Marina Underwriting Method: Slip Demand, Boat Registrations, Submerged Land Leases and the Class's Record

A marina asks a lender to underwrite three things at once. The first is an operating business that rents wet slips and dry storage racks, sells fuel, runs a ship store and often a service yard. The second is a set of improvements: fixed piers or floating docks, a dry stack barn, a fuel system, a launch ramp. The third is the water and the bottom under the docks, which in many harbors the operator does not own and holds instead under a lease, a permit or both. Each layer can fail on its own, and a feasibility study that tests only the business, however carefully, leaves the other two as open questions in the credit file.

This article sets out a marina slip demand and lease underwriting method for a lender's reader: what the class's industry code gathers, how slip and rack demand is built from boat registrations, which measures a credit officer reads, how the federal and state leases under many marinas are tested, and what the marina approvals in the Loan Analytics dataset record. A short model at the end carries the demand estimate into a coverage test for a leasehold marina under 7(a). The general methods are in Trade Area and Demand Methods: Capture Rates, Penetration Rates and Gravity Models and Supply and Comparable Analysis: Counting Competitors, the Pipeline and the Properties a Study Leans On. The full worked case, a bank loan on a federal lake lease, is Worked Example: Conventional Bank Marina Acquisition and Dock Expansion Feasibility Study in Kentucky.

Code 713930: the businesses inside the marina record

The dataset sorts SBA loans into asset classes by the industry code on each loan record, a process described in From NAICS Code to Asset Class: How SBA Loans Are Assigned, and Where Two Industries Share One Code. Marinas are one of the classes with a code of their own. The 2022 NAICS Manual describes industry 713930 as "establishments, commonly known as marinas, engaged in operating docking and/or storage facilities for pleasure craft owners, with or without one or more related activities", and it names those activities as fuel and marine supply sales and the repair, maintenance or rental of pleasure boats ^[1]. The definition turns on the dock or the storage, not on the extras. A harbor with a restaurant and a boatyard, a dry stack building beside a launch ramp and a single lake dock with a bait counter all fit inside it, and the code on a loan record does not say which of them a loan financed.

Three edges of that definition matter to anyone reading the class's numbers. The first is the club. The NAICS index places yacht basins and yacht clubs with marinas in 713930 and sends yacht clubs without marinas to 713990 ^[2]. A club harbor can therefore sit in the marina record, and an SBA eligibility rule on private clubs, discussed below, decides whether a given club may borrow at all. The second edge is storage on land. The cross-references under industry 493190, other warehousing and storage, assign "Operating docking and/or storage facilities for pleasure craft owners" to 713930 ^[3], while industry 531130 covers businesses renting or leasing space for self-storage, outdoor space included ^[4]. A business that only keeps boats in a fenced yard could carry either code. This series reads RV and boat storage inside the self-storage record, as RV and Boat Storage Underwriting Method: Registrations, Space Demand and the Self-Storage Code It Shares explains, so the marina record may hold some storage yards and miss others. The third edge runs the other way. A business renting pleasure boats without operating a marina belongs in 532284, and one repairing them without a marina in 811490 ^[5], so rental fleets and repair shops with no slips of their own fall outside the record.

The marina record therefore describes a family of businesses that share a dock or a rack, not one business model. A study that sets the class's loan figures beside a project should say which kind of marina the project is and how much of its income comes from slips and racks, and should add that the record cannot be split along those lines.

Slip demand from the registered fleet

A slip is rented to a boat, so the demand model starts by counting boats. The Coast Guard compiles the states' registration counts every year in its Recreational Boating Statistics. Its 2024 edition puts 11,674,073 vessels on state registers, up 1.1% on the 11,546,512 of 2023 ^[6]. The national total is context only. A marina draws on the boats kept within a drive of its docks, and the file that counts them by county belongs to the state. The first data request in a marina study is that file, for the counties the marina's slip holders actually come from, which the billing addresses on the rent roll can show.

