Self-storage financing can help investors and operators purchase, build, renovate, refinance, or expand a storage facility.
Among the available self-storage loan options, loans backed by the U.S. Small Business Administration (SBA) may offer longer repayment terms and lower equity requirements than some conventional financing options.
The two SBA programs most commonly considered for self-storage are SBA 7(a) loans and SBA 504 loans. The right choice depends on whether you are buying an existing business, financing real estate, paying for improvements, or combining property costs with working capital.
What are SBA Self-Storage Loans?
Live Oak Bank, a self-storage lender, explains that an SBA loan for self-storage or another business is made by a bank or other lender, but the federal agency partially guarantees the loan. This enables a lender to extend a loan to a borrower who otherwise might find it hard to secure a loan with attractive terms.
Benefits of SBA loans compared with traditional loans include:
- Flexible equity and collateral requirements.
- No restrictions imposed by loan covenants.
- Longer terms. While a traditional loan might come with a 10- to 20-year amortization but a five-year balloon mechanism, an SBA loan might offer both an amortization and payoff period of 25 years.
What Types of SBA Loans are Available?
In most cases, two types of SBA loans are geared toward self-storage businesses: SBA 7(a) and SBA 504. Either type of loan can go toward the purchase of a self-storage facility.
SBA 7(a) Loans
The SBA 7(a) lending program is the SBA’s most popular lending option. This loan can extend as long as 25 years but normally tops out at 10 years, according to the Fundera lending platform. In addition, an SBA 7(a) self-storage loan can offer low interest rates, either fixed or variable.
In the context of self-storage, Cornerstone Capital Lending says an SBA 7(a) can be used to:
- Buy or expand a facility.
- Purchase a leased facility.
- Buy new technology for an expansion.
- Refinance current debt.
To qualify for an SBA 7(a) loan, according to Fundera, you usually must:
- Own a successful business or be trying to buy a profitable facility.
- Have solid personal and business credit, with a credit score of at least 680.
- Show an ability to responsibly handle cash flow.
- Meet SBA eligibility requirements.
- Come up with collateral.
Fundera warns that an SBA 7(a) loan can be tough to get, and the process might take about three months to complete. So, if you’re in the market for fast financing, the SBA 7(a) loan might not be the ideal choice.
Among the documents you might need to supply when you’re applying for an SBA 7(a) loan are:
- Profit-and-loss statement.
- Statement of financial projections.
- Personal financial statement.
- Income tax returns.
- History of loan applications.
- Business overview and history.
- Business license or certificate.
This kind of loan usually provides as much as $5 million in financing, with a typical down payment equaling 10% of the borrowed amount. The SBA guarantees 85% of a loan up to $150,000 and 75% of a loan over $150,000. The agency says the loans are ideal for buying real estate.
Learn more about self-storage business financing.
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SBA 504 Loans
Similar to SBA 7(a) loans, SBA 504 loans are backed by the federal agency; however, the loan programs operate differently. A fixed-rate SBA 504 loan is designed for the purchase, construction, renovation, or refinancing of commercial real estate, or the purchase of heavy equipment. Terms are 10, 20, or 25 years, with the loan amount usually capped at $5 million.
SBA 504 self storage business loans can be used to:
- Buy a facility.
- Buy leased property.
- Buy new technology or equipment for a facility expansion.
- Renovate a facility.
The SBA says 504 loans helps borrowers who can’t qualify for traditional financing.
“SBA 504 loans have revolutionized financing for self-storage facilities,” Forbes notes.
Criteria for an SBA 504 loan include:
- Credit score of at least 680 or higher.
- 10% down payment (although a 20% down payment is required in special cases).
- One job created or retained for every $65,000 borrowed.
- Tangible net worth of business that’s lower than $15 million.
- Average net income for business that’s less than $5 million after federal income taxes for two years before application.
- Realistic business plan.
- Relevant management experience.
“Generally, the project assets being financed are used as collateral. Personal guarantees of the principal owners are also required,” the SBA says.
Up to 50% of an SBA 504 loan comes from a traditional lender, such as a bank or credit union, and up 40% comes from a nonprofit community development corporation. The 10% down payment makes up the rest of the funding.
“The SBA 504 program is far superior to any other financing for self-storage property owners and should be at the top of the list of options,” self-storage lender LibertySBF declares.
How Do You Choose an SBA Lender for a Self-Storage Loan?
Many SBA self-storage loan lenders, both big and small, operate around the country. Cornerstone Capital Lending recommends choosing an SBA lender that offers:
- A streamlined loan approval process.
- Low down payments.
- Competitive interest rates.
- Experience working with self-storage businesses.
- An array of lending options.
- Proper certification to administer SBA loans.
More Answers to Your Self-Storage Financing Questions
How Much Does it Cost to Buy a Storage Facility?
The cost to buy a storage facility varies widely based on its location, size, occupancy, physical condition, unit mix, revenue, and growth potential. According to Cushman & Wakefield, the average U.S. self-storage valuations reached about $159 per square foot in the second quarter of 2025, although actual sale prices can range greatly.
The purchase price is also just one piece of your total investment. Self-storage investors should also budget for items like an appraisal, property inspection, environmental review, legal and lender fees, repairs, technology upgrades, insurance, marketing, and working capital.
Want to learn more? Read our article: Should You Build or Buy Your First Self-Storage Facility?
How Much Does it Cost to Start a Storage Unit Business?
The cost to start a storage unit business depends largely on whether you buy an existing facility, convert another property, or build a new facility from the ground up. A development budget may include land, site preparation, construction, permits, utilities, security, access control, management software, signage, insurance, marketing, and operating expenses.
Costs can also vary by building type. A single-story drive-up facility may have a different budget than a multi-story, climate-controlled property in an urban market. Before seeking self-storage financing, create a detailed project budget that includes both construction costs as well as expenses such as design, engineering, and professional fees.
Learn more about the cost of building a new facility, or get tips for starting your self-storage business.
How to Get a Loan to Buy a Storage Facility
Choosing the right self-storage business loan and financing strategy is crucial for the long-term health of your storage business.
To get a loan to buy a storage facility, start by calculating the full project cost and determining how much equity you can contribute. Lenders will typically review your credit history, financial resources, management experience, business plan, and the facility’s ability to generate enough cash flow to repay the debt.
You may need to provide financial projections, personal and business tax returns, bank statements, a purchase agreement, the facility’s rent roll, occupancy history, operating statements, and information about any planned improvements. An appraisal, property inspection, and environmental review may also be required.
Once you’ve figured out the type of storage unit financing loan you’re interested in, reach out to a lender that has experience in the storage industry to walk through your next steps.
Set Your Storage Business Up for Long-Term Success
Self-storage financing is just the first step. Before you can get your business running, you’ll need the right tools in place to help you stay organized, connect your operations to your marketing, communicate with your tenants, and control access.
Explore how Storable’s all-in-one platform streamlines operations, boosts occupancy, and drives revenue from day one.
