Self Storage Business Financing
We have all heard about the sub-prime mess and how it is currently influencing lending practices. But what is happening in the commercial lending world? Well, a few weeks ago, we had a conversation with a commercial loan broker. It was an interesting conversation!
Here are some of the changes that have taken place over the last few years in the world of getting financing for a self storage buisness:
3 Years ago: Conduit loans were available for about 6%. These loans were available for facilities that would have a loan of $1,000,000 or more.
Today: This loan product is now available for 7% – 9%. The minimum loan amount has also been raised to $2,000,000.
3 Years ago: Local banks were offering financing to self storage facilities. Of course, the rate is highly dependent upon the bank and the relationship the bank has with the person applying for the loan, but generally speaking, these banks were offering an interest rate of 7.5% – 9.5%.
Now: Local banks are financing self storage facilities at 6%.
We have had a complete reversal in the last few years. I wonder what will be next?
Date: September 14th, 2008 @ 06:58
Categories: financing