Registration counts are not uniform from state to state. The Coast Guard explains that registered vessels are those a state requires to be recorded, which includes numbered vessels and other forms of registration, and that not all states have the same registration requirements ^[7]. Its state table shows how far the scope varies. Florida registered 1,171,432 vessels in 2024 against 922,915 in 2023, under a system covering all motorboats and non-motorized vessels over 16 feet ^[8]. Michigan registered 795,494 in 2024 under a system covering all watercraft with stated exceptions ^[9], and New York 428,445 under a system covering all motorized vessels ^[10]. Two consequences follow. A fleet count from one state cannot be set against another's until the study has matched what each system registers, and a count heavy with canoes and kayaks overstates the boats that will ever rent a slip. And a jump as large as Florida's between those two years is a reason to ask the state whether its count or its system changed before reading the difference as new boats on the water.

Documentation leaves a further gap at the top of the market. The report defines a documented vessel as one of five or more net tons, owned by a United States citizen, used exclusively for pleasure and holding a valid marine document issued by the Coast Guard ^[11]. Tonnage on that scale reaches the largest boats in a harbor, the ones that rent the longest slips. A study should confirm with the state whether documented vessels appear in its registration count and, if they do not, find another way to count them before it sizes demand for long slips.

Length decides which boats need which kind of space. Of the 10,852,992 powered vessels in the Coast Guard's 2024 length table, 3,731,822 are shorter than 16 feet and 6,480,886 sit in the band from 16 feet to just under 26; only 552,622 run from 26 feet to just under 40, with 76,407 between 40 and 65 feet and 11,255 beyond 65 feet ^[12]. If boats of 26 feet and over make up the wet slip market and the band below them the dry storage market, as the model below assumes, the first is a small minority of the fleet and the second its broad middle. That shape is the reason a marina study models wet and dry demand apart and reads occupancy by slip length rather than as one average.

State economic accounts give a sense of scale without sizing any market. Among the conventional outdoor activities the Bureau of Economic Analysis measures, boating and fishing led the country in 2024 with $38.4 billion of current-dollar value added ^[13]. It was the largest conventional activity in 34 states, and the largest contributions came from Florida ($4.4 billion), California ($3.3 billion) and Texas ($3.0 billion) ^[14]. A value-added figure measures a state's boating economy. It counts no boats, slips or waitlists, and a study should use it as background for the state, never as evidence that a particular harbor will fill.

The demand model in this article runs in four steps, each with a labelled input.

1. Fleet by length band: vessels in a band equal the registered vessels in the market area times that band's share of all registrations.
2. Demand by kind of space: wet slip demand equals the vessels 26 feet and over times the wet keep rate, and dry storage demand equals the vessels 16 to under 26 feet times the dry keep rate.
3. Market balance: demand divided by the competing slips or racks in the market area, the subject's own included.
4. Credited occupancy: the subject is credited with the lower of that balance and the highest occupancy the study is willing to allow.

The two keep rates carry the judgment. A wet keep rate is the share of large boats kept in a marina slip rather than at a private dock, on a mooring or on a trailer; a dry keep rate is the share of mid-size boats kept in a marina rack or yard rather than at home. No public source used here measures either, so a study should support them with a census of the market's slips and racks, the occupancy and waitlists it finds at each competitor, and a count of the private docks that permits or a shoreline plan allow. The split at 26 feet is a simplification that a study replaces with the length limit of the subject's racks and the slip sizes on its dock plan. Step 4 treats the subject as an average competitor; the trade area article linked above covers adjusting a fair share for location and quality.

The ceiling matters as much as the demand. A full marina can still fall short of every slip let: boats change hands, a dock section can be closed for repair, and a long slip let to a short boat earns less than its length.

Rounded as shown; lines may not foot by one unit in the last place.

The inputs table carries both the demand model and the coverage model at the end of this article. The Coast Guard counts are sourced; the market fleet, the keep rates, the competing supply and the ceiling are labelled assumptions, local facts a study has to find, and the national length mix stands in for the county file's own mix until a study has it.

At the base inputs, Table 2 finds wet slip demand of 1,604 boats against 1,750 competing slips, a balance of 91.7%, and dry storage demand of 1,749 boats against 1,900 spaces, where the 92% ceiling binds. The three shocks show where the estimate is fragile. A market fleet 10% smaller cuts the credited wet slip occupancy to 82.5%, a wet keep rate 10 points lower takes it to 77.6%, and 200 more competing slips, one new marina or an expansion at a rival, bring it to 82.3%. Large-boat demand is a thin slice of a big fleet, so a small change in the slice, or in the share of it kept in slips, moves occupancy by several points. That sensitivity is the argument for building the estimate from the county file and a slip census rather than from a statewide ratio.

