Matthew Sexton

The loan-to-value (LTV) ratio compares the size of a loan relative to the value of the property being financed. Regardless of what type of loan you apply for, a lender will calculate the LTV ratio as part of the approval process. The maximum LTV ratio varies depending on the loan type and borrower qualifications. For example, some lenders will go up to a 100% LTV on an automobile loan, while mortgage lenders will usually keep a borrower’s LTV at or below 80%. In addition, lenders may offer well-qualified borrowers a higher maximum LTV to reduce the borrower’s out-of-pocket cost. Loan-to-Value (LTV) Formula Loan-to-value ratio is calculated by using a simple formula: Loan amount: This is the amount of money borrowed from the lender. Property’s appraised value: The valuation the lender assigns to the financed property. In the case of real estate, this is done by an independent, certified appraiser. In the case of equipment or vehicles, the lender will use valuation tools, such as NADA or Kelley Blue Book, to determine the value. Once you plug values into the formula and divide the two numbers, the result is expressed as a percentage. Example 1: If you’re purchasing a house valued at $200,000, and you borrow $160,000, the LTV equals $160,000/$200,000, or 80%. Example 2: If you want to borrow $30,000 to buy a car, but the valuation on the car is $25,000, the LTV equals $30,000/$25,000, or 120%. In this case, you’ll have to put money down to reduce the amount borrowed below the valuation amount. Why the LTV Ratio Is Important The loan-to-value ratio is important because it determines the down payment size, loan payment size, interest rate and, potentially, qualification status. Usually, you’ll want to keep your LTV lower because of the flexibility it gives you, but there are a couple of situations where a higher LTV is preferred. How To Lower Your LTV Ratio Because the LTV ratio formula is simple, it is easy to lower your LTV when shopping for a loan. To lower the LTV ratio, you should do one or both of the following: Make a larger down payment: The more money put down at closing, the less you’ll borrow and the lower your LTV will be. This will result in lower monthly payments and possibly a better interest rate. Look to purchase something more affordable: It could be that what you want is overpriced or is outside of your budget. If you find something more affordable or more correctly valued, it’ll be easier to get the LTV ratio small enough to be qualified. What Is Combined Loan-to-Value? Related to the loan-to-value ratio is the combined loan-to-value ratio. It is the ratio of all loans against a certain property divided by the property’s value. It is the same formula as the LTV, but instead of one loan, it includes all loans on the property. Combined LTV = Amount of loan A + Amount of loan B / Property’s appraised value Example: You’re looking to take out a $20,000 line of credit against a property that already has a $140,000 mortgage loan on it. The property is valued at $200,000. To calculate combined LTV, you would add $20,000 + $140,000 to get the total loan amount of $160,000. Then divide $160,000 by $200,000 to get an 80% combined LTV. Bottom Line When considering a loan application, the lender will calculate the loan-to-value ratio as part of the approval process. By understanding the LTV ratios associated with different types of loans before applying, you’ll be able to estimate the maximum loan available. This allows you to plan for the down payment that’ll be required. The lower the LTV, the lower the monthly payment, and potentially, the lower the interest rate. While it requires more cash down at closing, a lower LTV helps your monthly budget and makes a loan more affordable over time.

A commercial real estate (CRE) loan is a mortgage loan used to purchase, refinance, or renovate a commercial property. Many online and traditional lenders offer CRE loans with slightly different terms, costs, and required qualifications. A business owner should consider the purpose of the commercial real estate loan and find a lender that best serves that loan purpose. If more than one lender offers the loan, choose the lender with the rate and terms that best match your needs. The list below includes the best providers for commercial real estate loans and what each lender is best used for: : Best overall and for long-term owner-occupied commercial real estate loans : Best commercial real estate loans for multifamily projects : Best online platform for Small Business Administration (SBA) 7(a) commercial real estate loan providers : Best SBA 504 loans for larger projects where borrowers may struggle getting a conventional bank loan : Best conventional bank loans for prime borrowers who have a high net worth : Best for niche or high-risk industries. U.S. Bank: Best Overall Commercial Real Estate Lender offers several types of commercial real estate loans, including SBA loans. It’s the best choice for borrowers looking for long-term, owner-occupied real estate loans with terms of up to 25 years. However, with a minimum credit score of 700 required, U.S. Bank does have higher credit requirements than the other lenders on this list. Even though U.S. Bank only has physical bank branches in 26 states, mainly in the Midwest and western United States, its mortgage products are available nationwide through its website and local branches. In addition, even states without local branches have loan officers available locally to assist businesses with CRE loans. While you cannot apply directly through its website, you can submit your contact information through a web form or call a toll-free number to get the application process started. JPMorgan Chase: Best CRE Loans for Multifamily Projects touts itself as the nation’s leading multifamily lender, promising cost-effective financial solutions with a high-speed loan closing. The maximum loan amount for its CRE loans is $15 million, which increases to more than $25 million for multifamily projects. Newer businesses can benefit from JPMorgan Chase not having a minimum-time-in-business requirement. JPMorgan Chase requires an apartment building to have at least five units to be considered for multifamily financing. You can contact JPMorgan Chase through its website to get started. You can also submit documents securely online. If you wish to meet with a lender in person, there are 13 branch offices located throughout the United States. SmartBiz: Online SBA 7(a) Commercial Real Estate Loans is an excellent choice for SBA 7(a) commercial real estate loans. As there are many requirements specific to Small Business Administration loans, we encourage you to check out our article on SBA 7(a) loans before beginning the application process so you know what to expect. Rates on SBA loans tend to be lower than online lenders’ rates and traditional bank rates because of the SBA guarantee. You can get financing of up to $5 million for up to 25 years. One other advantage over a traditional bank loan is being able to