SBA 7(a) Self Storage Feasibility Study in Alabama

Live Oak dominates Alabama storage lending

In Alabama's self storage lending under SBA 7(a), one lender carries the cell: Live Oak Banking Company is named for 11 of the 31 loans and $21.8 million of the $42.5 million approved from FY2017 to FY2026, far in front of the smaller Bank Five Nine, at 5 loans and $3.3 million. A reader should note that SBA names the present holder, so a nationwide specialist may have bought loans that others originated. The median loan of $830,000 stands at 0.85x of what storage operators borrow elsewhere, with the central half from $450,750 to $1.9 million.

Standing and places

In national count Alabama stands 19; storage ranks 12 of 39 in the home-state order; franchises make up 3.2%. Mobile County has 6 loans, Montgomery has 5, and Cullman, Jefferson, Madison, Shelby and Tuscaloosa have 2 each. The heart of the series is FY2021, with 10 loans and $10.8 million, set beside a year with none in FY2020 and a single loan in FY2024.

The limits of the figures

For Alabama storage, the two outcome percentages, cancellation and charge-off, rest on cohorts that are too small, so they are omitted rather than set to zero. A yard for motorhomes and boats has no code to itself, so it may be filed here as storage or under warehousing and appear in these figures.

What the Alabama study must test

Storage demand follows households, moves, small business inventory and the stock of competing space, so the study should count rentable square feet per household within a drive and the occupancy of neighbors by unit type. Rates should come from a survey of comparable facilities, and the lease-up forecast should recognize that new facilities fill slowly. Land, site work and the share of climate-controlled space against drive-up doors drive cost, and the study should show a construction budget set against the $830,000 median. Alabama zoning and the cost of utilities vary widely by county, so the site section should settle both. A national specialist lender will ask for a reserve to carry interest during lease-up, and for evidence that rents will hold when a competitor opens nearby. The appraisal will rely on stabilized income, so the study should show it.