Wet slips, dry racks and the income a lender will lend against

Once demand is estimated, a credit officer reads a marina through a short list of measures. Table 3 sets out each one with the public source a study can anchor it to, and the paragraphs that follow explain how each is evidenced.

Occupancy comes first, and a study should read it by slip length band. A marina whose 30-foot slips are full and whose 50-foot slips are half empty has a demand problem that a blended average hides, and the length table shows why long slips are the harder ones to fill: the boats that need them are a small share of the fleet ^[12]. The evidence is the rent roll by slip, a dated waitlist by length and the turnover of recent seasons. A waitlist should carry dates, and deposits where they are taken, so a reader can tell a live queue from a list nobody has pruned.

Rent comes second. A study should state how the subject prices its slips, per linear foot of slip or per foot of boat, and on annual, seasonal or nightly terms, because each basis gives different revenue for the same dock and each contract behaves differently through a year. None of the public sources used here reports slip rents, so a study rebuilds the rent line from the rent roll and checks it against the posted rates of the competitors in its supply census.

Dry storage is measured by boat rather than by foot. A rack's capacity is set by the rated lift of the forklift, the bay heights and the length limit of the building, so a study should state the largest boat the racks accept and read dry demand against that size band only. A trailer lot or an outdoor yard competes with home storage and with stand-alone boat storage businesses, so the dry supply census has to look past other marinas.

The income mix comes third. Slip and rack rent recurs and has no cost of goods; fuel, the ship store and the service yard sell goods and labor and carry a cost of goods. A study should carry fuel as gallons times a margin per gallon rather than as gross sales, and the store and service lines at gross margin, so the lender sees what each contributes toward debt service rather than the turnover it generates. The model at the end prints the slip and rack share of income before expenses for that reason. Fuel also raises a compliance question. Subject to the exceptions it lists, the federal oil spill prevention rule reaches non-transportation facilities that, among other activities, store, transfer, distribute, use or consume oil and that, because of their location, could reasonably be expected to discharge oil in harmful quantities into navigable waters or adjoining shorelines ^[29]. One of its exemptions covers a facility otherwise within EPA's reach that meets both of two capacity tests ^[30], one of which is aggregate aboveground storage of 1,320 U.S. gallons or less of oil, counting only containers of 55 gallons or more ^[26]. A fuel dock sits on the water by design, so a study should record the facility's buried and aboveground oil storage capacity and whether a spill prevention plan exists, and should leave the legal reading to the environmental reviewer.

The lease charge comes fourth, and on leased bottom it is an operating expense that can move with revenue. Florida's Department of Environmental Protection states the annual sovereignty submerged land lease fee as the leased area in square feet times a rate, less any discount, plus any surcharge, or 6% of the gross revenue received from the use, whichever is greater ^[15]. A marina whose slip income is high for the size of its leased area pays the percentage, and its lease cost then rises with every rent increase. The same page describes a 10% Clean Marina discount for facilities that qualify and a 30% discount for facilities open to the public on a first come, first served basis ^[31]. The second carries conditions of its own: a marina "must be 90% or greater open to anyone, with no qualifying requirements and with only a one-year lease term" ^[32], and every publication for the facility has to say so, with signs on both the landward and the waterward side of the docks ^[33]. The page also makes every state lands leaseholder report the revenue it receives, directly or indirectly, each year on a self-report form ^[34]. Those reports are worth requesting, because they record slip income the operator has already declared to the state.

The condition of the docks comes fifth. Floating docks, pilings, utility pedestals and breakwaters wear out on their own schedules, and the collateral is worth little if the dock that earns the rent needs replacing early in the loan. A study should obtain a dock condition survey with remaining useful lives, carry a replacement reserve per slip in the operating statement and test the loan with that reserve in place. The model carries a reserve of $300 per wet slip as an assumption.

The last measures are the lender's own. For construction and development work, and for finished commercial property, the interagency real estate lending guidelines say a bank's lending policy should establish, in step with the size and type of the project, "Requirements for feasibility studies and sensitivity and risk analyses"; their example is "sensitivity of income projections to changes in economic variables such as interest rates, vacancy rates, or operating expenses" ^[27]. Those guidelines also ask for "Minimum standards for net worth, cash flow, and debt service coverage of the borrower or underlying property" ^[28]. For SBA loans, the floor is the one stated on the site's SBA program page: 1.15x of business coverage for standard 7(a) loans ^[22], and the same figure for 504 loans, tested on historical results or two-year projections ^[35].