have a loan-to-value of up to 90%, reducing the down payment required. There’s a prepayment penalty for loans with a term greater than 15 years if you prepay more than 25% of your loan in the first three years. The fee is charged against the amount you prepaid and is 5% for prepayments in year one, 3% in year two, and 1% in year three. You can enter your business’s information and go through a prequalification process on the SmartBiz website without impacting your credit score. Check out SmartBiz’s website to get more information or to begin the application process. Lendio: Best for SBA 504 Loans is an excellent choice for SBA 504 loans. An SBA 504 loan is a combination of two loans: one comes from a lender and one from a nonprofit lender known as a CDC. Both loans are closed simultaneously. SBA 504 loans are good choices because they offer up to $14 million in financing for up to 25 years. In addition, SBA 504 loans allow the borrower to go up to 90% loan to value, reducing the down payment compared to a traditional loan. Our guide on SBA 504 loans goes through the requirements and qualifications needed for the loan. Important guidelines to remember before applying for an SBA 504 loan for commercial real estate include: Property must be owner-occupied Jobs must be created Business must have a net worth of less than $15 million Lendio is a broker that can match you up with an SBA 504 lender that can help you get the right commercial real estate loan. Check out its website for more information. Wells Fargo: CRE Loans for Prime Borrowers Who Have a High Net Worth For commercial real estate borrowers looking for a conventional bank mortgage loan, is an excellent choice. Wells Fargo provides funding of up to $1 million for five and 10 years, although it can go up to 20 years for larger projects. One thing to be aware of is that Wells Fargo requires the potential borrower to deposit $1,000 when accepting the conditional approval of any loan or line of credit. It’s nonrefundable if the loan doesn’t close, but if the loan is closed, it’s applied to any applicable fees due at closing. Any unused portion of the deposit is credited to the borrower after closing. Also, if you pay the loan off within three years, there’s a prepayment penalty of 3% of the principal amount prepaid. Wells Fargo is a good choice for those looking for their first commercial real estate loan with no years-in-business requirements. You can apply through the Wells Fargo website or at your local branch. To get started, contact Wells Fargo to be set up with a lending specialist. Northeast Bank: CRE Loans for Niche Industries Despite being a traditional bank lender, closes and funds loans faster than most traditional banks. Northeast Bank funds a wide variety of industries, including: Hotels Gas stations Healthcare facilities Self-storage Skilled trades Retail Assisted living The company also offers both SBA and USDA loans. You can submit your contact information through Northeast Bank’s website or chat with them on the site. The company also has a toll-free phone number and email address to contact them. Reach out today for more information about Northeast Bank’s commercial real estate loan products. How We Evaluated Top Commercial Real Estate Lenders When comparing commercial real estate lenders, we examined the terms, rates, and costs of each of the lenders. We also looked at the variety of loan products offered, the time-in-business requirements, and the funding speed of each lender. Bottom Line While all of the companies on our list of the best commercial real estate lenders provide excellent products, each offers different maximum loan amounts with varying requirements, terms, rates, and conditions. Always compare different lenders and lending products to determine the long-term costs of a CRE loan and choose the one that works best for your business.

A portfolio loan is a mortgage loan that is held by the mortgaging company and not sold on the secondary market to the Federal National Mortgage Association (Fannie Mae) or the Federal Home Loan Mortgage Corporation (Freddie Mac). Portfolio loans help small business owners who cannot qualify for a traditional mortgage loan or who want to finance multiple properties on the same mortgage loan. The underwriting guidelines used by portfolio lenders can vary from lender to lender because the loans don’t have to conform with federal underwriting guidelines. This can mean higher rates and higher fees for borrowers. But, conversely, it can also mean allowing borrowers to have higher debt-to-income, loan-to-value, and loan size maximums. For borrowers looking for a portfolio lender that allows them to grow a large portfolio, is a good choice. CoreVest offers both an online application and a chatbot on its website, which can help you get the process started. CoreVest also offers an 800 number if you would prefer to speak to someone on the phone. Reasons to Choose a Portfolio Loan For Financing Because the guidelines for portfolio loans are set by the individual lenders and not by the federal government, the lender has a significant amount of leeway in the terms set for the mortgage. There are several ways this can benefit the borrower compared to going with a traditional mortgage loan: No limit on loan size: Because the loans aren’t sold on the secondary market to Fannie Mae or Freddie Mac, they don’t have to conform to the jumbo loan limits set forth by the federal government. This makes it possible for blanket loans containing multiple parcels of land to be financed into the same loan. Smaller down payment requirements: The lender can decide to finance as much of the property purchase as they desire, which means a borrower might need little to no money down at the time of purchase. The lender also might not require private mortgage insurance (PMI), which lowers the monthly payment. Borrowers with low credit scores are considered: The portfolio lender can decide the level of risk it wants to take with a borrower. Because of this, it can consider lending to borrowers with any credit score. However, most lenders still require credit scores above 620 for commercial or investment properties. Borrowers with subprime credit scores should expect to pay higher rates and closing costs. Borrowers with irregular income are considered: It can be difficult for self-employed borrowers to qualify for a traditional mortgage. Many lenders require at least two years of steady self-employment to qualify for a mortgage. A portfolio lender has more flexibility to work with a well-qualified borrower with irregular income, such as a farmer who might get paid on an annual or semi-annual basis. Borrowers with strong credit can get great deals: Because the portfolio lender holds the loan, it’ll want to strengthen its portfolio with as many high-credit-score loans as possible. This will strengthen the overall lending profile for the bank’s investors and federal regulators. Portfolio lenders will work with strong-credit customers by offering great rates, low down