If you're looking to acquire a marina with a residential property and a restaurant on site, you may be wondering if you can finance it using an SBA loan. In this post, we'll explore the answer to that question and provide some helpful tips for financing the purchase of a marina.
Understanding SBA Financing for Marinas
The SBA (Small Business Administration) offers several loan programs to help small businesses access the capital they need to grow and succeed. One of these loan programs is the 7(a) loan program, which is designed to help small businesses with a wide range of financing needs.
One of the great things about SBA loans is that they are backed by the government, which makes them less risky for lenders. This means that lenders are more willing to lend money to small businesses, even if they don't have perfect credit or a long history of profitability.
When it comes to financing the purchase of a marina, the SBA 7(a) loan program can be a great option. As long as the cash flow is there (or projected to be there), you can use an SBA loan to finance the acquisition of a marina with a residential property and a restaurant on site.
Residential Property and Debt Service Coverage Ratio
However, if the residential property is a long-term lease, you won't be able to use that income for qualification. If it's an Airbnb-type property, you can use that income for qualification in the debt service coverage ratio.
If the residential property is part of the stipulation of the offer, you may want to consider requesting that the property be delivered vacant so that you can do projections on those four units for debt service coverage ratio.
Lenders with an Appetite for Marinas
According to the speaker in the video, there are two or three lenders that love marinas, but not all banks and non-bank SBA partners like marinas. If you're looking to finance the purchase of a marina, it's important to work with a lender that has experience in this area and understands the unique challenges and opportunities that come with owning and operating a marina.
Conclusion
In conclusion, if you're looking to acquire a marina with a residential property and a restaurant on site, you may be able to finance it using an SBA 7(a) loan as long as the cash flow is there (or projected to be there). It's important to work with a lender that has experience financing marinas and understands the unique challenges and opportunities that come with owning and operating a marina. By following these tips, you can increase your chances of successfully financing the purchase of a marina.