Conventions. This article follows the conventions of the Loan Analytics worked examples. Coverage is tested against the program floor the site's program page states, where the program has one, and against a stated 1.25x lender assumption, and the higher of the two binds. Equity is measured at the loan the cash flow supports, with fees recomputed on that loan. An acquisition is tested on the seller's historical earnings, not on projections.

Seasonality runs under all of these measures. Where a marina's water freezes or its boaters leave for the winter, revenue arrives in a season while debt service falls due every month, and an annual coverage ratio can pass while the borrower runs short in late winter. A study should add a monthly cash projection to its annual model and size the working capital that carries the slow months. How the coverage ratio itself is built is covered in Debt Service Coverage in a Feasibility Study: How the Ratio Is Built, and Which Floor Binds.

The bottom under the docks: leases, permits and the loan term

What sets a marina apart from most commercial property is the question of who owns the bottom. On a Corps of Engineers reservoir the project land is federal, and the operator's right to its site rests on a lease from the Army. In Florida, the Board of Trustees of the Internal Improvement Trust Fund ^[36] is the entity that holds title to state-owned lands ^[37], and the state's submerged land lease fee potentially reaches commercial marinas ^[38]. On a private basin or a dredged canal the operator may own the bottom outright. A study should establish which of these applies to each part of the footprint, docks, breakwaters, fuel dock and channel, because the answer decides what a lender can take as collateral and for how long.

Corps of Engineers projects

At a federal water resource project, the statute lets the Secretary of the Army lease project lands, structures on them included, "for such periods, and upon such terms and for such purposes as he may deem reasonable in the public interest" ^[39]. No term is fixed there, so the term is whatever the lease says, and the lease itself has to be read. The same section provides that "The water areas of all such projects shall be open to public use generally for boating, swimming, bathing, fishing, and other recreational purposes", with shore access kept for the public too, in each case where the Secretary finds that use not contrary to the public interest ^[40]. A marina on such a lake sells moorage and services on water it cannot close; its franchise is its lease and its docks, not the lake.

The Corps shoreline rules shape the competition. Section 327.30 of title 36 gives policy and guidance for managing the shorelines of Civil Works projects ^[41]. Its appendix is explicit about private docks: "Permits for individually or group owned shoreline use facilities may be granted only in Limited Development Areas when the sites are not near commercial marine services", and only where the use will not despoil the shoreline or inhibit public use ^[42]. In drawing up a project's Shoreline Management Plan, district commanders give consideration to the effects of added private boat storage facilities on commercial concessions ^[43]. A private permit gives its holder no interest in land: "The issuance of a private shoreline use permit does not convey any real estate or personal property rights or exclusive use rights to the permit holder" ^[44]. Commerce on the project needs the Corps' leave as well: "The engaging in or solicitation of business on project land or waters without the express written permission of the District Commander is prohibited" ^[45]. For a study, these rules mean that the supply census on a Corps lake begins with the plan's shoreline allocations and the list of concessions, and that a rival commercial operation cannot simply open on the shore. How a study handles a Corps rent schedule it cannot source is shown in the Kentucky worked example linked above.

State sovereignty submerged land

Florida's state lands office publishes a plain account of how its leases work. Its Department of Environmental Protection says most sovereignty submerged land leases have a standard term of five years, and that a facility 90% open to the general public for rent on a first come, first served basis has a standard 10-year term ^[21]. Some leases may qualify for a term of up to 25 years if they meet the criteria in the rule ^[20]. Renewals and assignments to a new upland owner go through the Division of State Lands, and all fees must be current and income reported before any modification is allowed ^[46]. A facility whose lease requires it to be open to the public on a first come, first served basis may offer 10% of its slips for exclusive use ^[47], which caps how much of such a dock can be sold as exclusive rights.

For a buyer, a sale of the upland business is also a request to assign the lease, and the term the state grants decides how long the collateral lasts. A study should obtain the current lease, the fee history and the revenue reports, and should state which term the facility qualifies for and why.

