Funding Your RV Park Purchase
Securing capital for a campground acquisition differs significantly from residential financing. Because campgrounds are operating businesses, lenders evaluate both the real estate and the operating financials.
1. SBA 7(a) Loans
The Small Business Administration's 7(a) program is the most common financing path. The federal government guarantees a portion of the loan, which reduces the lender's risk.
- Down Payment: Often as low as 10% to 15%.
- Terms: Amortized over 25 years.
2. Conventional Commercial Mortgages
Offered by commercial banks and credit unions without government guarantees.
- Down Payment: Usually requires 25% to 35% down.
- Terms: 5-year or 10-year balloon payments, amortized over 20 or 25 years.
3. Seller Financing
The seller acts as the bank, accepting a down payment and monthly principal and interest payments.
- The Benefit: No bank fees, faster closings, and flexible terms.