What to put in your storage loan package

So you have found a lender with a good loan program and you are ready to submit an application for your self-storage acquisition or development project. To ensure the greatest likelihood of success, you need to assemble a complete and complete package. The easier it is for the lender to review and access information without having to ask a bunch of questions, the more likely it is that they will seriously consider your agreement. What you don’t want is for the package to appear flawed or disorganized.

Below are tips on what to include in your application when applying for funding. These are the items a lender will appreciate receiving.

Borrower Information and Summary

Your loan application will contain a lot of information about you, your self-storage business, the property on offer and the financing you are seeking. To get started, the lender will want the following:

  • Your personal financial statement and the real estate schedule
  • A curriculum vitae indicating your experience in owning, developing or managing an income property and, more specifically, self-storage
  • Recent credit report or score
  • If the borrower is an entity and the last balance sheet (the organizational documentation of the entity can be provided upstream or later in the process.)
  • The last two or three years of federal, personal, and entity tax returns (Include K-1 tax returns for all entities owned.)
  • Amount requested (If you wish, you can include amounts to cover closing costs.)
  • Whether it’s a purchase or a refinance (if it’s a purchase, you will need to provide a purchase agreement, escrow instructions, and a preliminary title report. this is a 1031 exchange, you will need to add your 1031 hosting statement.)
  • The term requested (this varies from three to 10 years or more.)
  • Desired amortization, 15 or 30 years
  • If it is a cash refinancing, the purpose and use of the funds
  • Your recourse preference (Loans are normally recourse, meaning that personal guarantees are required; but loans with a lower loan-to-value ratio, or certain types of lenders, sometimes allow non-recourse or partial options. )
  • Your Preference for Prepayment Penalties (Better rates often come with long prepayment penalties. Many borrowers do not want a penalty or a low penalty for flexibility.)

Property details

A pre-assessment is always helpful in this section, but if you don’t have one, you can provide a detailed description of the self-storage property. This should include:

  • Physical address
  • Description of the location (facade, entrance and exit, signage, traffic counting, etc.)
  • Photos of the interior, exterior and amenities of the property
  • Year of construction
  • Zoning
  • Total gross and net square feet
  • Type of construction
  • Number of buildings and floors
  • Number of indoor and outdoor units as well as sizes
  • How many units are air conditioned
  • Number of elevators
  • If there is a residence on site
  • Demographic information
  • Number of parking spaces for customers
  • Number of parking spaces for vehicle storage, if applicable
  • Amenities available, such as a closed vehicle or RV garage, RV dump or wash station, electrical outlets, pickup and delivery service, fire sprinklers, retail sales, etc.

Real estate finance

These will be the key to your loan application. Missing or inaccurate information could push your request down the reject pile. Your goal is to show the lender the historical and future operational capacity to maintain the requested financing. This section will include:

  • Details of income and expenses of the property: Include reports for at least the last three years, as well as the year to date through the last month. Explain anything large, unusual, or one-time, for example, a new roof or the purchase of management software.
  • Summary of current rents: This report should include the following for each self storage unit size.
    • Number of occupants, vacant and unavailable (physical occupation)
    • Total area (for example, 100 5 x 5 units equals 2,500 square feet)
    • Market, contract and actual rent (economic occupation)
  • Occupancy history: Include the previous three to five years on an annual basis. Again, include any anomalies that might have occurred.
  • Year-end management reports: If available, they will display a summary of the age of accounts receivable and other relevant information.
  • Additional structures: If the property contains office or retail tenants in separate buildings, provide the lease or lease summary so the lender fully understands how those spaces might affect the storage property.
  • Discounts: Provide information on any concessions you offer to new customers or tenants who have a previous discount, especially if they expire.
  • Property taxes: Provide your most recent invoice.

Construction requests

If the funding you are requesting is for new self-storage construction, you will need to provide the following additional information:

  • The feasibility study (If you don’t have one, just provide the property description from the first section of the package.)
  • Detailed construction budget (hard / soft / finance costs)
  • Cost of land and date of purchase
  • Construction schedule
  • Pro forma lease
  • Pro forma income statement over 3 to 5 years
  • CV of the builder or contractor
  • Management plan (Will you oversee day-to-day operations or hire a third-party management company?)
  • Renderings and site plans for the project

SBA Requirements

Small Business Administration (SBA) loans have their own package requirements in addition to the above items. You will need to provide a summary including a statement of intent, business plan and financial statements. The declaration of intent will include:

  • Information about your loan application
  • A written business plan and description
  • A story on how the loan will positively affect your business
  • A statement on how you, as a business owner, have already invested your time and money in making the business successful

The business plan does not need to describe your all strategy. It can just include key snippets:

  • A description of your business
  • A prediction for the future of your business
  • Information about your product or services
  • How the sales and management team is organized

Then provide financial statements that show you are able to repay the loan and how you are going to pay it off. You must share:

  • Cash flow statements (income and expenditure)
  • Income statements (income statements)
  • Balance sheets (business value or equity)
  • Personal financial statements (personal net worth including debts)

Each SBA lender will evaluate the above summary to ensure that you meet their unique character, capacity, and collateral requirements. There are also other eligibility conditions. In general, the SBA requires that you meet the following criteria:

  • All business owners have a credit score of 680 or higher.
  • You have a personal or commercial guarantee that is a high percentage of the value of the loan application.
  • You have been in business for at least two years.
  • The business is profitable.
  • You have no debt, default or default.

If you are applying for a 7 (a) SBA loan, you must prove that the owner has already invested personal time and money and that the business:

  • Is small (500 employees or less)
  • Is engaged in a qualifying industry, non-vice
  • Operates for profit in the United States
  • Has a real need for a loan
  • Complies with SBA objectives

Before assembling your SBA loan, it is important to know how much financing your business needs and exactly how you are going to use that money. In addition to the above, you will need to complete and sign various forms. Make sure everything is organized and clearly documented, and keep the following points in mind:

  • Make your request short and easy to read, concise. Make sure it stays on topic.
  • Explain how the lender will get their money back.
  • Present positive and reasonable projections for the growth of the business.
  • Emphasize the strength of management. Staff play a major role in the success of self-storage, so take note of your team’s strengths and the role they will play.
  • Proofread and edit! You must proofread, edit and proofread your documents before submitting them. This includes your financial documents!


Today’s loan officers have to review hundreds of self-storage financing applications. It’s your job to make sure yours not only lands at the top of the review list, but gets approved as well. To do this, provide a complete, organized and engaging package. Be clear about your goals and funding requests, and you’ll win the favor of your lender. Good luck with much success!

David Smyle is vice president of the San Diego-based company Southwest Pacific Real Estate Services (PSRS), a commercial mortgage banking services company founded in 1972. It represents life insurance companies, banks, private equity and other credit facilities seeking investments in secured real estate assets. Prior to PSRS, Smyle was the owner and president of commercial mortgage brokerage firm Benchmark Financial for 16 years and spent 12 years in commercial banking. To reach him, dial 858.522.14111; E-mail [email protected].

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