SBA 504 Marina Feasibility Study

Cancellation and size in the 504 marina record

The 504 program approved 80 marina loans from FY2017 to FY2026, worth $101.7 million, and this small record stands apart on cancellation and on size alike. Start with cancellation. At least 27.9% of marina approvals dated FY2017 to FY2024 were cancelled, one of the highest cancellation floors in the 504 record, and if every marina approval still undisbursed were also to cancel, the ceiling would be 35.3%. The 7(a) marina record cancels far less. On size, the median 504 marina loan is $965,500, well above the marina median across both SBA programs and distinct, on our test, from the 504 all-class median as well. Half of 504 marina loans fall between $513,750 and $1.8 million.

Who lends, and where the slips are

Florida Business Development Corporation holds 10 marina loans worth $15.9 million. Florida First Capital Finance Corporation, Inc., SomerCor 504, Inc. and Empire State Certified Development Corporation hold 5 each, worth $9.2 million, $6.8 million and $5.7 million. Florida leads the states with 12 loans, followed by Michigan with 7, Connecticut with 6, and Illinois and New York with 5 each; California, Kansas, Massachusetts and New Jersey have 4 apiece. Franchise brands account for 10.0% of the loans. Annual volume is small and uneven, peaking at 13 loans and $21.8 million in FY2022 and falling to 5 loans and $4.5 million in FY2026. With fewer than 30 marina loans in the funded cohort, the charge-off rate stays withheld and unnumbered.

What a marina study must resolve before approval

A cancellation floor this high tells a borrower that marina deals often come apart between approval and funding, and the feasibility study should find the weak point first. Demand has to be shown from slip and storage waitlists, boat registrations in the area, the length of the boating season and the rates competing marinas charge. Cost is where waterfront projects surprise: dredging, docks, bulkheads, fuel systems and storm repairs, with environmental and waterway permits that can take longer than the borrower planned. Debt service coverage should rest on slip rentals, winter storage, fuel and service income tested through a short season and a storm year, with both 504 liens counted. The appraisal has to deal with submerged land leases, riparian rights and few likely buyers; the study should show the income an appraiser can rely on and the terms of any lease the marina depends on. No coding caveat applies to the 504 marina class.