Financing
SBA loans, seller carry, DSCR, and what lenders actually care about when you bring them an RV park deal.
SBA 7(a) Loans
The most common structure for RV park acquisitions under $5M. Up to 90% LTV, 25-year amortization, and fixed or variable rates. Requires owner-occupancy or active management — understand DSCR minimums (typically 1.25x) and what lenders will and won't include in NOI before you apply.
SBA 504 Loans
Two-tranche structure: 50% conventional lender, 40% CDC/SBA, 10% borrower equity. Best for larger acquisitions with significant real property. Lower rate on the SBA tranche but more complex closing process — typically 90–120 days. Well-suited for parks with substantial infrastructure.
Seller Financing & Seller Carry
Sellers carrying a note — typically 10–30% of purchase price at 5–8% over 3–7 years — can bridge a gap in equity or help soften the DSCR burden on the senior loan. Key negotiation points: subordination, balloon date, prepayment, and personal guarantee. Common in off-market deals.
Bridge Loans & Conventional
Short-term bridge debt (12–24 months) makes sense when a park needs stabilization before it qualifies for permanent financing. Conventional commercial loans from community banks or credit unions are an option for strong borrowers who want to avoid SBA personal guarantee requirements.
DSCR: What Lenders Actually Calculate
Debt Service Coverage Ratio = NOI ÷ Annual Debt Service. Most SBA lenders require 1.25x on stabilized NOI. The fight is always over what counts as NOI — lenders will normalize your numbers differently than you do. Owner salary add-backs, management fee adjustments, and deferred maintenance reserves all affect the calculation.
Loan Sizing & What Kills Deals
Environmental flags (Phase II required), unpermitted structures, well/septic systems without inspection records, and below-market leases with long terms are the most common deal-killers at the lender level. Know these before LOI — not during due diligence.
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