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Entice Lenders and Get the Money! What to Put in Your Self-Storage Loan Package

If you want to gain favor with lenders and get funding your self-storage project, you need to provide a comprehensive loan summary. Learn what to include to entice lenders and convince them to invest in you.

David Smyle

March 12, 2021

7 Min Read

So, you found a lender with a good loan program and you’re ready to submit a request for your self-storage acquisition or development project. To ensure the highest probability of success, you need to assemble a thorough, 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 he’ll look seriously at your deal. What you don’t want is for the package to come across as deficient or disorganized.

Below is guidance on what to include in your request when you apply for financing. These are the items a lender will appreciate receiving.

Borrower Information and Summary

Your loan request will include a lot of information about you, your self-storage business, the proposed property and the financing you seek. To begin, the lender will want the following:

  • Your personal financial statement and schedule of real estate

  • A résumé indicating your experience in the ownership, development or management of an income property and, more specifically, self-storage

  • Recent credit report or score

  • If the borrower is an entity, and the latest balance sheet (Entity organizational documentation can be provided up front or later in the process.)

  • The most recent two to three years of federal tax returns, personal and entity (Include K-1 tax returns for any entities owned.)

  • Amount being requested (If desired, you can include amounts to cover closing costs.)

  • Whether this is a purchase or refinance (If it’s a purchase, you’ll need to provide a purchase contract, escrow instructions and preliminary title report. If it’s a 1031 exchange, you’ll need to add your 1031 accommodator statement.)

  • The term being requested (This ranges from three to 10 years or longer.)

  • The amortization desired, 15 or 30 years

  • If this is a cash-out refinance, the purpose and use of funds

  • Your preference regarding recourse (Loans are normally recourse, meaning personal guarantees required; but loans with a lower loan-to-value, or certain types of lenders, sometimes allow for non- or partial-recourse options.)

  • Your preference regarding prepay penalty (Better rates often come with long prepay penalties. Many borrowers want no penalty or a low one for flexibility.)

Property Details

A prior appraisal 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

  • Location description (frontage, ingress and egress, signage, traffic count, etc.)

  • Photos of the property interior, exterior and amenities

  • Year built

  • Zoning

  • Total gross and net square footage

  • Construction type

  • Number of buildings and stories

  • Number of interior and exterior units as well as sizes

  • How many units are climate-controlled

  • Number of elevators

  • If there’s an onsite residence

  • Demographic information

  • Number of parking spaces for customers

  • Number of parking spaces for vehicle storage, if applicable

  • Available amenities, such as enclosed vehicle or RV storage, a dump or wash station for RVs, electrical outlets, pickup and delivery service, fire sprinklers, retail sales, etc.

Property Financials

These will be key to your loan request. Missing or inaccurate information could land your application in the reject pile. Your goal is to show the lender the historic and future operational ability to sustain the requested financing. This section will include:

  • Detailed property income and expenses: Include reports for at least the last three years, plus year-to-date through the latest month. Explain any large, unusual or one-time items, for example, a new roof or the purchase of management software.

  • Current rent-roll summary: This report should include the following for each self-storage unit size.

    • Number of occupied, vacant and unavailable (physical occupancy)

    • Total square footage (e.g., 100 5-by-5 units equals 2,500 square feet)

    • Market, contract and actual rent (economic occupancy)

  • Occupancy history: Include the previous three to five years on an annual basis. Again, include any anomalies that might have occurred.

  • Year-end management-summary reports: If available, these will show an accounts-receivable aging summary 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 will have a good understanding of how these spaces might affect the storage property.

  • Discounts: Provide information on any concessions you’re offering to new customers, or tenants who are enjoying a previous discount, especially if these expire.

  • Property taxes: Provide your most recent bill.

Construction Requests

If the financing you’re requesting is for new a new self-storage build, you’ll 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/financing costs)

  • Land cost and date of purchase

  • Construction timeline

  • Lease-up pro forma

  • Three- to five-year operating statement pro forma

  • Résumé of builder or contractor

  • Management plan (Will you oversee daily 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 items above. You’ll need to provide a summary that comprises a statement of purpose, business plan and financial statements. The statement of purpose will include:

  • Information about your loan request

  • A written business plan and description

  • A narrative about how the loan will positively affect your business

  • A statement about how you as the business owner have already invested your time and money into making the business succeed

The business plan doesn’t need to outline your entire strategy. It can simply include key excerpts:

  • A description of your business

  • A prediction for the future of your business

  • Information about your product or services

  • How the business and management team is organized

Next, provide financial statements that show that you’re able to repay the loan and how you’ll do it. You should share:

  • Cash-flow statements (income and expenses)

  • Income statements (profit-and loss-statements)

  • Balance sheets (business value or net worth)

  • Personal financial statements (personal net worth, including debts)

Each SBA lender will evaluate the above summary to ensure you meet its unique requirements of character, capacity and collateral. There are other eligibility requirements, too. In general, the SBA requires that you meet these criteria:

  • All business owners have a credit score of 680 or higher.

  • You have personal or business collateral that meets a large percentage of the value of the loan request.

  • You’ve been in business two or more years.

  • The business is profitable.

  • You have no debt obligations, loan defaults or delinquencies.

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

  • Is small (500 or fewer employees)

  • Is engaged in an eligible, non-vice industry

  • Operates for-profit in the United States

  • Has a true need for a loan

  • Is in line with SBA goals

Before you assemble your SBA loan package, it’s important to know how much financing your business needs and exactly how you’re going to use that money. In addition to the above, you’ll need to fill out and sign various forms. Make sure you have everything organized and clearly documented, and keep the following in mind:

  • Make your request brief and easy to read, brief. Make sure it stays on topic.

  • Point out how the lender will get its money back.

  • Present positive, reasonable projections for business growth.

  • Emphasize management strength. Staff plays a major role in self-storage success, so note the strengths of your team and the role they’ll play.

  • Proofread and edit! You need to reread, edit and proofread your documents before submitting. This includes your financial documents!


Today’s loan officers must review hundreds of self-storage finance applications. It’s your job to ensure yours not only lands on the top of the review pile but gets approved. To do this, provide a complete, organized and engaging package. Be clear about your financing goals and requests, and you’ll gain favor with your lender. Good luck for much success!

David Smyle is a vice president of San Diego-based Pacific Southwest Realty Services (PSRS), a commercial mortgage banking firm founded in 1972. It represents life insurance companies, banks, private capital and other credit facilities seeking investment in real estate secured assets. Prior to PSRS, Smyle was owner and president of commercial mortgage brokerage Benchmark Financial for 16 years and spent 12 years in commercial banking. To reach him, call 858.522.1411; e-mail [email protected].

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