Learn how to get RV park financing for your new business, using one or both of the SBA loan programs, the 504 and 7a.

The RV park business is a lucrative one. Not only do you have the benefit of RV enthusiasts spending their vacations and weekends in your park, but you can also cater to those who live in their RVs full-time. Owning an RV park means you’re responsible for providing hookups, showers, restrooms, and a place for people to congregate, but it also gives you the freedom to travel and see the country while your business operates smoothly without you.

There are some things to consider before starting or buying an RV park, though. One of the most important is financing. Do you have cash on hand or assets available to liquidate in order to acquire an existing RV park or build a new one?

And if you do buy an existing RV park, what improvements will you need to make in order to maximize your profits?

RV Park Financing Considerations

You may need additional funding. That’s where RV park loans come in. If you’re looking for financing to open or expand an RV park, you have several options available to you. The Small Business Administration (SBA) offers two programs that can be used for RV park financing: the SBA 504 Loan Program and the SBA 7a Loan Program.

The SBA 504 loan uses private sector financing (i.e., from a bank, credit union, or other traditional commercial lender) and SBA-guaranteed loans to help businesses purchase fixed assets, such as land or buildings. 

This program is ideal for businesses that need up to $5 million in financing and offers funding for 90 percent of the project cost. You, the owner, puts up 10 percent, you get a commercial loan from a bank or credit union for 50 percent, and your SBA-guaranteed CDC loan makes up the remaining 40 percent of the funding. Rates are fixed for 25 years.

An SBA 504 loan can be used to expand your business. The SBA likes it because it helps small businesses create jobs. Ways you can use an SBA 504 loan…

To build or buy:

• Existing buildings or land
• New facilities
• Long-term hardware

Or to modernize (i.e., improve): 

• Land, roads, utilities, parking lots, landscaping
• Existing facilities

The SBA 7a loan uses private sector financing and SBA-guaranteed loans to help businesses start or grow their business. This program is ideal for businesses that need up to $5 million in financing and can offer up to 90% of the project cost in financing. Rates can be fixed or variable and can mature in 10 to 25 years depending on use of the funds.

The SBA 7(a) Loan Program is the most popular loan program offered by the SBA, and it offers monetary assistance to small firms. The SBA 7a loan is generally the best choice to make when purchasing real estate as part of a business, but it can also be used for:

• short-term and long-term working capital
• refinancing existing debt
• purchasing of furniture, fixtures, and supplies

In conclusion, there are a few different methods of financing an RV park. The best option for your park will depend on the specific situation. When making a decision, it is important to consider all of the factors involved. By taking the time to do your research, you can find the option that is best for you and your park.

If you need financing for your RV park purchase, call on us today. Book a call with one of our experienced SBA Loan Advisors.

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