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With the onslaught of ever-increasing rates over the past 18 months, many owner-operators have been searching for a viable solution to purchase or refinance their facility. Most products have virtually doubled in rate compared to those available through the middle of 2022.<\/span><\/span><\/span><\/p>\n A new SBA product has arrived at 7.9% for a 5-year term on a 25-year amortization. The rate is nearly 3% lower than the average and the amortization is 10 years longer than most bank notes alleviating cash flow shortfalls that undermine most owner\u2019s cash flow.<\/span><\/span><\/span><\/strong><\/em><\/p>\n Currently, the market rate for most SBA products is PRIME+2% or more, putting rates north of 10% on average compared to 3-4% in 2022. Since SBA is one of the few high-leverage (90-100%) products available, even with the higher rates it is very much still in demand throughout the country. SBA offers high loan-to-value, credit score exceptions and more flexible underwriting than most banknotes.<\/span><\/span><\/span><\/p>\n Self-storage facilities must be owner-managed, preferably non-kiosk and well-maintained. They can be located anywhere within the contiguous United States within relative proximity to major metro areas. LTV\u2019s can go as high at 90-100% which is great for those with management experience but not necessarily gold-lined pockets.<\/span><\/span><\/span><\/p>\n Let\u2019s say Sam\u2019s Self Storage is for sale in Nashville, TN.<\/span><\/span><\/span><\/em><\/p>\n Sam is ready to retire and there is a buyer, Joe Jones who has been managing Sam\u2019s Self Storage facility for over 10 years. He\u2019s helped Sam to get the business profit in the black and the place now has a mile-long wait list for new customers. There\u2019s the most important piece of the puzzle…EXPERIENCE!<\/span><\/span><\/span><\/p>\n The second most important thing of course is the dollars and cents of a real estate purchase and that\u2019s where SBA is a great tool for those with limited cash or limited existing equity.<\/span><\/span><\/span><\/p>\n The last part of the financial picture is the bottom line.<\/span><\/span><\/span><\/p>\n Let\u2019s look at Sam\u2019s Self Storage…he must be doing something right since Sam has the place at 100% occupancy with a wait list but when you look at his profit and loss statement, the past year shows a loss of $178,000.00!<\/span><\/span><\/span><\/p>\n Most buyers would just walk away but Joe knows what happened in 2023 and can shed light on the accounting.<\/span><\/span><\/span><\/p>\n If you\u2019re searching for financing, whether for refinance or purchase of a self-storage facility, SBA can provide a path to financial success and close your loan.<\/span><\/span><\/span><\/p>\n\n
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