payment requirements, and higher debt-to-income maximums. In addition, borrowers can purchase properties that won’t qualify for traditional loan programs. Whether it’s the condition of the property or the type of property, portfolio lenders can step in and finance where traditional lenders cannot. For example, the following projects would be ineligible for financing with Fannie Mae but would be eligible for a portfolio mortgage: Projects that operate as hotels or motels Projects subject to split ownership arrangements Projects that contain multidwelling unit condos or co-ops Projects with property that’s not real estate Commercial space and mixed-use allocation (Fannie Mae limit is 35% of property used for commercial space or allocated to mixed-use) In addition, traditional mortgage lenders might be hesitant to lend on manufactured homes or homes that don’t have permanent foundations. A portfolio lender can decide to lend on those properties without worrying about being unable to sell the loan. If you decide to get a portfolio loan, check out our buyer’s guide, which includes a list of the best portfolio loan providers, including the costs, terms, and required qualifications for each lender. Reasons to Avoid Getting a Portfolio Loan While there are many advantages to a portfolio loan, it’s not always the best choice for financing. Here are some of the reasons to stick with a traditional mortgage instead of going with a portfolio loan: Interest rates can be higher: While lenders can offer borrowers great deals to go with a portfolio loan instead of a traditional mortgage, they also can charge higher interest rates. This is especially true of subprime credit borrowers and borrowers with high debt-to-income or debt service coverage ratios. Closing costs can be higher: Portfolio lenders can charge higher closing costs, especially origination fees. Because they don’t sell the mortgage on the secondary market, they might often want more money upfront to help with the lender’s cash flow. Again, the less qualified a borrower is, the higher the fees to help mitigate the risk to the bank. The lender might want to sell the loan down the road: If a portfolio lender thinks it might want to sell your loan sometime in the future, you’ll lose most of the benefits of going with a portfolio lender. It’ll need to be underwritten to the strict federal guidelines so the lender can sell it. Be sure to check your disclosures closely—a lender must disclose if it intends to sell your loan or its servicing at some point in the future. Fewer consumer protections: One of the biggest benefits of a loan underwritten by federal guidelines is the built-in protections for the borrower. By requiring a lender to meet its guidelines and issue required disclosures, the government protects a borrower from getting a loan it cannot afford. Loans that fall outside what’s considered a qualified mortgage may have fewer federal protections. Common Portfolio Loan Situations There are several common situations where a lender would keep a loan as a portfolio loan rather than selling it on the secondary market. Here are three common situations, common terms for each, and reasons why the lender would choose to keep it in its portfolio: Blanket Mortgage Portfolio Loan Terms & Costs Blanket mortgages allow a borrower to purchase multiple parcels of land on the same mortgage loan. Most of them are set up with release clauses that enable the lender to release parcels from the mortgage as they’re sold individually. Lenders will keep this in their portfolio because either the loan amount is too high or too many properties are being financed to sell on the secondary market. Most conforming loans limit the number of properties you can finance to 10. This type of loan is especially attractive for borrowers looking to build a subdivision of homes. The land can be financed in a blanket mortgage, and then parcels are released and sold as the houses are built. It keeps the builder from having to apply for a new mortgage for each separate property. A good lender for blanket portfolio loans is . CoreVest’s blanket mortgage product has terms of five, seven, or 10 years, with up to a 75% loan-to-value ratio. In addition, CoreVest offers both an online application and a chatbot on its website, which can help you get the process started. Jumbo Portfolio Loan Terms & Costs A jumbo portfolio loan is any mortgage loan that’s too large to be sold on the secondary market. The Federal Housing Finance Agency (FHFA) sets the jumbo limit annually. Any mortgage above the jumbo limit is ineligible to be sold to Fannie Mae or Freddie Mac. The limit is set on a county-by-county basis. In 2021, the jumbo limit for a one-unit property in most counties was $548,250. Counties in more expensive areas of the country went as high as $822,375 for a one-unit property. It’s not unusual for blanket mortgages and cash-out refinances to also be jumbo portfolio loans. However, a single apartment complex could easily exceed the jumbo limits, becoming a portfolio loan. has a jumbo loan product that lends up to $15 million for between five and 10 years. NASB also works will borrowers who are self-employed or are looking for other types of non-conforming loans. Check out NASB’s website for more information or to apply. Cash-out Refinance Portfolio Loan Terms & Costs In a cash-out refinance loan, a borrower reworks an existing mortgage to obtain the equity locked in the property. This can happen when a loan has been paid down over time, when significant improvements have been made to the property, or when a recent appraisal has revealed a large valuation increase. The money received by the borrower isn’t taxed and can be used for rehabilitation of a property, purchase of another property, or even debt consolidation. A lender might keep this type of loan as a portfolio loan because it exceeds jumbo loan limits or it’s a blanket mortgage that cannot be sold on the secondary market. They might also keep it if the refinance is on an existing loan with the bank and the customer has a strong credit profile that the lender wants to keep in its portfolio. has various lending options, including rate and term refinances and cash-out refinances. Lima One Capital is an excellent choice for both new and experienced investors. Visit Lima One Capital’s website for more information and to begin the application process. Bottom Line Portfolio loans are mortgage loans that a lender keeps in its lending portfolio. Some of these loans cannot be sold on the secondary market, meaning the lender has no choice but to keep the loan. However, a lender will keep mortgages in its portfolio from borrowers with strong credit profiles. This will keep the portfolio strong, which is important to the lender’s investors and federal inspectors. These loans can be good for borrowers, but you should ensure the interest rates and fees aren’t too high with a potential portfolio loan. Always shop around with different lenders before moving forward with any type of mortgage loan.

