In this article, you will learn how to get marina financing with an SBA 7a loan.

Outdoor recreation is a big industry in the United States, accounting for 1.8 percent of current dollar GDP in 2020. That equates to almost $400 billion. (Source: BEA)

A substantial portion of outdoor recreation is water sports, fishing, and boating.

It comes as no surprise that boats and watercraft of all kinds need storage. If you are a budding entrepreneur, building or buying an existing marina may be a very wise investment.

However, buying a facility is expensive and building one is even more expensive.

That’s where financing comes in. While you may not have the cash to build or buy a marina outright, there are plenty of sources of financing for small business owners.

Borrowers are able to purchase commercial real estate under the SBA 7a and SBA 504 loan programs, respectively, regardless of whether they want to construct a brand-new marina or buy an existing one with the intention of improving its facilities. 

One primary benefit of an SBA 7a loan versus an SBA 504 is that they permit borrowers to use the proceeds of the loan as working capital.

In addition, the Small Business Administration (SBA) will guarantee up to 75% of the loan amount for the borrower and will allow for a maximum loan amount of up to $5 million.

The following are some of the ways in which SBA 7a loans can be put to use:

SBA 7(a) loans can be used to support construction of a new marina in its entirety, including the financing of expenses like as sprinkler systems, alarms, and other security systems.

SBA 7(a) loans can also be used for purchasing an existing marina, in addition to being used to fund renovations, expansions, and enhancements to it. 

Another purpose for these loans is to improve the marina. 

Borrowers interested in purchasing a marina can acquire up to 90% financing from the SBA if they combine a 5% cash down payment with a 5% seller note. 

This is possible because of the SBA's new policy regarding the acquisition of existing businesses. 

It is important to keep in mind, however, that the lenders who are recognized by the SBA to offer 7a loans might not be as generous as other lenders, which means that the specific amount of financing a borrower may receive could vary.

Refinancing a marina with an SBA 7a loan may be an option for you if you wish to refinance certain types of business debt on a marina that you already own and operate.

In order to be eligible for refinancing, the debt must have been used for purchases that would have been eligible for SBA financing in the first place. Only then will the debt be considered for refinancing (i.e. working capital and commercial real estate, not personal expenses.)

Financing your marina with an SBA 7a loan is a great option because of the low interest rates and long repayment terms. This will allow you to keep your marina running smoothly and provide a great service to your customers. Book a call today to learn more about how we can help you get the financing you need.