Model Case Study: SBA 504 Financing for a Single-Story Self-Storage Development with Rooftop Solar in Fountain Inn, South Carolina

A 70,000 square foot single-story self-storage facility with a climate-controlled building in Fountain Inn, South Carolina, a Greenville-area suburb that has grown 41% since 2020, proposed for SBA 504 financing. The feasibility study found that the project qualifies under the 504 Energy Public Policy goal through a 40 kilowatt rooftop array, that the market supports the program, and that debt coverage clears the lender's standard only when total project cost is held near $6.2 million, well below the top of the sponsor's cost range.

This is a model case study prepared by MMCG Invest to show how a lender-grade feasibility study resolves the questions a 504 certified development company, a third-party lender and the SBA ask of a self-storage start-up. The market, the competitive survey, the demographics, the utility tariff and the regulatory text are real and were verified in October 2026. The sponsor, the site and every cost, income and loan figure are MMCG model assumptions, not client data.

The sponsor, a first-time storage owner forming a new entity, proposed to develop a 70,000 square foot single-story self-storage facility on five to six acres on the Fairview Road and SC-418 corridor serving Fountain Inn, with about 55,000 square feet of drive-up units and a 15,000 square foot ground-floor climate-controlled building, all-electric, with a rooftop solar array sized to qualify the project under the 504 Energy Public Policy goal. The sponsor's cost range was $4.9 million to $7.7 million excluding land, plus about $1.0 million of land and $90,000 for the array.

The certified development company required an independent feasibility study because the borrower is a start-up and the project is new construction, and the third-party lender required an "as complete" appraisal supported by the study's market analysis. The study answered four questions. Whether the project is 504-eligible given that a storage facility with one to three employees cannot meet the job-creation ratio. Whether the trade area supports 70,000 square feet with a proposed 90,000 square foot climate-controlled competitor in the entitlement pipeline. What achieved rents the competitive set supports. And what total project cost the resulting income can carry at the lender's coverage standard.

Fountain Inn had 14,722 residents in July 2025, up 41.4% from the 2020 Census, and has nearly doubled since 2010. Its households are young and family-heavy: 27.6% of residents are under 18, the owner-occupied rate is 75.1%, the median household income is $73,585 and the median owner-occupied home value is $275,300. Greenville County, at 583,125 residents and growing 11% since 2020, issued 4,947 residential building permits in 2025. Those are the households that generate move-related and garage-overflow storage demand, and the growth rate is the demand driver the study anchored on.

The study found no published supply-per-capita figure for Fountain Inn and recommended a paid trade-area data pull before closing. Greenville did not appear among the metros named as oversupplied in the 2026 national supply releases, which identified Atlanta, Southwest Florida, Miami, Tampa, Austin and Sarasota-Cape Coral. The national pipeline is contracting, with 2026 deliveries forecast about 19% below 2025 and construction starts down almost 20%.

MMCG surveyed seven facilities within three to five miles of the site and read rates from each operator's own website on the survey date. Web rates are quoted first with in-store rates in parentheses.

Competitor Number 1. Extra Space Storage, 662 Fairview Road, Simpsonville. A multistory facility with an elevator, mostly climate-controlled, which the operator markets to residents within five miles of Fountain Inn. A 10 by 10 drive-up unit rents at $98 ($130 in-store). A 10 by 10 climate-controlled unit on an upper floor rents at $75 ($123) under a flash sale, and a first-floor climate-controlled 10 by 10 at $209 ($255) with one unit left. Primary-verified.

Competitor Number 2. Public Storage, 3112 Grandview Drive, Simpsonville. A drive-up facility including drive-up climate-controlled units. A 10 by 10 drive-up unit rents at $112 online ($139 in-store) with a $1 first month. A 10 by 10 drive-up climate-controlled unit rents at $148 ($183) with two left. Primary-verified; the operator's rates move daily.

Competitor Number 3. Fairview Road Self Storage, 20 Berryblue Court, Simpsonville. The closest large independent, 95,115 net rentable square feet in 790 units, 367 climate-controlled and 401 drive-up, in 13 metal buildings on 6.71 acres with a rooftop solar system. The facility is listed for sale. A 10 by 10 drive-up unit was quoted at $80 on listing sites; the operator's own published rates could not be confirmed.