Portfolio loans are mortgage loans that aren’t sold to Fannie Mae or Freddie Mac on the secondary market. Small business owners that cannot qualify for a traditional mortgage or want to finance multiple properties with a single mortgage can turn to portfolio lenders for financing. Because portfolio lenders don’t have to use federal guidelines in underwriting, this allows them to underwrite the loans using their own guidelines, potentially charging higher rates and closing fees. However, it does let them go outside of federal guidelines regarding debt-to-income (DTI), loan-to-value (LTV), and loan size maximums. The list below contains the five best portfolio lenders and what each lender is best for: Lima One Capital: Best for Fix-and-Flip Investors has a wide variety of lending options, including several construction options, like fix-and-flip, fix-to-rent, and a traditional construction loan. Fix-and-flip and construction loans go up to a maximum of $3 million. The value-add bridge maximum amount borrowed is $20 million. Terms and percentages vary among the products. Lima One Capital is an excellent choice for both new and experienced investors. Minimum credit scores range between 600 and 660. Check out its website for more information and to begin the application process. CoreVest: Best Portfolio Lender for Growth Because of a couple of excellent products it offers, is a great choice for business owners looking to continue to grow their portfolios. The blanket mortgage product has terms of five, seven, or 10 years, with up to a 75% loan-to-value ratio. The fix-and-flip credit line allows builders to complete projects, sell them, and continue with a revolving line of credit they can use for their next flip. Credit lines go from $1 million to $50 million. CoreVest offers both an online application and a chatbot on its website, which can help you get the process started. CoreVest also offers an 800 number if you would prefer to speak to someone on the phone. Contact the lender today to begin the application process. Haus Lending: Best for Competitive Rates With starting interest rates between 3.75% and 7.95%, is a great choice for business owners looking for the best interest rates on the market. Most loan products have a maximum of between $2 million and $5 million, except for fix-and-flip ($25 million) and rental portfolio ($50 million). Haus Lending has both an 800 number and a website application available. It also has a button for translating its website into Spanish. Check out its website to lock in some of the lowest rates on the market today. LendingOne: Best for New Construction With up to 24 months for a new construction loan at 85% loan-to-cost, is a good choice for business owners looking to start a construction project. New construction loans go up to $5 million, with redevelopment, conversion, and condo loans also permitted. LendingOne promises fast funding because it’s a nonbank. Some loans will be funded in as soon as 10 days. You can get approval right on its website or you can call an 800 number to speak to a lending advisor. Check out its website for more information or to apply. North American Savings Bank: Best for High-income Borrower with Lower Credit Score The biggest selling point for is its willingness to work with borrowers with recent bankruptcies or short sales on their credit reports. For many loan types listed, as long as the bankruptcy or short sale was at least two years before application, NASB can work with the borrower to find a lending solution. NASB has been recognized as one of the top mortgage lenders, including for noncommercial products, such as United States Department of Veterans Affairs (VA) loans and loans for first-time homebuyers. It also works with borrowers who are self-employed and looking for nonconforming loans. Check out NASB’s website for more information or to apply. How We Evaluated Best Real Estate Portfolio Lenders We evaluated the best real estate portfolio lenders by comparing the product offerings, the terms of each, and the qualifications required from borrowers to obtain a loan. We also considered the interest rate of the loan, the funding speed, and maximum loan amount offerings. Bottom Line Real estate portfolio loans can be tricky because they don’t have to follow federal guidelines for loans sold on the secondary mortgage market. This can mean the borrower might have to pay higher interest rates and fees with these loans. On the flip side, the borrower can benefit from higher DTI ratio limits and higher LTV limits, in some cases without mortgage insurance. Understand your financing needs for your business and compare the product offerings listed here before choosing a lender.