Lease term against loan term

Each lending route treats a leasehold in its own text. For a 504 loan, proceeds may pay for buildings, improvements, machinery and equipment on land leased to the borrower by an unrelated lessor ^[48], provided the remaining term of the lease, including options to renew exercisable only by the lessee, equals or exceeds the term of the debenture ^[23], the borrower assigns its interest in the lease to the CDC with right of reassignment to SBA, and the loan is secured by a recorded lien against the leasehold estate and other collateral as necessary ^[49]. A five-year lease meets the first test only if renewal options that the lessee alone can exercise carry it past the debenture's term, so a study should quote the renewal clause rather than describe it. Under the USDA program, where proceeds pay for leasehold improvements, the lease must contain no reverter clauses or restrictive clauses that would impair the use or value of the property as security, and its term must equal or exceed the term of the loan ^[50].

The 7(a) term rule turns on the borrower and the asset: the "shortest appropriate term, depending upon the Borrower's ability to repay" ^[51], then "Ten years or less, unless it finances or refinances real estate or equipment with a useful life exceeding ten years" ^[52], with up to 12 more months where a loan for equipment or leasehold improvements needs the time to finish the installation or the improvements ^[53], plus an outer limit of 25 years counting extensions, which the real property share may pass by the time needed to finish construction or improvements ^[19]. Whatever the route, a study should test the loan with its amortization held inside the remaining lease term, because the income that repays the loan stops if the right to keep docks on the water ends. For a bank, the interagency guidelines say underwriting standards should address the maximum loan amount and maximum loan maturities by type of property, and amortization schedules ^[54], which leaves the leasehold to the bank's own policy, as Conventional Bank Loan Method: Appraisal Rules, Supervisory LTV Limits and the Study a Bank Reads explains.

Permits for docks and dredging

The Rivers and Harbors Act makes it unlawful to build any wharf, pier, bulkhead or other structure in a port, harbor, canal, navigable river or other water of the United States ^[24] outside established harbor lines, or where none have been established, except on plans recommended by the Chief of Engineers and authorized by the Secretary of the Army ^[55]. The same section makes it unlawful to excavate or fill, or otherwise alter the condition or capacity of, a harbor, canal, lake or navigable channel ^[25] unless the work has been recommended by the Chief of Engineers and authorized by the Secretary of the Army before it begins ^[56]. Two marina risks follow. The docks on the water should match the plans the Corps authorized, so a study should compare the two. And a basin that silts up needs maintenance dredging, which is excavation; a study should say when the basin was last dredged, under what authorization, and what depth its deepest slips need.

Eligibility: who can borrow against a marina

For SBA lending the first question is whether the borrower operates the marina. Among the businesses the regulation bars are "Passive businesses owned by developers and landlords that do not actively use or occupy the assets acquired or improved with the loan proceeds", though an Eligible Passive Company can still qualify ^[57]. A study should describe what the operator does on the property each day, slip management, fueling, launching and hauling, security and maintenance, so the lender can apply that test to facts. An owner that leases the whole marina to a separate operating company is in the landlord position, and the loan then has to fit the Eligible Passive Company structure the regulation allows, and on that structure the regulation is direct: "In a 7(a) loan that includes working capital and/or the purchase of other assets, including intangible assets, for the Operating Company's use, the Operating Company must be a co-borrower" ^[58]; SBA 7(a) Method: What 13 CFR 120 Tests and How a Feasibility Study Answers Each Test sets out the test. Where the project includes a building the borrower leases out in part, a restaurant or an office over the ship store, the occupancy rules come into play with their other conditions: the borrower of an existing building must be one that "permanently occupies and uses no less than 51 percent of the Rentable Property" ^[59], and in new construction the share rises to 60 percent, with no more than 20 percent let on permanent leases ^[60], and the borrower must also be one that "plans to permanently occupy and use within three years some of the remaining space not immediately occupied and not permanently leased" ^[61], as well as one that "plans to permanently occupy and use within ten years all of the remaining space not permanently leased" ^[62].

The second SBA rule particular to the class concerns clubs. Its ineligible list names "Private clubs and businesses which limit the number of memberships for reasons other than capacity" ^[63], and NAICS codes a yacht club with a marina inside 713930 ^[2]. The test lies in the reason for a limit, not in the word club. A marina that caps annual slip contracts because it has only so many slips limits for capacity; one that admits members only by vote or sponsorship may be limiting for another reason. A study for a membership marina should quote the membership rules and say which side of that line they appear to fall on, leaving the decision to the lender.

