SBA 504 Self Storage Feasibility Study in Illinois

Illinois storage under 504: SomerCor's larger dollars

Self storage financed under SBA 504 in Illinois is a smaller group than the 7(a) record: 28 approvals worth $39.7 million, with a median of $846,000 that is 0.95x the nationwide 504 figure and central loans from $387,500 to $1.7 million. Franchising is 0.00%. Illinois shows a rank of 9 among states on loan count, and storage takes slot 9 of 39 within Illinois, a higher local position than under the other program. Nothing on this page passes our margin test.

The development companies

Small Business Growth Corporation shows 12 loans and $7.5 million, while SomerCor 504, Inc. shows 11 loans and $19.9 million, the larger sum on the smaller count. SBA's file reflects present holders only. Madison County has 4 loans, Cook, Kane and Will 3 each, and Grundy, Lake and Sangamon 2. Approvals began with none in FY2017, reached 8 loans and $4.4 million in FY2021, and included 4 loans and $16.4 million in FY2024, a year of unusually large loans, before falling to 1 loan and $404,000 in FY2026.

On cancellation and on charge-off, Illinois 504 storage supplies no percentage, the loans being too sparse. Neither gap is zero.

What a 504 storage study must prove

Vehicle storage for RVs and boats shares a code with ordinary storage, so a project aimed at it needs its own demand test. Under 504 the borrowed money goes to land, structure and fixed equipment, so the study should itemise land cost, site work, construction, climate control and security systems. Supply in the trade area, with rents by unit size and occupancy, is the first demand test, and the second is the absorption pace of a new facility. Lease-up is slow, and interest during it must be funded, so the study should show months to stabilisation and the reserve. Run the coverage ratio on the sum of both loan payments, using a slower case. Zoning, access and visibility should be confirmed. Appraisal will rely on stabilised income, so the study has to show the route to it and what the facility is worth if lease-up runs late.

A year with 4 loans and $16.4 million in FY2024 stands out among small years. The study should avoid leaning on one large deal for comparison, and should instead present several comparable facilities, including rents, size and occupancy, so that a reviewer can see a range, not a single outlier.