Business owners looking to acquire, repair, or fix and flip a self-storage property have many options for loan types and lenders to choose from to obtain financing. Whether the plan is to purchase a self-storage unit and finance it for 25 years or sell it off after renovations, our guide will help you find the type of loan that’s best for your needs. The list below includes the best providers for each type of self-storage loan and what each type of loan is best used for: : Conventional bank loans for prime borrowers who have a high net worth : SBA 7(a) loans for smaller self-storage loan projects involving commercial real estate : SBA 504 loans for larger projects where borrowers may struggle getting a conventional bank loan : Commercial bridge loans for short-term financing to cover a period of time between two loans : Lines of credit for recurring working capital needs and small renovation projects : Hard money loans for short-term financing for borrowers with unfavorable credit and/or properties in disrepair Wells Fargo: Best for Conventional Bank Loans For commercial real estate borrowers looking for a conventional bank mortgage loan, is an excellent choice. Wells Fargo provides funding of up to $1 million for five and 10 years, although it can go up to 20 years for larger projects. On the negative side, Wells Fargo does require the potential borrower to deposit $1,000 when accepting the conditional approval of any loan or line of credit. It’s nonrefundable if the loan doesn’t close, but if the loan is closed, it’s applied to any applicable fees due at closing. Any unused portion of the deposit is credited to the borrower after closing. Also, if you pay the loan off within three years, there’s a prepayment penalty of 3% of the principal amount prepaid. With no years-in-business requirements, Wells Fargo is a good choice for those looking for their first self-storage loan. You can apply for a self-storage loan through the Wells Fargo website or at your local branch. Contact Wells Fargo to be set up with a lending specialist to get started. Live Oak: Best for SBA 7(a) Loans for Commercial Real Estate When planning on going with an SBA 7(a) loan, there are many requirements specific to Small Business Administration loans. Therefore, we encourage you to check out our article on SBA 7(a) loans before beginning the application process to make sure you know what to expect. Rates on SBA loans tend to be lower than online lenders’ rates and traditional bank rates because of the SBA guarantee. You can get financing of up to $5 million for up to 25 years. One other advantage over a traditional bank loan is being able to have a loan-to-value of up to 90%, reducing the down payment required. There’s a prepayment penalty for loans with a term greater than 15 years if you prepay more than 25% of your loan in the first three years. The fee is charged against the amount you prepaid and is 5% for prepayments in year one, 3% in year two, and 1% in year three. is the top provider nationally for SBA 7(a) loans. It has a dedicated staff that handles self-storage financing. You can apply for self-storage financing with an SBA 7(a) loan directly from their website. Visit Live Oak Bank’s website to get the process started. Lendio: Best for SBA 504 Loans An SBA 504 loan is actually a combination loan. One comes from a lender and one from a nonprofit lender known as a community development corporation (CDC). Both loans are closed simultaneously. SBA 504 loans are good choices because they offer up to $14 million in financing for up to 25 years. Like SBA 7(a) loans, SBA 504 loans allow the borrower to go up to 90% loan to value, reducing the down payment compared to a traditional loan. Our guide on SBA 504 loans goes through the requirements and qualifications needed for the loan. Important guidelines to remember before applying for an SBA 504 loan for self-storage financing include: Property must be owner-occupied Jobs must be created Business must have a net worth of less than $15 million is an excellent choice for SBA 504 loans. Lendio is a broker that can match you up with an SBA 504 lender that specializes in self-storage loans. Check out its website for more information. AVANA Capital: Best for Commercial Bridge Loans For borrowers looking for a short-term loan to renovate a self-storage unit for a possible sale or later permanent financing, a commercial bridge loan is a good option. provides bridge loans from $3 million to $25 million for between 12 and 36 months. The down payment for a bridge loan is higher—up to 25% of the purchase price. In addition to funding renovations and upgrades, commercial bridge loans are good for borrowers who cannot initially qualify for permanent financing. AVANA Capital is a good choice due to the high maximum loan amount, competitive rates among bridge loan providers, and quick preapproval and turnaround times. You can apply for a commercial bridge loan right from AVANA Capital’s website. Visit AVANA Capital’s website to get started. Bluevine: Best for a Business Line of Credit For borrowers looking to establish a business line of credit that could help with renovations and ongoing expenses surrounding self-storage buildings, is an ideal choice. An advantage with a line of credit is that you only pay interest on the amount you use, so a line of credit is handy to have even if you don’t have immediate capital needs. Bluevine offers same-day funding for lines of credit up to $250,000, with interest rates between 6.2% and 7.8%. You can apply directly on Bluevine’s website and have access to the line of credit later that day. Stop by Bluevine’s website to get the application process started. Kiave: Best for Hard Money Loans In addition to bridge loans being a good option for those wanting to fix and flip a self-storage facility, hard money loans can also allow you the same option. Hard money loans are typically saved for businesses that cannot get funding from other traditional lenders, either due to credit issues or properties in disrepair. In addition, traditional lenders usually have better rates for longer terms, while hard money lenders offer more rapid funding times. can provide hard money loans of up to $3 million for 12 months with funding in just five to 15 days. Kiavi can fund first-time flippers (0 to 5 flips in 24 months), but experienced flippers (5 or more flips in 24 months) will get better rates and a dedicated manager. Visit Kiavi’s website for more information. How We Evaluated the Best Self-storage Loan Providers First, we evaluated each type of loan and determined which was the best option for self-storage loans based on the ease of application, the qualifications required, and the interest rates and terms available to the borrower. SBA loans are outstanding loans, but they are typically the most complicated to apply for and obtain. This is why conventional mortgage loans are the top choice because of how easy they are to get compared to the other loan types on this list. Then, we evaluated each type of loan and determined the lender that was the best option for that type of loan. We again compared the ease of application, the qualifications required, and the interest rates and terms available. Bottom Line There are a wide variety of loan types and lenders available for self-storage loans. When deciding which type of self-storage financing is right for you, be sure to consider your budget and timeline. Some loan types on the list will take longer than others to fund but may offer better interest rates and longer terms. Conventional loans and SBA 7(a) and 504 loans are the best choices on this list for most self-storage financing.

