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Getting the Capital You Need to Proceed: Creating a Successful Self-Storage Loan Package

Presenting a loan-application package to a lender is about more than providing requested documentation. It’s an opportunity to sell yourself as a self-storage owner and investor, and convince the financier you’re worth the risk. Here’s how to assemble as strong a presentation as possible to gain favor and win approval.

Anne Mino

October 27, 2023

6 Min Read
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Pursuing a self-storage loan can feel overwhelming, even for the most seasoned owners and investors. Your application is your first chance to make an impression on a lender as well as an opportunity to showcase your organizational skills, business acumen and industry expertise. Effectively assembling and presenting it can expedite the process and often boosts a lender’s confidence in giving approval.

The self-storage loan package isn’t the sole factor on which a lender’s decision will be based, but it provides valuable insight to your character and capabilities. Each financier uses their own criteria for approvals, but scrutinizing your application will be part of the process. Here’s how to create a strong showing that is most likely to result in the desired outcome.

Personal Items

Let’s begin with some of the personal items you’ll be expected to provide. This part of the package gives the self-storage lender a broad view of your personal financial health, creditworthiness and ability to repay the loan. The key components are:

Loan application. This serves as the initial point of contact and usually includes legal disclosures. The form requests basic information including project costs, physical location and desired loan amount. Clearly state how much you’re requesting and how you intend to use the proceeds. In the area that asks about ownership structure, divulge any partners, shareholders and ownership percentages. The application will also ask for work history as well as disclosure of any bankruptcies, pending legal action and previous arrests. It’s best to be honest and upfront about these early in the process rather than wait for them to come up later.

Business plan. Provide a detailed document that outlines your company goals, operation, market analysis, management team and growth strategies. We’ll do a deep dive on this in just a moment.

Financial statements. You’ll need to provide these for yourself and any businesses you own. Lenders typically require three years of tax returns, along with a profit-and-loss (income) statement that shows your revenue, expenses, and profits over a specific period. Include a balance sheet that offers a snapshot of your business assets, liabilities and equity at a specific time as well as a debt schedule that lists all the debts and liabilities for each enterprise.

Personal financial statement. This provides a snapshot of your financial situation at a specific point in time. It typically includes detailed information about your assets, liabilities and net worth. Keep in mind, most lenders want a complete picture of your household, not just your personal finances. You’ll need to provide details about all the bank accounts, retirement savings, stocks, and real estate your family owns.

Credit report. Lenders also look for a healthy income-to-debt ratio and carefully review your credit report. The score shows how good you are at borrowing and repaying debt. To maintain creditworthiness, check and correct any issues on your personal and business reports.

Bank statements. Lenders frequently ask for these as part of their process to confirm the availability of liquid assets.

To be fully prepared, file your taxes on time and have a digital copy of the documents at your fingertips. If a certified public account (CPA) prepares your financials, secure them early on. Don’t wait until tax season to reach out to them, as this may cause delays.

Business Plan

A well-written self-storage plan should clearly and concisely communicate your business concept, strategy and financial projections. It’ll be read by key individuals involved in the loan-approval process, including your lender, underwriter and credit officer. Here’s a detailed overview of what they want to see:

Executive summary. The lender wants to assess your understanding of the business you intend to operate. Explain why you’re interested in self-storage and showcase your commitment and passion. Elaborate on future growth potential, competitive advantages and long-term goals.

Market insights. Demonstrate that you understand current market conditions. For example, identify competitors within a three- to five-mile radius of the property and provide details about their occupancy, facility class, unit sizes and rates. This information should support your financial projections. In addition, include demographic data, highlighting any growth that might not be immediately apparent to someone unfamiliar with the region.

Financial projections. The lender will want to see a forecast of revenue and expenses based on your business ownership. Include an explanation for income increases and how you arrived at your expense predictions.

Operational strategy. Explaining how you intend to run the self-storage business is crucial. Share details such as the number of employees, third-party management (if applicable), key roles, daily operations, marketing plans and any software you’ll use. Mention whether you’ll accept online payments via the facility website and specific aspects of security like keycode gate access. Explain who’ll be on site. This part of the plan becomes increasingly more important the further you live from the property.

Management experience. Highlight any experience and abilities you have that’ll make you a successful self-storage owner. Share more than your resume. Detail your skills and achievements, and explain how they’ll make your facility thrive. Writing about yourself can be difficult, so ask friends and family for help articulating your strengths.

In essence, your business plan should serve as a blueprint that convinces the lender of the loan’s viability while instilling confidence in your ability to manage and repay the debt. It’s a critical document that can push the decision in your favor.

Completing the Puzzle

A well-organized application package can have a profound impact on your self-storage loan decision. Each lender will have a method to capture your documents, which usually involves uploading items to a secure portal. Being thorough and organized expedites the process and helps the lender make an informed decision more quickly.

Think of loan package as a puzzle. Every item requested plays a pivotal role in forming a complete picture of your request, so provide all the pieces! Allocate time and attention to the process. Be mindful about the documents you submit including file names and format, with a preference for easily accessible PDFs.

Keep your financial records organized and readily available, and present the business deal convincingly. Remember, the lender will evaluate you as an individual as well as the self-storage business, so strive to make a positive impression. Consistently showcasing your best self is crucial to achieving approval.

Anne Mino is senior loan officer for Live Oak Bank, a subsidiary of Live Oak Bancshares Inc. Headquartered in Wilmington, North Carolina, the company serves small business owners in all 50 states. Anne joined the company in 2013 as a member of the marketing team. With a background in finance, marketing and business ownership, she’s committed to helping clients navigate the loan-application process. She’s also a self-storage owner and investor. To reach her, call 910.409.1830; email [email protected].

About the Author(s)

Anne Mino

Self-Storage Loan Officer, Live Oak Bank

>Anne Mino is senior loan officer for Live Oak Bank<>, a subsidiary of Live Oak Bancshares Inc. Headquartered in Wilmington, North Carolina, the company serves small business owners in all 50 states. Anne joined the company in 2013 as a member of the marketing team. With a background in finance, marketing and business ownership, she’s committed to helping clients navigate the loan-application process. She’s also a self-storage owner and investor. To reach her, call 910.409.1830; email [email protected].

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