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Kitsap Lake Storage stabilizes with 504 refi

Kitsap Lake Storage, LLC was formed in 2005 to build and operate a self-storage facility located in Bremerton, Washington. The business is owned and operated by Chuck and Patty Bair along with operations manager LeAnn Williams. It consists of 95,000 gross square feet of mini storage units in six separate buildings with an additional 9,000 square feet of space available for RV, boat and auto parking. Despite the struggling economy, this business has been able to grow steadily since operations began.

"We heard about the SBA 7a and 504 loans through a trade magazine, Inside Self-Storage. I tore out the article," recalled Chuck Bair. "I wanted to be proactive and use the SBA program when the time was right. I was drawn to the 504 program by the possibility of a 90% LTV. The twenty year fixed rate was also appealing. We were anticipating a 504 rate between 5.5% and 6.5%. Never in our wildest dreams did we expect a rate under 5%."

The purpose of this loan was to refinance existing debt on the existing self-storage facility. The existing debt, over two years old, was used to acquire the land and construct the property improvements. The debt was not government-guaranteed and all payments were current for the previous twelve months. It met all of the requirements for eligibility under the debt refinancing provision of the Jobs Act of 2010.

This refinance allowed the borrower to stabilize debt service during this favorable rate climate and meet the terms of the existing loan, which was scheduled to mature in 2013. Chuck explained its benefits, "The SBA 504 program helped create a few jobs and solidify our business. Forecasts are hard to make these days. The fixed rate took the uncertainty out of our debt service. I can't say enough about how important this is during this current time of deep uncertainty."

Kitsap Lake Storage's experience was a positive one, "Working with Wendy Avila at Evergreen was phenomenal. She is a good communicator and knows her program. I have already recommended the 504 program to half-a-dozen of my business friends. I've also recommended Kitsap Bank and their SBA department. They know what they are doing."