RV camping has long been a popular pastime for Americans, and there’smajor industry growth on the horizon. More than 40 million Americans name RV camping as a top outdoor activity. And thanks to Millennial and teen enthusiasm for the camping industry, 50% of Americans are expected to camp more in the coming years than they did in 2017. When they set out on their camping getaway, many Americans are turning to RVs for comfort, nostalgia and fun.
There’s growing consumer demand for RVs, and RV park owners are listening. Fueled by the industry’s renewed popularity, RV parks across the country are expanding their current facilities to make way for digital nomads, young families and retired travelers who are taking their home on the road. But it’s not always easy—or best for your business—to fund those expansions out of pocket.
No matter your method for growing your RV park business, it’s important to assess conventional and SBA financing with the help of a certified professional. In this article, we’ll discuss conventional and SBA loan options specifically for RV park operators looking to expand in 2018. Read on for an overview of SBA 7(a) loans, SBA 504 loans and the commercial finance process.
Why Secure Financing for your RV Park Business
RV park businesses have many options for long-term growth: buying new property, expanding current facilities, refinancing, providing upgraded technology for your campers, and more. For many businesses, using existing funds to pay for key expansions can actually hinder your growth. If you’re looking to grow but preserve capital in the process, it’s time to explore SBA financing for your RV park.
Surveys reveal that 49% of small businesses borrow money to boost working capital and 42% are borrowing to purchase new equipment. Overall, trends show that small businesses are borrowing to expand their business, rather than simply to repay debt. But just because others are doing it doesn’t mean it’s right for you. Before you consider financing for your RV park, ask yourself the following questions:
- What other options do I have to meet long-term goals and grow my RV park business?
- Do I know exactly where my funding would go, and how much funding is required to meet these goals?
- How will my expansion effort affect capital, profits and my overall bottom line? Is repayment possible if these goals aren’t met?
- Have I talked with a certified lender who has experience securing funding for RV parks? (If you are exploring your options, reach out to Cornerstone Capital Lending today.)
As you explore different financing options for your RV park, consider how each loan will impact your business in the next 5, 10 or 20 years. The best loan for your business will help sustain long-term growth; the best lender for your business will adjust the terms of your loan for optimal long-term benefits.
Look for a lender that will discuss all of your financing options and find the best one to meet business goals, even as they change with your business. Your certified lender should be able to secure a loan in a timely manner, with your unique market position and goals in mind.
Types of Financing for RV Parks
Cornerstone Capital Lending offers a variety of commercial loans and financing options for businesses of all sizes. We put our clients and their business needs first. In order to make the most out of your loan, our team can adjust the terms of your financing to ensure you can make payments without sacrificing your working capital.
Here’s a quick overview of key types of financing for RV parks, including conventional and SBA loans. (Want to speak directly with a lender about your options? Reach out to our certified financial advisors.)
SBA 7(a) financing for RV park businesses
When small businesses are looking to secure a loan for long-term growth, they often turn to SBA 7(a) loans. This type of SBA financing allows RV parks and other businesses to secure up to $5 million to fund the following projects:
- Purchasing land and build new facilities
- Purchasing an existing business (such as another RV park)
- Repairing capital or refinance debt
- Purchasing machinery, furniture, supplies or technology (including those that will better accommodate your RV park guests)
SBA 7(a) loans are popular among many RV park owners because they often come with flexible rates and a low down payment. Qualified business owners can secure a loan in a timely manner and pay off the loan in the long-term while preserving capital for day-to-day business expenses.
SBA 504 loans for RV park businesses
RV park businesses can also apply for SBA 504 loans. These loans, also known as Certified Development Company (CDC) loans, are used for more specific purposes than SBA 7(a) loans. If RV park owners want to secure additional funding to purchase real estate or equipment, they can consider an SBA 504 loan.
SBA 504 loans can fund the following projects:
- Purchasing land
- Purchasing or expanding an existing business
- Purchasing utilities, parking lots or other improvements specifically for park growth
- Converting or modernizing existing facilities (such as making improvements to fit the modern RV owner’s needs)
SBA 504 loans cannot be used for repairing credit or refinancing, repaying or consolidating debt.
Conventional loans for RV park businesses
Outside of SBA loans, RV park businesses commonly apply for conventional loans. Like SBA 504 loans, conventional loans can be approved for specific commercial real estate projects. Conventional loans are typically reserved for multi-use owner occupied properties. Owners looking to purchase or refinance industrial or special-use properties can explore conventional loan options.
SBA Financing for RV Park Owners
SBA loans are provided in part by the United States Small Business Administration (SBA.) The SBA was formed in 1953 to aid small businesses across the country through loans that promote long-term growth. Millions of small businesses have benefited from SBA loans. The number of SBA loans has risen in the past few years , giving confidence to small business owners across many different industries.
The SBA is not the sole provider of SBA loans. SBA loans are funded by certified banks and lenders that work directly with small business owners. Applying for an SBA loan comes with a guarantee that if the loan cannot be paid back in time, the SBA will cover part of the costs. This type of guarantee often comes with high rates or down payments if it comes from a bank or other financial institution. However, one of the reasons many business owners choose SBA loans is that this type of guaranteed loan can still come with flexible rates, low fees and a low down payment.
In addition to the SBA 7(a) and SBA 504 loan programs, qualifying businesses in rural areas can apply for a loan through the United States Department of Agriculture (USDA).
When you decide to explore conventional or SBA financing for your RV park business, reach out to a certified financial expert. At Cornerstone Capital Lending, our clients enjoy a streamlined process that tells you quickly whether you qualify for a loan. We know your time is valuable, and we treat it as such every step of the way.
Required Documentation for SBA Loans
In order to apply for an SBA loan, you will need to submit updated documentation about your business. Applicants must turn in personal finance statements, business debt schedules, income statements and other documents along with their completed application. The team at Cornerstone Capital Lending can help you submit the required documentation and complete the loan application quickly.
How to Select an SBA Lender
Not all loans are created equal, but some lenders may tell you otherwise. In order to choose a lender that will get you the ideal loan for your business, you must carefully evaluate potential SBA lenders. Look at each lender’s experience with RV park businesses, lending history and the types of loan programs it has established for your business. Also be sure to ask your lender about their SBA certifications. Without proper certification, your lender cannot help you secure SBA loans.
Before you move forward with your quote, ask your lender the following questions:
- How soon can I expect to know if the loan has been approved?
- Are you able to negotiate payment terms and down payment options to fit my RV park’s needs?
- What loan programs (including SBA, conventional or other loans) can you offer my RV park business? Are you certified to offer SBA 7(a), 504 and other loans?
- How long have you been helping RV parks secure financing?
- How can I reach your staff if I have a question about the application or loan quote?
At Cornerstone Capital Lending, our team has more than 40 years of combined expertise specializing in SBA and conventional loans for small businesses. We have experience helping RV park businesses secure financing through our wide variety of loan options. If you have a question about your quote, application or approval, we are available every step of the way.
Want to learn more about our experience with RV parks? Explore our recently funded businesses.
Get Started Today
When you’re ready to take the next steps to buy new property or update your facilities, reach out to the certified financial experts at Cornerstone Capital Lending. Our team can help your business find the ideal loan for your needs and secure funding in a timely manner—allowing you to capitalize on the growth of the RV park industry and edge out your competitors.
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