is here to guide you through every step of the process, ensuring you secure the financial fuel that propels your self-storage journey to new heights.
Let’s explore two of the most sought-after financing options for self-storage ventures: the SBA 7(a) loan, and the SBA 504 loan.
Permanent Financing
INSIGNIA Financial Services provides permanent financing options for the recapitalization and acquisition of self-storage properties nationwide. Leveraging our relationships with regional banks and institutional lenders enables our clients to seamlessly purchase or refinance an existing self-storage property. Permanent financing is designed to meet immediate and long-term investment requirements.
Repositioning a Self-Storage Property
INSIGNIA Financial Services also offers bridge financing for the repositioning of existing self-storage properties and for self-storage property conversions (converting a vacant retail or office property into a self-storage property). With endless value-add opportunities, experienced real estate investors are well supplied with capital to maximize returns on their self-storage facility investments.
Self-Storage Property Types
We offer an extensive array of financing solutions for self-storage properties including loans for drive-up, single-story properties; modern multi-story properties; climate controlled properties; and even specialty properties (storage for cars, boats, wine, and documents).
Two of the most sought-after financing options for self-storage ventures:
The SBA 7(a) loan, and the SBA 504 loan
Fueling your Ambition with SBA 7(a) Loans:
The SBA 7(a) loan reigns supreme as the most popular SBA financing option for self-storage businesses. This potent financial engine allows eligible businesses to secure up to $5 million to fuel a variety of growth-oriented endeavors, including:
Purchasing or expanding self-storage property: Breathe life into your expansion plans by acquiring land or adding more units to your existing facility.
Acquiring an established self-storage business: Take over a thriving operation and leverage its existing customer base and infrastructure to propel your brand forward.
Purchasing a leased property: Transform leased space into a fully-owned asset, solidifying your long-term foothold in the market.
Investing in cutting-edge technology: Upgrade your operational efficiency and enhance the customer experience with innovative tech solutions.
Refinancing existing debt: Streamline your finances and potentially secure more favorable terms with a strategic debt consolidation move.
Why Choose the SBA 7(a) Loan?
Several factors contribute to the widespread appeal of SBA 7(a) loans among self-storage businesses:
Flexible repayment terms: Enjoy the peace of mind of a long-term repayment schedule, typically ranging from 5 to 25 years.
Reduced upfront investment: Borrow up to 85% of the project cost, lowering the initial capital outlay required.
Government-backed security: Benefit from the partial guarantee provided by the SBA, potentially making it easier to qualify for the loan.
Unleashing Potential with SBA 504 Loans:
The SBA 504 loan, also known as the CDC loan, presents another compelling option for businesses aiming to fuel their long-term growth through strategic real estate or equipment acquisition. This loan program facilitates:
Purchasing existing buildings or leased property: Secure a permanent home for your self-storage business or unlock the full potential of leased space by acquiring ownership.
Investing in growth-propelling technology or equipment: Enhance your operational efficiency, expand service offerings, or elevate the customer experience with cutting-edge tools.
Constructing new buildings or renovating current facilities: Build your dream self-storage facility from the ground up or breathe new life into your existing operation with strategic renovations.
As low as 10% down for total project financing, including the purchase of land with ground-up construction or the purchase of an existing building with renovations.
All costs associated with construction or renovations can be included in the loan (no break-out required). Contingencies and soft costs may also be included.
Below-market FIXED interest rates with payments fully-amortized over 25 years, no balloon
No additional collateral required: Projects usually secured by the subject property utilizing an “as proposed” appraisal evaluation.
Why an SBA Loan is a Good Fit for Self Storage
An SBA loan is a good fit for the self-storage industry for several reasons:
Flexible Usage: SBA loans offer broad flexibility in their usage. Whether you are looking to acquire land, construct new facilities, renovate existing units, purchase equipment, or refinance existing debt, SBA loans can work for any of these situations.
Extended Repayment Periods: Given the nature of the self-storage business, it might take time before a new facility becomes profitable, especially if there’s a ramp-up period to reach optimal occupancy rates. The extended repayment terms of SBA loans, which can range up to 25 years for real estate, offer business owners more manageable monthly payments and better cash flow.
Lower Down Payments: Traditional commercial real estate loans might require a significant down payment, sometimes upwards of 20% or more. SBA loans, on the other hand, often have lower down payment requirements.
Competitive Interest Rates: Since the SBA guarantees a portion of the loan, it reduces the risk for lenders. This often translates into more favorable interest rates for borrowers compared to conventional loans. Over the long term, this can lead to significant savings for a self-storage business.
Accessibility for New Entrepreneurs: One of the barriers for new entrepreneurs in the self-storage industry can be stringent lending requirements from traditional banks, especially if they lack a substantial track record. The guarantee provided by the SBA can make lenders more open to funding newer entrepreneurs.
Growth and Expansion: With the self-storage industry showing consistent demand, especially in growing urban and suburban areas, there is a constant opportunity for expansion. SBA loans can provide the necessary capital for operators to capitalize on these opportunities, be it through the establishment of new facilities or the expansion of existing ones.
Economic Stability: The self-storage industry is often considered recession-resistant. Even in economic downturns, people require storage solutions during life transitions such as downsizing, relocations, or temporary job assignments. This stability makes the sector appealing for lenders, especially with the added security of an SBA guarantee.
Conventional Loans: A Solid Choice for Established Businesses
For self-storage businesses seeking financing, conventional loans offer a reliable and straightforward option.
Banks and credit unions provide conventional term loans for self-storage businesses. These loans come with competitive rates and flexible terms, making them well-suited for established businesses with strong financials, occupancy, and stable debt service.
Qualifying for conventional financing on your self-storage business will require 25% to 35% equity and typically at least a 1.20x in-place debt service coverage ratio for the proposed loan and usually 90% or greater physical occupancy.
Bridge loans for self-storage
Bridge loans for self-storage properties generally range from $1 million to $10 million. A bridge loan, typically with a term of 6 to 48 months, enables temporary financing until a permanent loan can be obtained.
Bridge loans are ideal for self-storage facilities that are undertaking renovation, expansion, or require turnaround due to occupancy or financial deficits.
Contact us today for a free consultation and let us craft the perfect financing solution for your thriving self-storage business.
Contact Us
The team at INSIGNIA Financial Services is available to discuss your real estate or small business lending needs and we’re available to answer any questions you may have about our financing solutions.
Send us a secure message using the form below.
Operations Center
1020 Milwaukee Ave, Suite 230
Deerfield, Illinois 60015