Loan to purchase business and real estate

Would a small business loan be used to buy an existing self storage business and the associated real estate? What type of down payment is needed? What type of reserves are needed? There is one for sale near me and I would love to find out what is needed to aquire it. I will most likely need to partner with someone or aquire a private loan to cover the down but I’m thinking it might be doable.

You could go that way or just a regular commercial lender, too. The cash flow of the business will dictate the LTV. Most lenders will allow you to cross collateralize other real estate to satisfy the down, too.

There are programs that would accomodate the funding of both the business and the associated real estate; these are some of the finer points you can expect:

  • LTVs/CLTVs of 80-90% depending on how you want to document your income/assets
  • Repayment terms as long as 30 years.
  • Most commercial lenders will deem this a Tier II property.
  • DSCR of 1.20 required
  • Construction expansion can be rolled into the some of the loan programs.
  • Can be financed as either a owner occupied business or absentee business arrangement (non-owner occupied).

Does that cover it or do you have any other questions?


Scott Miller

What are the numbers on the building and the business?