Self-storage financing is used by small business owners to finance the purchase, renovation, construction, or expansion of self-storage units. Conventional bank loans, SBA 7(a) loans for commercial real estate, and SBA 504 loans are the most popular types of self-storage financing. is the number-one provider nationally for SBA 7(a) loans. They also provide SBA 504 loans. Live Oak has a lending team specifically dedicated to helping self-storage businesses obtain financing. Contact a Live Oak loan specialist for more information or to apply. What Self-storage Financing Is Used For There are several uses for self-storage financing, each slightly different, with various loans best suited to each situation. Self-storage Loans for New Construction New construction loans are used to build new self-storage facilities. It can be challenging to obtain financing to build a new self-storage facility unless the surrounding market is right. If the market is strong, many lenders are willing to lend for a new construction project. Having a market study done that identifies the characteristics of the general population and the current self-storage market in your area can help you get approved. Any self-storage construction project will have certain expenses that you will need to pay before you can ever rent out a single unit. Some of these expenses include: Unexpected costs that come up in site preparation Operating expenses during the lease-up phase Construction down payments Construction interest payments Typically, building a new self-storage facility will cost between $25 and $40 per square foot of storage space. In addition, the average new facility takes about three to four years to stabilize and reach average occupancy levels. This can help you calculate how much additional capital you will need for operating expenses like rent, loan payments, and a salary for yourself or a manager. Self-storage Loans for Acquisition Acquisition loans are needed when purchasing an existing self-storage facility. A lot of merger and acquisition activity in the self-storage industry is conducted by large investment companies and real estate investment trusts (REITs). It’s less common for independent storage facilities to buy others, but there are plenty of financing options if you intend to purchase an existing facility. Self-storage Loans for Expansion Expansion loans can be considered smaller construction loans because you’re adding on to your current facility and building those units from the ground up. Conventional bank loans are a good option for these expansions if you currently have a profitable storage facility that you’re adding on to, but SBA loans provide additional benefits. Self-storage Loans for Renovation When operating a self-storage business, it is essential to maintain its curb appeal. Therefore, having a well-maintained property is important. Your customers will be keeping their personal belongings in your facility, so you want to instill trust that their property will be protected and well kept. The two most common renovation projects for a self-storage facility are: Replacing the rolling doors: Raising the doors and lowering them constantly can create a significant amount of maintenance cost over time. This is typically the biggest capital expenditure for a self-storage facility, as it costs approximately $550 per unit to replace rolling doors. Reconfiguring storage units: It’s common practice within the industry to reconfigure the size of various units over time. While this can often be done with cash flow, it may require structural changes, making the task more difficult and expensive. Types of Self-storage Financing Once you know which type of self-storage project you are pursuing, you must decide what kind of financing you will obtain. Certain types of financing work better with specific types of self-storage projects. For a complete list of the best self-storage lenders, check out our buyer’s guide. Conventional Bank Loan When looking to renovate your existing self-storage facility, a conventional bank loan is an excellent option. Applying for financing through a bank with which you have a relationship is often beneficial, as they have easy access to your bank accounts to evaluate cash flow. This can often expedite the lending process for qualified borrowers. Conventional bank loans are also a good choice for refinancing an existing project. SBA 7(a) Loan for CRE Whether you want to finance new construction, acquisition, expansion, or renovation of a self-storage facility, SBA 7(a) loans for commercial real estate are a great option. SBA 7(a) loans can have repayment terms of up to 25 years, allowing a business to fund a major project and spread the payments out over a long period of time. They also enable you to finance construction interest charges and up to two years of loan payments into the loan amount. Also, unlike conventional loans, the SBA won’t require you to have specific self-storage experience if you can prove business expertise or a proven history of owning investment property. If you need more information about SBA 7(a) loans or are ready to begin the application process, is an excellent choice. They are the top provider of SBA 7(a) loans in the nation. SBA 504 Loan If you are looking to refinance your self-storage financing, an SBA 504 Loan is an excellent choice. It will often allow you to obtain financing at lower interest rates than you were previously paying and to consolidate multiple loans into a fixed payment. The term for SBA 504 loans is five to 10 years, with an extended amortization period that allows for lower payments. This results in a balloon payment at the end of the term. is a good choice for SBA 504 loans. Lendio is a broker that works with more than 70 financial institutions, and it will provide numerous potential matches for your application. Check out their website for more information. Bridge Loans While commercial bridge loans can be expensive, they are an ideal choice if you have the opportunity to buy a facility for an affordable price and need to close quickly. As long as you make payments on time with your bridge loan, it shouldn’t impact your ability to refinance quickly to a longer-term loan option. provides bridge loans to self-storage businesses to serve as interim financing between loans. You can begin the application process by entering your bridge loan needs into AVANA Capital’s loan builder—you can be preapproved within three days. If approved, you can receive funding in as little as 10 days. Lines of Credit A business line of credit is great to have for smaller projects or recurring capital needs. For example, when you have just a few rolling doors that need to be replaced, you don’t want to wait for a huge financing process to do it. Having a business line of credit on hand can help you deal with these smaller renovation projects, and it can ease the burden of any unexpected expenses that come up. offers a small business line of credit of up to $250,000. You will need at least $480,000 in annual revenue and at least 24 months of business operations to be eligible. You can prequalify online in minutes and get funded in one to three days. Hard Money Loans Hard money loans are typically short-term with repayment terms of 12 months. They are a good choice if you need to close quickly or have a weaker credit profile. Hard money loans are expensive short-term loans used to purchase or renovate investment properties. They aren’t as common in the self-storage industry as the other financing options. is our choice for the best hard money lender. It offers the lowest overall rates, with funding in five to 15 days. In addition, Kiavi lends up to $3 million for up to 12 months. What You Need to Get a Self-storage Loan Once you have decided what type of project you are financing, you can choose a loan type and lender. Each loan type has specific requirements and qualifications, and each loan type works best with specific types of self-storage projects. Choose a Loan Type and Lender There are primarily six different types of loans used for self-storage financing, each with a specific lender that we recommend. Check out our buyer’s guide for the best lender for each loan type. Qualifications While each specific loan will have its own set of qualifications, here are the general qualifications you are expected to meet to be approved for financing: Minimum credit score: 680 Minimum down payment: 10% Time in business: At least two years Debt service coverage ratio (DSCR): 1.25x or greater Credit history: No recent bankruptcies, tax liens, or foreclosures Documentation Needed Each type of financing will also require specific documentation. Here is a general list of documentation you should gather before beginning the application process: Three years of taxes (business and personal) A statement explaining the loan purpose A current balance sheet with debt schedule (if refinancing) Current profit and loss statement Financial statements (business and personal) Rent roll/occupancy report (if refinancing) Market feasibility study (if new construction) Business plan and resume of borrowers with emphasis on real estate/self-storage ownership experience Bottom Line There are many types of financing for self-storage loans. You should first consider which type of self-storage financing you will need before determining what type of loan to pursue. Certain types of loans work better for specific types of projects. However, SBA loans are usually the top options for financing self-storage projects.

