The self-storage industry is growing, presenting profitable investment opportunities with various tailored financing options. This post explores these financing options for relocatable self-storage units, providing insights and practical advice from experts. We interviewed some industry experts to learn more. Here are some key insights and practical advice on financing relocatable self-storage.
Advantages of Relocatable Self-Storage Units
Relocatable self-storage units offer flexibility and adaptability, leading to diverse financing options from banks, including conventional loans and government-backed programs. These units can be easily moved to meet changing customer needs. Choosing the right financing is crucial for long-term success in self-storage businesses. Our interviews with senior lenders reveal that tailored financing solutions are available for both new builds and expansions, making the process straightforward with proper preparation.
- Flexibility and Adaptability: Easily placed and moved to accommodate changing customer needs.
- Enhanced Customer Experience: Cater to evolving market demands.
- Diverse Financing Options: Banks offer customized loan solutions. These are based on credit profiles and specific requirements.
Financing Insights from Industry Experts
Dylan Towey from MMP Capital highlights the importance of customization in self-storage financing, offering tailored programs like an 84-month financing option without balloon payments. He advises providing detailed information upfront to mitigate risks and streamline the approval process.
- Customization is Key: Offers a range of programs tailored to different credit profiles.
- 84-Month Financing Program: Extends affordability and eliminates balloon payments.
- Capital Lease Structure: Provides ownership of equipment from day one.
- Streamlined Approval Process: Quick turnaround times for clients with strong credit profiles.
Anne Mino of Live Oak Bank discusses financing options for relocatable self-storage units, emphasizing the need for understanding funding needs and avoiding over-leveraging. She highlights the importance of working with knowledgeable lenders to structure sensible deals.
- Types of Projects: Ground-up businesses, expanding existing businesses, and acquiring businesses.
- Understanding Funding Needs: Ensures borrowers are not over-leveraged.
- Knowledgeable Lenders: Helps avoid structuring deals with excessive debt.
Will Buchly and Will Jackson of Georgia Banking Company discuss various financing options and the resilience of the self-storage industry. They stress the need for tailored loan strategies, thorough planning, and providing detailed financial information to secure financing.
- Economic Resilience: Self-storage industry can reprice rents as often as monthly.
- Tailored Loan Strategies: Based on property and borrower goals.
- Thorough Planning and Due Diligence: Important for securing financing.
Customized Financing Options
Lenders offer customized financing options, including SBA loans, conventional loans, bridge loans, and more. Each option has distinct advantages, and working with experienced lenders can help find the best fit for specific business needs.
- Small Business Administration (SBA) Loans: Long-term financing with competitive interest rates. Intended for smaller operators.
- Conventional Loans: Flexibility and competitive rates for established businesses with strong creditworthiness.
- Other Financing Options: These include bridge loans, construction loans, hard money loans, mezzanine loans, merchant cash advances, and lines of credit.
Tax Advantages
Relocatable storage units classified as equipment can provide significant tax benefits under Section 179. This allows businesses to deduct the cost of equipment immediately, boosting the economy and helping small and medium-sized businesses grow.
- Classification as Equipment: Relocatable storage units are classified as equipment. They are not considered permanent structures.
- Section 179 Deduction: Businesses can use the cost of the equipment as an immediate expense deduction. They are often eligible for a 100% deduction after one year.
Due Diligence for Loan Approval
Owners should be prepared and organized when seeking financing, presenting comprehensive business plans with detailed information. Working with experienced lenders can streamline the process and increase approval chances, potentially using a combination of financing options.
- Comprehensive Business Plan: Detailed information demonstrates the viability of a venture. This instills confidence in lenders.
- Thorough and Accurate Information: Includes personal and business details. Also, collateral information, and financial statements.
- Research and Compare Financing Companies: To find the best fit for your self-storage facility.
The flexibility and adaptability of relocatable self-storage units make them a preferred choice in the industry. Understanding diverse loan options and engaging with knowledgeable lenders are crucial for securing favorable terms and ensuring long-term success, with tax advantages providing additional incentives.
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Order your self-storage units now and enjoy peace of mind for the peak storm season ahead. Make sure your storage solutions can withstand the test of time and provide reliable service to your clients. Work with a Boxwell representative to decide your ideal unit mix, custom colors, door configurations, and more. Your Boxwell storage units will be shipped flat packed and assembled fast with just a few dozen nuts, bolts, and basic tools. You will be ready to rent them in no time! For more information on how Boxwell can support your storage business, visit boxwell.co or call (303) 317-5850 for more information.
