Finding financing for a borrower looking to purchase or refinance a self-storage facility can be difficult, particularly if you’re a commercial broker working with a non-bankable borrower. However, there are small commercial mortgage lenders who can provide commercial mortgages for storage facilities. Below are several factors that you and your borrower need to be prepared to discuss with a lender.
- Your borrower’s credit: A borrower’s credit report is a key factor for a commercial mortgage lender when making a financing decision. Be sure that you provide the lender with a recent report. Be prepared to discuss any financial issues that appear on the report, and prepare your borrower to do so as well.
- The property: It’s important to know the facts about the storage facility being pledged as collateral. How big is the property? Where is it located? How many storage units are there and how many of them are occupied? This information is important to a lender.
- Use of funds: The commercial lender will want to know how your borrower means to use the loan. Whether they plan to purchase a storage facility, or refinance to improve an already existing business, the more information you and your borrower provide the small commercial lender, the easier it will be to get your borrower the storage facility financing that they need.
- Ability to pay: Any commercial mortgage lender will to want to make sure that a borrower can make their monthly payments. Provide your lender with relevant financial information, such as a profit and loss report or an income and expense report so that they can calculate the property’s ability to cash flow. Again, make sure you know the storage facility’s occupancy rate.
When working to get your borrower a commercial mortgage for a storage facility, it’s important to provide your lender with the necessary information. You and your borrower should be prepared to discuss your borrower’s credit situation, the property they plan to use as collateral, their ability to repay the loan and the use of funds with the lender. If you are both able to have conversations with a lender about these details, your borrower has a better chance of getting the self-storage property mortgage they need.