Size is the third, and the regulation is brief on it: "The maximum loan amount for any one 7(a) loan is $5,000,000." ^[16] Requests above that, such as a large acquisition or expansion, need another route, whether 504, a bank loan, a B&I guarantee or a combination, and SBA 504 Method: The Job Test, the Project Split and What a Study Must Show the CDC explains the 504 structure.

Under the USDA Business and Industry program, the eligible project uses include "Tourist and recreation facilities, including hotels, motels, bed and breakfast establishments, and resort trailer parks and campgrounds operated as a public or private commercial enterprise" ^[64]. The examples in that category follow the word including and do not name marinas, so a study should present a marina as a recreation business run as a commercial enterprise and let the agency confirm that reading. The rule's ineligible list opens with golf courses and racetracks, takes in for-profit zoos and safaris, and bars publicly-owned or non-profit amusement parks and water parks ^[65] together with "similar recreational type facilities inherently commercial in nature and primarily used for recreational purposes" ^[66]. A for-profit marina is not on that list as written, but a marina owned by a public body or a non-profit should be read against it before anything else. Location is the other gate: the rule's rural definition reaches "any area of a State not in a city or town that has a population of more than 50,000 inhabitants" ^[67]. Beyond the city limits, the urbanized fringe of such a city is excluded as well ^[67], though the rule carves back in a part of that fringe found to be rural in character ^[68], and Rural Development's Under Secretary decides each such request for the project at hand ^[69]. A harbor inside a large city therefore falls outside the program, and one in the urbanized fringe beside it qualifies only with such a determination. Leasehold improvements carry the lease conditions set out above ^[50], and USDA B&I Guarantees Under 7 CFR 5001: What the Agency Tests and How a Study Answers covers the rest of the program.

For a bank loan, eligibility is the bank's own policy. The interagency guidelines ask each institution to set internal loan-to-value limits that should not exceed the supervisory limits ^[70], and the supervisory figure for improved property is 85 percent ^[71]. That figure is a reference, not a wall: loans above a supervisory limit may be appropriate in individual cases on the support of other credit factors ^[72], and the guidelines say all such loans together should not exceed 100 percent of total capital ^[73]. On any route, a study should list every authorization the marina operates under, the lease or leases, the dock and dredging permits and any fuel storage plan, each with its expiry or renewal date.

The marina record in the SBA loan data, FY2017 to FY2026

The Loan Analytics loan dataset holds 220 ^[74] marina approvals under 7(a) and 80 ^[75] under 504 for FY2017 to FY2026, counted as gross approvals with cancelled approvals included. The 7(a) approvals total $246,047,300 ^[74], with a median loan of $461,750 ^[74] and a middle half running from $147,600 ^[74] to $1,757,750 ^[74]. The 504 approvals total $101,653,000 ^[75], with a median of $965,500 ^[75]; the dataset counts a 504 approval at its debenture alone, so the bank loan that shares each 504 project is not in those dollars. Franchised marinas are few: 4.55 percent ^[74] of the 7(a) approvals and 10.00 percent ^[75] of the 504 approvals carry a franchise code. The class has a code of its own, so these figures are not shared with another class.

Year by year, 7(a) marina approvals ran from 21 ^[74] in FY2017 to a high of 34 ^[74] in FY2021, fell to 14 ^[74] in FY2023, recovered to 22 ^[74] in FY2025 and stood at 11 ^[74] in FY2026. The 504 count peaked at 13 ^[75] in FY2022 and was 5 ^[75] in FY2026. Counts this small are a record of activity, not a trend to project, and this article assigns no cause to their rises and falls.

Florida holds more of the class's 7(a) approvals than any other state, 34 ^[74] of them, with Michigan next at 18 ^[74] and New York at 15 ^[74]; the approvals spread across 43 ^[74] state codes in all. Florida also leads the 504 approvals with 12 ^[75]. The record shows where marina loans were approved, not why they gather there, and this article does not guess at the reason.