Small businesses looking to purchase or lease vehicles, fleets of vehicles, or even certain equipment can use commercial auto financing to obtain these assets. Both traditional and online lenders offer financing options with various terms, funding amounts, and required qualifications. By using business auto financing, companies can manage cash flow by spreading out the cost of large asset purchases over a period of time. If you’re looking for a commercial auto loan, National Funding is an excellent choice. It offers loans to businesses that have at least six months in operation and $150,000 in annual revenue. National Funding can lend up to $500,000 for up to five years. Check out website for more information or to apply for financing. Who Commercial Auto Financing Is Right For Commercial auto financing is useful to businesses for many reasons. It allows a company to purchase or lease vehicles for employee use, transport customers, transport goods, and keep personal and business vehicles separate. While commercial auto financing is similar to personal auto financing, there are three important differences: The vehicle is for business purposes: Unlike personal vehicle financing, lenders may ask for a business plan or company financial statements if the vehicle is to be used for business purposes. The vehicle can be titled in the business’s name: This allows the business owner’s credit and assets to be protected if the business cannot repay the debt. However, many lenders will still require a personal guarantee for the loan or lease, making the owner still financially liable for the business debt. Some tax deductions are available: Ownership and operation costs can be deducted from business taxes, as well as depreciation. Section 179 of the tax code allows for the business to take the entire deduction at once. Consult your tax professional for more information. General Terms for Commercial Auto Loans Numerous lenders, both traditional and online, offer commercial auto loans with various rates, fees, terms, and requirements. The table below includes some general requirements to expect when you start shopping for a lender. How To Get a Commercial Auto Loan 1. Determine Your Budget There are a few different factors to consider when determining your budget. First, you need to figure out what monthly payment your business can afford in relation to your monthly revenue. Additionally, you should budget for recurring expenses, including fuel, maintenance, and storage fees for heavy-duty vehicles. You also need to consider how much more revenue the vehicles will generate as part of the budget calculation. For example, a trucking company can generate more revenue with the purchase of additional trucks. All of these factors will determine what you can afford to purchase. 2. Choose a Vehicle and Lender Once you have a budget in mind, start looking for vehicles and shopping for lenders. Our buyer’s guide will give you a list of the best commercial auto loan providers. While you begin the process of choosing a vehicle and a lender, it’s also a good time to review your business credit to get an idea of your chances of being approved. 3. Gather Documents Each lender will require different documents during the loan application process. Here’s a list of some of the documents that your lender may require: Tax returns (business and personal) Business financial statement (profit-loss) Business incorporation agreement Federal tax ID number Bank statements (business and personal) Business plan Additional cash flow statements 4. Apply for Financing Once you have determined your budget, chosen a vehicle, selected a lender, and gathered your documents, it’s time to apply for financing. Most online applications can be completed in minutes, with approval in less than 24 hours. 5. Accept the Loan Terms & Sign for the Vehicle Once the lender has approved you, review the terms and conditions of the loan carefully before signing. Pay close attention to the interest rate, repayment terms, and any restrictions the lender places on your vehicle selection. Some lenders will limit how old a vehicle you can choose and how many miles that vehicle can have. If the terms and conditions are agreeable, sign the loan paperwork and complete the vehicle’s financing. Buying vs Leasing Sometimes buying vehicles or equipment outright might not be in the best interest of your business. Depending on whether you intend to keep the vehicle or equipment long-term, an equipment lease might be the more affordable option. Buying With a commercial auto loan, the business has the right to put as many miles on the vehicle as it wants. Once the loan is paid off, the business owns the vehicle and can transfer it to a new owner or keep it. Also, there are usually no prepayment penalties associated with commercial auto loans. On the negative side, the lender may require a down payment. The repayment terms will likely be longer with higher payments than leasing. Because the terms are longer, the vehicle will not retain as much value at the end of a loan, making it less valuable to trade in or sell. Leasing Whether you use automobile or equipment leasing, the advantages include lower payments and shorter terms. In addition, leases with a walk-away option can save your business money by allowing you to walk away from a sizable balloon payment. The lease may not require a down payment either, although you may be required to pay a security deposit or the first month’s payment. On the negative side, annual mileage limits might require businesses to pay extra for additional miles. In addition, the ownership doesn’t transfer to the business owner automatically at the end of all leases. If a business doesn’t have a lease that includes a walk-away option, the business could face a large balloon payment. Commercial Auto Financing vs Equipment Loans When financing commercial trucks, many lenders will require you to take out an equipment loan or lease instead of commercial auto financing. You can check out our guides on equipment loans and equipment leases for more information. If you are ready to move forward with an equipment loan, offers loans of up to $5 million for up to 60 months with no minimum time-in-business requirement. Bottom Line Commercial auto financing allows a business to purchase or lease vehicles, fleets of vehicles, or even certain types of equipment. As a result, companies can spread out the cost of large asset acquisitions over a long time. Businesses can purchase vehicles and equipment or lease them. Leasing vehicles and equipment can provide additional benefits to both short-term and long-term cash flow. Businesses should consider all factors involved with commercial auto financing before choosing a lender or a leasing company.

