Thread: How do you finance a facility?

Id like to get into this business, but i assume that you need good bucks to start a facility. banks arent loaning more than 70% of the loan, being alone at it. How do you go about to starting this business.
Starting small would be the best bet.

Ivan - there's a thread about SBA financing another page deep in this area... hopefully this link can also get you there: SBA financing question?

SBA Financing is one way to get financing for a project that would not otherwise be able to qualify for financing. Many of our customers are using it. Feel free to contact me if you have more questions.

Steve
Marketing Manager
Trachte Building Systems

Thanks Steve, i will check the link out

I don't know much about the sba loans but for a typical loan you are going to have to have about 25% of the cash up front. And some banks will not let you go it alone, they may want partners, basically so they have more people to go after if it fails. If you are new to the business and your pockets are not too deep then you definatly want to start small and work your way up from their. You may want to consider buying an existing property, at least that way you have should have positive cashflow from day one. If you build you will have negative cashflow for a while, could be anywhere from 6 months to 3 years or more, but you will have built a facility exactly the way you want it with the ammenities you want.

Hi Ivan, You are right you need the first 25% plus. Typically the bank will consider the cost of the land as your equity. I have built three self storage and each time I was pleasantly surprised by the banks.

In one case I partnered with a land owner so we had a built in equity which limited our initial cost. In another case I had to come up with 25% for phase one but the bank paid for 100% of phase 2. A good business plan that includes all the facts & figures will help you figure out what you need and make a good impression with your bank. On my web site i provide some preliminary numbers to help you get started. Feel free to contact me if you have nay questions @ selfstoragemarc@gmail.com

Considering the current economic issues and low U.S. dollar exchange rates ; are foreign investors an option ?