Below the national level the cells thin out quickly. Florida's marina record, both programs together, counts 46 ^[76] approvals and prints a cancellation floor of 23.08 percent ^[76] on 39 ^[76] approvals from FY2017 to FY2024, while the charge-off side of the Florida record is withheld: fewer than 30 loans. Michigan's record counts 25 ^[77] approvals, too few for either rate to print, so each is withheld: fewer than 30 loans. A study for a marina in most states will therefore set its project against the national record, and should say so, rather than against a state rate that the dataset does not print. The state page for Florida marina loan data and the program pages for 7(a) marina loans and 504 marina loans hold the same cells.

The block below gathers the loan figures used in this article, each beside its key.

Loan Data Behind This Article

Every figure in this table comes from the Loan Analytics loan dataset, analytics-loan-data freeze-3 (commit 360c856), and carries its key. SBA rates are approval-cohort floors and are withheld when fewer than 30 loans stand behind them.

Reading the class's floors against the program's

The charge-off floor for marina 7(a) loans approved from FY2017 to FY2021 is 0.00 percent ^[74], against 6.33 percent ^[78] for the whole 7(a) program over the same approval years. Both are approval-cohort floors. They count the loans recorded as charged off so far among the disbursed loans of those cohorts, so they can only rise as the cohorts age. The marina figure rests on 118 ^[74] loans, of which 37 ^[74] are still open, and SBA's files withhold the status of any such open loan under a FOIA exemption ^[81]. On the narrower measure, which counts a charge-off only when it came in a loan's first five years, the marina rate is 0.00 percent ^[74], against 3.72 percent ^[82] across the program.

A zero on 118 ^[74] loans is a real observation and a narrow one. It says that none of the class's 7(a) loans from those cohorts had been recorded as charged off by the dataset's as-of date. It does not say that marina loans are safe, that none is in trouble, or that a loss will not be recorded later, and on a cohort this size a single charge-off would lift the rate by close to a full point. The reasons a published loss rate of this kind can only understate are set out in The Approval-Cohort Charge-Off Floor: Why a Published SBA Loss Rate Can Only Understate. This article assigns no cause to the class's clean record so far, and a study should cite the zero as what it is: the absence, to date, of a recorded charge-off in a small cohort.

The 504 charge-off rate for the class is withheld: fewer than 30 loans. Its cohort of disbursed loans is too small for a rate to mean much, as Why a Rate on Fewer Than 30 Loans Is Withheld: Small Samples and the Suppression Rule explains, and a study that needs a 504 loss benchmark for a marina has only the program's own floor for the same cohort, 0.35 percent ^[83], which is not a marina figure.

Cancellation is where the class departs from its program. Of the marina 7(a) approvals from FY2017 to FY2024, 14.44 percent ^[74] were cancelled before disbursement, against 11.24 percent ^[79] for all 7(a) approvals in those years. Under 504 the marina floor is 27.94 percent ^[75], against 13.60 percent ^[80] for the whole 504 program. Each marina figure is a floor while some approvals remain undisbursed. Counting the 3 ^[74] undisbursed 7(a) approvals as cancelled would give a ceiling of 16.04 percent ^[74], and the 504 ceiling on the same basis is 35.29 percent ^[75]. The 504 floor rests on 68 ^[75] approvals, enough to print and few enough that a small number of approvals moves it.

An approval that is cancelled ends before a dollar is disbursed, which makes it a different event from a loan that fails after funding, as Cancellation Is Not Charge-Off: The Two Ways an SBA Approval Can End Without Repayment explains. The record does not say why a given marina approval was cancelled, and it cannot tell a borrower who found cheaper money from a sale that fell through or a condition that was never met. The data also cannot say whether lease consents, permits or dock surveys played any part in the class's cancellations, and this article does not suggest that they did. The lesson for a study is procedural. Every condition that could stop a marina loan from closing, from the lessor's consent to an assignment to the permit for the docks as built, should be resolved or scheduled in the study, so that the approval does not rest on an item nobody has checked.

A short worked example: a leasehold marina under 7(a)

The model applies the demand estimate and the lease rules to one hypothetical marina on Florida sovereignty submerged land. Every operating figure is a labelled assumption, and the registration counts, the Florida lease terms and fee percentage, the prime rate, the 7(a) term limit and the site's 7(a) floor are sourced in the inputs table. The marina has 140 wet slips averaging 34 feet and 120 dry storage racks, and an existing operator borrows $3,600,000 under 7(a), at a variable rate of prime plus 2.75 points, to replace the docks. Its operating figures stand for the trailing year that operator would document, not for a projection of a new business, and the loan falls inside the 7(a) maximum ^[16].