Competitor Number 4. Fountain Inn Self Storage, 2431 Greenpond Road, Fountain Inn. An all-outdoor drive-up facility with no climate control and no 10 by 10 units; 10 by 8 units rent at $69, 10 by 12 at $99 and 10 by 20 at $139, read from the operator's rent page. It offers no climate-controlled product.

Competitor Number 5. Valley View Self Storage, 115 Valley View Road, Fountain Inn. Drive-up exterior units; a 10 by 10 at $80, read from the operator's reservation portal.

Competitor Number 6. Storage Rentals of America, 2926 Grandview Drive, Simpsonville. An all-climate-controlled interior facility; a 10 by 10 at $82 to $123 across listing sites, secondary.

Competitor Number 7. Prime Storage, 410 Scuffletown Road, Simpsonville, probably beyond five miles. Drive-up and climate-controlled; a 10 by 10 drive-up at $84 discounted from $109 and a climate-controlled 10 by 10 at $103 discounted from $136 on listing sites, with a first month free and up to 50% off advertised on the operator's page.

The survey's conclusion is stated as a finding. Institutional 10 by 10 drive-up web rates run $98 to $112, about $0.98 to $1.12 per square foot per month, against $80 at the local independents. Climate-controlled pricing is fragmented, from $75 promotional upper-floor units to $148 for drive-up climate at the REIT, which reflects how heavily upper floors are discounted. Every operator surveyed discounts 40% to 50% on the web. A ground-floor climate-controlled building priced between $110 and $140 for a 10 by 10 fills the gap between discounted upper-floor product and REIT drive-up climate, and this facility offers no climate product at all.

Two projects were identified in the entitlement pipeline and both were treated as risks the study had to resolve. At 1314 and 1318 N. Main Street in Fountain Inn, a developer proposed a three-story, 90,000 square foot climate-controlled facility behind a retail and office building; the city council postponed the rezoning and the outcome was unconfirmed on the survey date. At 604 Northwoods Drive, a rezoning request would convert about 31,000 square feet of an existing 73,000 square foot building to self-storage; the planning commission split and the council approved first reading in August 2026. If both are built, about 121,000 square feet of new supply would land in a city of fewer than 4,600 households, and the N. Main Street project would compete directly with the climate-controlled building. The study underwrote the climate building's lease-up with that project in the base case and ran the drive-up building against the Northwoods conversion.

The study concluded achieved in-place rents from the survey, not web rates: $95 to $105 for a 10 by 10 drive-up unit, about $1.00 per square foot per month, and $115 to $135 for a 10 by 10 climate-controlled unit, about $1.25 per square foot. Gross potential rent on 55,000 square feet of drive-up at $1.00 and 15,000 square feet of climate-controlled at $1.25 is about $885,000 per year. At 88% economic occupancy with tenant insurance and ancillary income at 5% of rent, effective gross income is about $818,000, and at a 35% expense ratio for a single-site start-up operator, stabilized net operating income is about $530,000. Physical stabilization was underwritten at 24 to 36 months and revenue stabilization at 36 to 48 months, consistent with the largest operator's own disclosures.

A storage facility with one to three employees cannot meet the 504 job-creation ratio. At one job per $95,000 of debenture, the ratio for 504 loans approved on or after October 1, 2025, a $2.6 million debenture would require about 28 jobs. The study established the project's eligibility under the Energy Public Policy goal instead: renewable sources generating more than 15% of the energy used at the project facility, documented by an engineering report. Because the borrower is a start-up with no historical baseline, the alternative 10% energy-reduction path was unavailable and the renewable path was the only one open. The energy goal's ratio is one job per $150,000, and qualification also lifts the per-project debenture ceiling to $5.5 million and opens a $16.5 million aggregate for the applicant and its affiliates. The higher ceiling is immaterial to this project, whose debenture is under $3 million; the aggregate is the sponsor's path to a second and third facility.

