SBA 504 Loans for Self-Storage Properties

An underdog when it comes to self-storage financing, the Small Business Administration’s 504 loan program can be a savvy financing choice for self-storage investors. These loans are typically good alternatives for investors unable to qualify for conventional financing.

The SBA 504 loan offers long-term, fixed-rate financing for the purchase, construction or renovation of a self-storage facility. Investors can receive a maximum 504 loan amount of up to $5.5 million, with 10-, 20-, or 25-year repayment terms.

2022 Borrower Qualifications for SBA 504 Loans

• To qualify for an SBA 504 loan, an investor must:

  • Be an entity operating as a for-profit company within the U.S.

  • Have a tangible net worth of less than $20 million
  • Have an average net income of less than $6.5 million after federal income taxes for the two years preceding your application
  • Be able to demonstrate management and operational expertise
  • Present a business plan deemed feasible by the SBA
  • Demonstrate ability to repay the principal balance

SBA 504 loans are commonly made available through community development corporations, often referred to as CDCs. Both a CDC and a bank (or credit union) contribute funding for an SBA 504 loan.

These loans consist of three parts. The largest part is a conventional first mortgage that accounts for 50% of the project’s cost, provided by a third-party lender. The SBA-backed portion of the 504 loan functions as a second mortgage, accounting for up to 40% of the total amount. Finally, the investor is expected to put a down payment of 10% down payment toward the project.

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SBA 504 eligibility thresholds and the maximum loan amount on this page were corrected on July 24, 2026 against sba.gov (page last updated March 30, 2026).