At the base case, Table 5 shows net operating income of $544,876 after a lease fee of $31,200 and a dock reserve of $42,000. Debt service on the request, amortized over 25 years inside an assumed 25-year lease, is $384,971, so coverage is 1.42x against the binding minimum, the 1.25x lender assumption. That assumption binds because it is higher than the 7(a) floor of 1.15x given on the site's SBA program page ^[22]. At the binding minimum the cash flow supports a loan of $4,076,261, so the request has room to spare.

The demand shock carries straight through. A market fleet 10% smaller lowers the credited wet slip occupancy to 82.5% and the dry occupancy to 82.8%; net operating income falls to $470,061 and coverage to 1.22x, below the binding minimum, and the supported loan of $3,516,559 falls $83,441 short of the request. A prime rate 2 points higher reaches the same 1.22x by another route. Neither shock is severe, and either one is enough to fail the test, which tells a lender how thin the base case's cushion really is.

The lease columns show the class's particular risk. If the state grants the 10-year standard term for a facility open to the public rather than the longer term the base case assumes, and the amortization is held inside the lease, debt service on the same loan rises to $564,927 and coverage falls to 0.96x, with a supported loan of $2,777,779. On the 5-year standard term, coverage is 0.60x and the supported loan $1,719,592. Nothing about the docks, the boats or the market changes in those two columns; only the length of the right to keep docks on the bottom does. That is why a study should treat the lease term, the renewal options and the consents to assignment and to a leasehold mortgage as items to resolve before closing rather than as background.

The Kentucky case named in the opening paragraphs runs these questions at full length for a bank loan on a Corps lease, and Sensitivity and Stress Testing: Break-Even Points, Shock Sizes and What a Lender Should See explains how a study sizes each shock.

The documents a marina file needs

A marina file is complete when a credit officer can test the boats, the business and the bottom separately. A study should gather the following.

• The state's registration counts for the market counties, with the scope of the state's system stated ^[7] and a note on whether documented vessels are included ^[11].
• A census of competing slips and racks with posted rates and, on a Corps project, the shoreline plan's allocations and concessions ^[43].
• The rent roll by slip and length band, a dated waitlist and the turnover of recent seasons, read against the fleet's length mix ^[12].
• Every lease under the docks, with its remaining term, renewal options and who may exercise them, and the lessor's consents to assignment and to a leasehold mortgage, matched to the lease test of the lending route ^{[23] [50]}.
• The lease fee formula, the fee history and the revenue reports already filed with the lessor ^{[15] [34]}.
• The authorizations for the docks as built and for the most recent dredging ^{[24] [25]}.
• The oil storage capacities at the fuel dock and, where one is required, the spill prevention plan ^[26].
• A dock condition survey, the replacement reserve it supports and a monthly cash projection through the off season.
• For SBA, a description of the daily operation for the passive business test ^[57] and the membership rules of any club ^[63]; for USDA, the rural area test ^[67].

Most of these documents already sit in the operator's office or the lessor's file. What a feasibility study adds is the arithmetic that ties them together: the fleet that fills the slips, the income the slips and racks earn, the debt that income can carry, and the years the lease leaves to carry it. That is the feasibility and sensitivity work a bank's policy should demand on commercial projects under the interagency guidelines ^[27], with the SBA and USDA lease tests added where those programs apply.

Related Pages on Loan Analytics

• The Loan Analytics methodology series (all articles)
• How a feasibility study is done: the Loan Analytics methodology
• SBA feasibility studies (7(a) and 504)
• USDA feasibility studies
• Bankable feasibility studies for conventional loans
• Marina: loan data and feasibility studies
• Loan data by state
• Loan data by asset class
• Worked examples (case studies)
• Worked Example: Conventional Bank Marina Acquisition and Dock Expansion Feasibility Study in Kentucky

Commission a Feasibility Study

Loan Analytics prepares lender-grade feasibility studies for SBA 7(a), SBA 504, USDA Business and Industry, conventional and EB-5 financing, built on the methods this series sets out. A study is not an appraisal: it tests whether a project's market, costs and cash flow can carry the debt a lender is asked to approve. To discuss a study for your project, contact Loan Analytics.

Daniel Smith, MAI, Loan Analytics