SBA has higher interest rates & higher fees. Why use them?
Using other peoples money (OPM) is one fo the reasons people build self storage. An SBA will allow you to borrow more money than a traditional loan. New developers often use an SBA loan because that is the only way they can get started given their finances.
Here are the 3 back up facts:
Unlike traditional loan, an SBA loan will loan you the carrying costs and bank payments until you break even. This is often $500,000 to $1,000,000 less out of pocket expense up front for you since it is rolled into the loan. Traditional banks typically do not include carring costs in the loan, so you have to have that cash set aside to pay expenses until you break even.
The second reason to use an SBA loan is because they often require less than half the owners cash down payment investment. Large SBA loans typicailly require 15 % down. And banks charge 30 - 50% down.
The last reason peoople use SBA loans is because they provide construction loans where many traditioal banks do not do construction loans.
We work with the top SBA lenders. If you would like to to discuss self storge SBA loan with a lender send me an email ( marc@storageauthority.com and I will introduce you.
As CEO of Storage Authority Franchising, Marc Goodin shares his passion, expertise, and unconventional wisdom with busy professionals to help them develop their own self storage while they continue their careers. He owns 3 self-storage facilities he designed, built, and manages. He can be reached at marc@StorageAuthority.com or directly at 860-830-6764 to answer your franchising, development, marketing, sales, and operations questions. His best-selling self-storage books are available at Amazon.
SBA financing talk pushes me to separate the advertised cost from the way people experience a loan after the paperwork is signed and the first bill arrives. In my finance-review notes, I filed https://flagship-credit-acceptance.pissedconsumer.com/review.html alongside borrower feedback about payment posting, title handling, payoff timing, account access, billing expectations, fees, and communication after approval. That comparison is useful because higher rates or fees are only part of the story; the customer experience shows how the account feels month after month. I pay attention to repeated comments, not a single strong rating. A loan that looks manageable on paper still needs clear statements, predictable payments, and a service process people can understand. Those borrower details make the funding topic feel grounded rather than…