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Small-Balance Lending for Self-Storage: Tips and Tricks for a Successful Transaction

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As with bank lenders, credit unions are typically located within the same market as the facility and want a relationship outside of the real estate loan. This may include deposits or additional lending opportunities.


  • There are no or limited prepayment restrictions.
  • Loans range from short to long term, with some offering 10-year options.
  • Fixed- and floating-rate options available.


  • The loans typically have some upfront “points.”
  • Credit unions are generally more relationship-focused, requiring a broader depository relationship.

Credit-Union Consolidators

Similar to credit unions, credit-union consolidators offer a wide variety of terms and rates that generally range from one to five years. These firms participate loans among smaller credit unions across the country that do not have their own real estate departments.

Where consolidators differ from standard credit unions is they’re solely transactional in nature and are not interested in a long-term relationship. They can also offer flexibility, financing properties with out-of-market (or state) borrowers—something local banks may not entertain. Transactions have the potential to take longer than average if participating credit unions take time to indentify.


  • Credit-union consolidators typically have no or limited prepayment restrictions.
  • They offer the ability to finance properties with out-of-market or state ownership.
  • Fixed- and floating-rate options available.


  • Loans typically have some upfront “points.”
  • Final approval is often dependent on individual participants, which lends itself to changes in the deal structure should they disagree with the consolidator's loan structure.

SBA Loans: 7a and 504a

The SBA offers self-storage owners small-balance loans in a wide array of options, including short-term loans through the 7a program and long-term options through the 504a program. SBA lenders also offer fixed and floating rates through both programs. Some banks have started offering a specific “small-balance 7a program” for loans under $350,000. This program allows for leaner documentation requirements, including a desktop appraisal, lower transaction costs and quicker approvals.

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