SBA 504 RV Park Feasibility Study

RV parks: a 504 class with its own lenders

From FY2017 to FY2026, SBA approved 281 RV park and campground loans under 504, for $240.2 million. Its median loan of $576,000 is lower than the class median once 7(a) is counted, though not by enough to pass our distinctness screen, and half of these loans fall between $354,000 and $956,000. The 504 share of this class is substantial, which makes this page more than a footnote to the 7(a) record.

The CDC table is concentrated. Midwest Business Finance Corporation holds 60 loans and $35.2 million, and WBD, Inc. 38 and $30.0 million, well ahead of Mountain West Small Business Finance with 14 ($11.3 million), Granite State Economic Development Corporation with 12 ($8.8 million), and the 11 loans of Florida First Capital Finance Corporation, Inc. carry $17.0 million. The geography follows the lenders: Minnesota leads with 67 loans and Wisconsin has 39, ahead of Texas with 32 and Utah with 16. Volume rose from 13 loans in FY2017 to 45 in FY2021, and FY2023 brought the largest dollar total, $34.2 million, on 28 loans; FY2026 had 30 loans for $29.6 million. Franchise affiliation, 4.6% of loans, points to a few branded campgrounds among mostly independent parks.

Floors for a seasonal business

Cancellation after approval is at least 12.2% of FY2017 to FY2024 approvals, and no more than 16.2% even if every undisbursed loan were cancelled. The 109 loans disbursed over FY2017 to FY2021 show no charge-off yet; the floor and its five-year counterpart are each 0.00%. For a borrower that is encouraging, and for a lender it is a floor on a modest cohort, not a guarantee.

What a park study must test

One code covers RV parks, RV resorts and campgrounds, so a full-hookup resort and a tent campground sit in the same record, and the study has to say which the project is. A feasibility study for a 504 RV park then has to test demand by season and drive-time market, with the competing parks' rates and occupancy; cost for utilities, pads, roads and amenities; debt service coverage across a full year including the slow months, since a park can earn most of its revenue in one season; and the appraisal, which must rest on the park's income and on comparable park sales rather than on the land alone.