The study modeled the facility's annual electricity use at about 200,000 kilowatt-hours: 120,000 to 150,000 for the climate-controlled building, 55,000 to 80,000 for drive-up lighting, gates and access control, and about 10,000 for the office. Clearing 15% requires more than 30,000 kilowatt-hours of generation, or about a 22 kilowatt array at an Upstate South Carolina yield near 1,350 kilowatt-hours per installed kilowatt. The study recommended a 40 kilowatt behind-the-meter rooftop array producing about 54,000 kilowatt-hours, 27% of modeled load, which still clears 15% if actual load reaches 360,000 kilowatt-hours. The array occupies about 2,500 to 3,000 square feet of roof out of roughly 70,000 available. At about $2.25 per watt for a system of this size, against a 2026 commercial benchmark near $1.77 per watt for larger systems, the installed cost is about $90,000.

The economics of the array were stated plainly. Under Duke Energy Carolinas' South Carolina small general service schedule, the facility's marginal energy sits in the 6.74 cent per kilowatt-hour tier, so 54,000 kilowatt-hours offset saves about $3,600 to $4,500 a year including riders, a 20 to 25 year simple payback, or about 14 to 17.5 years if the 30% federal investment credit is captured by placing the array in service by December 31, 2027. Exported energy earns only avoided cost under the non-residential solar choice rider, which is why the array is sized to load and not beyond it. The study flagged that parts of the Fountain Inn area are served by a rural electric cooperative rather than Duke, and that the serving utility and its time-of-use schedule must be confirmed at the site. The solar does not change the project's economics. It makes the project eligible and gives the sponsor a growth track, and the credit was treated as post-completion liquidity, not underwritten income.

The 504 structure for a start-up is a third-party first lien at 50% of project cost, a CDC debenture at 35% and borrower equity at 15%. The study tested coverage across the sponsor's cost range at an illustrative 7.5% first-lien rate and a 6.0% debenture rate, both on 25-year amortization.

At a total project cost of $6.0 million, the low end of the range, the first lien is $3.0 million and the debenture $2.1 million, annual debt service is about $428,000, stabilized coverage is about 1.24 times and the yield on cost is 8.8%. At $7.4 million, the midpoint, the first lien is $3.7 million and the debenture $2.59 million, debt service is about $528,000, coverage is about 1.00 times and the yield on cost is 7.2%. At $8.8 million, the top of the range, coverage falls to about 0.84 times and the yield on cost to 6.0%.

The lender's standard was coverage of 1.20 times at stabilization. The study concluded that the income supports debt service of about $442,000, which under the 504 structure corresponds to a total project cost ceiling of about $6.2 million, or about $73 per rentable square foot excluding land and the array. That ceiling, not the sponsor's cost range, became the controlling number in the credit file. The study recommended that the lender size the commitment to it and that the sponsor bid the project to it, with the climate-controlled building held to 15,000 square feet and the drive-up buildings specified as pre-engineered steel on grade.

Eligibility was resolved through the Energy Public Policy finding, with the engineering report, the supplier certifications required under the foreign-entity component rules for arrays beginning construction after 2025, and the December 31, 2027 placed-in-service date written into the construction schedule. The proposed 90,000 square foot climate-controlled competitor on N. Main Street was carried in the base case and the study recommended the lender condition the commitment on the rezoning outcome. The repricing risk at Fairview Road Self Storage, the closest large independent and listed for sale, was noted. The cost ceiling was the finding that mattered most, and the study said plainly that at the midpoint of the sponsor's range the project does not cover its debt.

Three items were flagged for completion before closing: a trade-area supply-per-capita pull from a paid data provider, confirmation of the serving utility and its time-of-use schedule, and the CDC's written confirmation of the 15% renewable test against the current SOP text.

The study concluded that the facility is feasible in Fountain Inn, that the market supports a 70,000 square foot program with a ground-floor climate-controlled building priced between the discounted upper-floor product and the REIT's drive-up climate rate, that the project qualifies for 504 financing under the Energy Public Policy goal, and that it should be built at a total project cost at or below about $6.2 million. The sponsor's cost range reached $8.8 million, and at that cost the project would not have covered its debt. The study set the ceiling before the lender committed.

MMCG prepares SBA 504 and 7(a) feasibility studies for self-storage development nationally, aligned with SOP 50 10 8.1. Request a proposal from the SBA self-storage feasibility study page.