SBA 7(a) Self Storage Feasibility Study in Tennessee

Large loans and the Live Oak pattern

Tennessee self storage borrows large under SBA 7(a): the median of $1.2 million is 1.25x of storage borrowers elsewhere, and half the loans run from $655,000 to $2.1 million. Between FY2017 and FY2026 Tennessee's cell records 27 approvals worth $42.2 million. Holding 13 loans valued at $24.9 million is Live Oak Banking Company, with Bank Five Nine behind it at 7 loans and $7.0 million. Tennessee is 24 among states by count, with storage at 15 of 39 in the state, and franchises account for 11.1%.

Spread across the state

No county dominates. Hamilton, Knox and Shelby show 3 loans each, Davidson, Dickson, Hawkins and Washington show 2 each, and the rest are single loans. FY2018 stands out with 4 loans and $11.2 million, the largest dollar year, and activity since has run at 2 to 3 loans per year.

Scope and rates

Boat and RV yards are filed under self storage or warehousing for lack of a code of their own, so the cell may include them. Cancellation and charge-off are not reported, since the early cohorts are small, which leaves volume, size and holder as the only measures. A lender will want the sponsor's own operating history to fill that gap.

What a Tennessee storage study has to test

The first check is local supply: existing storage space per household, rents by unit type and occupancy at nearby facilities. It should price the site, the buildings and the paving, and the share of climate-controlled units, then model lease-up over many months with a reserve for interest. Tennessee markets differ, from Nashville's growth to smaller towns, and the study should not borrow rents from another market. The size of the typical loan suggests purchases or ground-up construction, so permits, utilities and stormwater requirements should be part of the plan. A specialist lender in this lane will examine the management plan, such as online rentals, manager staffing and insurance products, and the study should cover these. Coverage should hold at stabilized occupancy lower than the sponsor's target, and the appraisal will use stabilized net income, so the study must support its rent assumptions with surveyed comparables.