If you are an individual who is looking for a lucrative business opportunity, you might want to think about getting into self-storage ownership. Setting up a facility that leases storage units is a great way to make money as many people are in desperate need of affordable storage solutions. It is a service that will always be in demand from individuals and businesses alike, and another perk of this kind of business is that it has relatively low operation costs, which means bigger profit margins for you. If this sounds like an appealing business opportunity to you, below are some tips on how you can help to finance self-storage as a business so you can get started or expand your current facility.
Different Types of Loans
The most obvious way to finance your self-storage business is by applying for a business loan. To do this, you will need to present your bank or investor with a quality business plan to prove that you have thought carefully about your operations and how they will work. You should also offer cash-flow forecasts that detail your estimated profit margins, overhead costs, and an idea of how quickly you will be able to pay off the loan. There are a few different types of loans you can apply for.
Small Business Loan:
This is ideal for those who are looking for start-up opportunities or if it is their first time as a business owner. These loans might not be huge, but they can help to go towards your initial start-up costs and tend to have low-interest rates and manageable repayment schedules. Small business loans are often available through government schemes, so do your research to see if your self-storage business idea would be eligible.
Bank Loan:
Getting a business loan from your bank is another option and one that many entrepreneurs explore. A lot of banks can also offer business advice to help you manage your finances better and put together your business plan. They can help you to set up a business bank account where they will deposit your loan if it is approved. Always shop around, as some banks will offer better interest rates and perks for loans and business bank accounts than others.
Work Capital Financing:
When you are applying for a bank loan or even a small business loan, there will be certain boxes you will need to have to tick to be eligible. This will include things like credit checks, information about your current income and outgoing expenses, and other information regarding your financial health. They will also check if you have been approved or rejected from previous loan applications and why that lender might have chosen not to give you that loan. For those who are struggling to get a loan because of these roadblocks, you can explore the option of work capital financing from online lenders. These will likely come with higher interest rates and terms, but this will vary depending on the lender. Working capital finance is easier to get for many people because it can be more attainable than other types of loans.
Construction Financing:
If you already have a self-storage business and would like to expand it, but you don’t have enough storage units, you can always look into applying for construction finance. This can help you to cover the costs of having new units made and delivered to your site. However, while these costs might be initially manageable at first, it isn’t uncommon to find yourself facing a larger payment at the end of your expansion project.
Other Ways to Finance Your Business
Loans are the most obvious way to finance your business, but these are not the only options. If you are struggling to get a business loan or would like to explore some alternative financing options, consider the following suggestions:
Re-mortgaging Your House
If you own the property you live in or own property that you rent out to tenants, re-mortgaging your house could be a good way to get some money to fund your business. A lot of people choose to re-mortgage their homes if they are looking to make some improvements to the property or need money to invest in other things like a business venture or even medical expenses, etc. This may not cover all the costs you need to start your self-storage business, but it could help to add to your business finances if you need a boost.
Selling Assets
If you have money tied up in other assets, whether that be property, equipment, vehicles, or even transferring stocks, it can all help to fund your business venture without getting a business loan. This option is best for those who already have assets that have a relatively significant financial value, otherwise, you might find yourself barely raising enough to fund your business. Nonetheless, it is an option if you are looking for an alternative to applying for a loan.
When it comes to starting a new business, there is always a lot to think about, but how you are going to fund that business is an essential component to its success. You should always think carefully when you’re applying for loans, as you need to be confident that you will be able to pay back that money no matter the outcome of your business venture. It is good to explore other options that aren’t business loans as they aren’t always preferable or suitable for everyone’s circumstances, but either way, you need to weigh up your options.
A self-storage business could be a fantastic opportunity to make money and build a very profitable business from the ground up. There are so many reasons why someone might need to lease a storage unit, whether that is for a short time or an extended period. This kind of demand is what all businesses need to survive, so if you have been thinking about moving into business ownership, consider the possibility of starting a self-storage facility and think about the different ways you can fund it from the list above.