Fortunately, self-storage is and has always been an industry with strong fundamentals and consistent development. For nearly 30 years, the self-storage market has earned 3.5 percent annual returns, according to the New York Times.

Many lenders are interested in funding self-storage developments as a result of these encouraging results. However, there are no two business loan lenders alike. To properly finance your project, you must first understand your storage loan alternatives and how self-storage financing works.

To that end, we'll go through each of your financing alternatives and how they're usually put together.

Loans for Self-Storage

SBA lenders, credit unions, and banks, as well as alternative lenders, can provide self-storage company loans. You'll learn about these three types of lenders' financing options in the sections below.


SBA Funding

The SBA offers self-storage financing through its SBA 7(a) and 504 loan programs. Self-storage SBA 7(a) and SBA 504 loans are constructed the same way they are for any other eligible purpose.


The SBA partially guarantees the loan, which is made by a financial institution. Because of this partial guarantee, lenders can give SBA loans to applicants who would not otherwise be eligible. However, because of the low-interest rates on SBA loans, the application procedure is quite competitive.

Purchase property, extend or repair an existing self-storage facility, or restructure existing debt using an SBA 7(a) or 504 loan.


Bank and/or credit union loans

A credit union or bank can help you fund self-storage initiatives with a line of credit, a standard loan, or a construction loan.

It's worth mentioning, however, that many credit lines have limit amounts ranging from $100,000 to $250,000. Depending on the size of your self-storage operation, you may require more funding.

A company line of credit is also typically used for short-term financial requirements. The majority of credit lines have periods of seven years or less. That implies you'll have to pay off your line of credit promptly, which some borrowers may not be able to do. This will, of course, be less of an issue if your self-storage project is tiny.

Alternative Financing

Alternative lenders, including banks and credit unions, provide business loans or lines of credit for self-storage projects.

Any organization or individual that is not a typical financial institution, such as a bank or credit union, is considered an alternative lender. You'll most likely communicate with an alternate lender by phone and email.


Alternative lenders for self-storage finance provide the following advantages:

  • Streamlining the application procedure
  • Minimum credentials are lower.
  • Quicker funding

Alternative lenders also have the advantage of providing a diverse choice of funding solutions. You're not limited to a line of credit or a term loan with an alternative lender. You can investigate self-storage finance options such as:

  • Finance for accounts receivable
  • Hard cash loans
  • Loans for working capital
  • Bridge financing