When looking for a business auto loan, there are many factors a small business needs to consider before applying for financing. For example, a business should look at how much it needs to borrow, the maximum term of the loan, the interest rate offered by the lender, any specific requirements regarding the age and mileage of the vehicle, and minimum annual revenue and time-in-business requirements. By using a business auto loan, companies can manage cash flow by spreading the cost of large asset purchases out over a period of time. Depending on what a business is trying to finance, either a business auto loan or equipment loan might be the right choice. For example, some lenders will only finance large commercial vehicles under equipment loans rather than business auto loans. Here are our eight choices for the best business auto loan providers: : Best overall—low rates without funding restrictions on dealership vehicles : Financing for dealerships and private vehicles : Online lender with terms similar to traditional banks : Companies in the West or Midwest that need new or used vehicle financing : Established East Coast businesses that want low-cost financing : Funding up to $5 million for a fleet of vehicles : Borrowers with low personal credit scores : Businesses looking for equipment loans rather than a traditional auto loan Bank of America Bank of America is the best overall choice for a business auto loan due to its low starting annual percentage rate (APR), lack of funding restrictions, and easy-to-meet qualifications. You can finance a vehicle with up to 75,000 miles that’s up to five years old and have funding in one to three days. The only drawback is that older vehicles or higher-mileage vehicles may not qualify. Borrowers looking at higher mileage vehicles should consider Wells Fargo or Crest Capital for business auto financing. You can visit website or stop into a branch location to get the application process started. Wells Fargo Wells Fargo is another excellent choice for a traditional lender providing business auto loans. The starting rates are a little higher than Bank of America, and the $100,000 loan maximum might not be enough to meet every business’ need. Otherwise, the terms and qualifications are borrower-friendly. You can visit the website or stop into a branch to apply for business auto financing. Crest Capital Crest Capital is an excellent choice for businesses looking for an online lender with terms similar to a traditional lender. Crest Capital promises funding in as soon as four hours for loan amounts of less than $250,000. However, additional documentation is required for loans of more than $250,000, which slows down the application process. Crest Capital’s requirements are a little more stringent than the first two lenders on our list, with the lender listing a minimum credit score and time in business requirement. To apply for business auto financing with , visit its website. U.S. Bank For businesses located in the Midwest and western parts of the United States, U.S. Bank is an excellent choice for a traditional lender. You can get financing of up to $250,000 with up to 84 months to repay the loan. The factors that push U.S. Bank down the list are the regional nature of the bank combined with higher credit score and time-in-business requirements than other lenders on this list. To apply for a loan with , visit its website or stop into a bank branch. PNC Bank If your business is located on the East Coast, PNC Bank is a good choice for business auto financing. Its terms are very similar to U.S. Bank’s terms. You can borrow up to $250,000 for up to 72 months. However, PNC Bank does have some of the most stringent time-in-business requirements, as your business must be operating for at least three years to qualify. Bank of America, Wells Fargo, and South End Capital are lenders on this list that have no minimum time-in-business requirements. To apply for business auto financing with , stop by a bank branch or click on its website. Celtic Bank Celtic Bank works with the Small Business Administration (SBA) to provide loans for fleet purchases. The SBA provides a partial guarantee for Celtic Bank business loans. This allows for very low rates on large loans. It offers the largest loans on our list, at up to $5 million. However, because Celtic Bank works with the SBA and offers large loan amounts, more strict qualification and documentation is required. For more information on this financing option, check out . National Funding For business owners with bad credit, National Funding is a good choice for business auto financing. Interest rates on these loans are higher, so borrowers with strong credit profiles should shop around for the best rates. You can borrow up to $500,000 for up to five years. Businesses must be in operation for at least six months and show an annual revenue of at least $250,000. Visit website to apply for business auto financing. South End Capital For businesses looking for auto financing that might fall into the equipment category, South End Capital is an excellent choice. It’s also a good choice for lower credit borrowers as the minimum credit score needed to qualify is 625. Qualified borrowers can borrow up to $5 million for up to 60 months. There are a variety of repayment schedules available. It should be noted that the origination fees range between $399 and $599, which are higher than those of some lenders on this list. However, there are no minimum time-in-business requirements, which makes it a good choice for startups. Stop by website to apply for equipment financing. How We Evaluated Business Auto Loan Providers When comparing the best business auto loan providers, we analyzed several factors to find the lenders that provided the best terms and services. The criteria we used to evaluate the best business auto loans were: Rates and fees: Collateral for the loan is the vehicle being purchased—lower interest rates than other types of business financing Loan amounts: The total amount that can be borrowed to purchase the vehicle Repayment terms: How often payments will be due and the maximum repayment term Qualification requirements: What credit score, time in business, and annual revenue requirements each company has Vehicle restrictions: The age and mileage limits put in place by each lender Speed of funding: How quickly the loan will be approved and how long it’ll take to receive funds Bottom Line Business auto financing provides companies with affordable financing for individual vehicles, fleets of vehicles, and even equipment financing. Each lender on this list has different qualifications and terms, so you should compare rates and terms from multiple lenders before deciding where to apply for financing.