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Preparing a Self-Storage Loan-Request Package: Making Approval Easy for Your Lender

By Neal Gussis Comments
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Property Operating Performance

The meat and potatoes of your loan request-package, this section demonstrates that the property has the historic and future operational ability to sustain the requested financing. This section should include:

  • Year-end financial results for the prior two years
  • Trailing 12 months income and expenses (presented monthly)
  • Occupancy statistics for past 36 months
  • Pro forma income and expense statements for next 12 months
  • Current summary gross potential income report
  • Current tax bill

You absolutely must present this information in an organized fashion. Remove non-cash items such as depreciation and either remove or explain non-recurring or non-business related expenses.

Ultimately, each lender will establish a net operating income amount that it will use to establish a loan amount. If you are acquiring a property, the pro forma becomes essential because the expense structure is likely to be modified, and the anticipated income may be different based on the owner’s proposed business plan.

Competitive Landscape

Your loan request should demonstrate that you are well-positioned among your self-storage peers. The competition in most markets is generally those facilities located within a 3- to 5-mile radius. The lender will want to see what the competition is charging for units sizes similar to those offered at your property. You will need to “shop” your competition to obtain this information. You may want to describe multi-tiered pricing, as many operators offer various price points for the same size units. Provide the lender with explanatory comments on price/quality variations and competitive locations.

Make or Break!

Having structured hundreds, maybe thousands of self-storage loan requests over more than 20 years, I can confidently proclaim that a well-organized, professionally prepared loan request will result in obtaining more favorable lender responses and, ultimately, more aggressive terms. Make the right impression at this point and the resulting financing can contribute to improved cash flow for years to come.

Neal Gussis is a principal at CCM Commercial Mortgage, a mortgage-banking firm that secures financing for self-storage owners nationwide. The company works with an extensive network of capital providers and has funded more than $1 billion in self-storage transactions. For more information, call 847.922.3750; e-mail; visit .

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