Boatyard and Service Yard Feasibility Study for SBA 504, SBA 7(a) and Bank Loans

A boatyard earns its money on labor, parts, haul-out and winter storage, and its two largest capital items, the travel lift and the wash pad, are the two a lender most often misclassifies. MMCG Invest prepares boatyard, service yard and haul-out feasibility studies for SBA 504, SBA 7(a), USDA Business and Industry and conventional financing that split the lift onto its equipment term and the building and lift well onto the real estate term, budget the wash-water and stormwater compliance the state permit actually requires, build storage and service revenue from posted yard schedules and wage data, put the open question of whether a repair and storage yard is a "marina" under SBA's transient rule to the lender in writing, and report the debt service coverage ratio (DSCR) by year.

A yard is a service business attached to a marina, and the public record describes it badly. Michigan's registered fleet fell from 815,317 boats in 2023 to 795,494 in 2024 and about 16.6 percent from 2003, yet Michigan boating spending rose to $11.7 billion, up 82 percent from 2018 on NMMA's count, and Macomb County alone reports more than 16,000 slips and 26 marinas on Lake St. Clair with Oakland, Wayne and Macomb the state's top three counties for registrations. The yard thesis is a fixed-to-declining fleet that is aging and growing larger and so needs more service hours per boat, not a growing boat count. Inside heated winter storage is the most dependable revenue input in the format, posted at $8.95 to $10.25 per square foot of length times beam across the Great Lakes, with inside cold at $6.50, outside at $3.50 per square foot, shrink wrap at $13 to $20 per foot, and haul or launch at $8 to $12 per foot by length. Billed labor rates are the least dependable: no Michigan yard posts one, and the out-of-region schedules run $110 to $170 an hour with bottom paint averaging about $140 a foot at one Florida yard. Technicians cost $21.10 an hour on average in Michigan's northwest Lower Peninsula in 2022 and $27.67 at the national median in 2025.

The second reason is the rule. SOP 50 10 8, carried into 8.1 for applications received on or after October 1, 2026, makes a marina an eligible rental business only if more than 50 percent of prior-year revenue comes from transients staying 30 days or less; the Elmwood Township marina on Grand Traverse Bay earned about 15 percent of its dockage from transients in 2022, and a Great Lakes yard earns most of its dockage from seasonal tenants and most of its total revenue from storage and service. Whether a business that repairs and stores boats and also rents seasonal slips is a "marina" for that rule at all is a question MMCG has not seen SBA answer, and the study presents the yard as a boat repair and storage business that also has slips, with the lender's written eligibility determination as the first condition. The general marina method is on the marina feasibility study hub.

An existing yard that adds a travel lift, a lift well, hardstand and a service building is a 504 expansion. The building, site work, lift-well piers and paving go on a 20 or 25-year debenture and the lift on a 10-year equipment term matched to its economic life, each described in its own loan documents; the October 2026 debenture priced at an effective 6.97 percent on the 25-year term and 6.59 percent on the 10-year. The borrower contribution is 10 percent for an existing business on general-purpose property and 15 percent if the CDC classifies the yard as limited or single purpose, which marinas are on SBA's example list and boatyards are not named as, so the study underwrites at 15 percent until the CDC rules in writing. Occupancy is 51 percent of an existing building or 60 percent of new construction under 13 CFR 120.131, with slips and docks counted as rentable property. A Phase I is required on every marina loan under SOP Appendix 6 and on any business that dispenses fuel, and a yard with a historic wash pad or hull-sanding area should expect a Phase II. The rules are on the SBA regulatory spine and the SBA 504 feasibility study page; a lift bought without real estate, or a yard in leased space, runs on SBA 7(a) with the lease term matched to the loan. A rural yard is a USDA Business and Industry borrower with no transient rule and 20 to 25 percent equity; see the USDA feasibility study page. The fiscal 2027 waiver of 7(a) and 504 upfront fees reaches rural-county yards on loans of $700,000 or less.

Collateral is the format's own question. No Michigan statute or decision MMCG found settles whether a travel lift, lift-well piers, docks or storage racks are real property, fixtures or equipment, so the study recommends the lender describe the lift in the mortgage and file a UCC-1 fixture filing in the county real property records, insure it as equipment, and require that the Great Lakes bottomlands lease for the lift well run longer than the debenture and be assignable. The public 504 precedents, a California marina refinance and Mid-Atlantic and Great Lakes CDCs listing marine facility acquisition as an eligible use, do not include a Michigan boatyard, and the study says so.

Revenue is built in square feet, haul-outs and hours. Winter storage is priced per square foot of length times beam by type, inside heated, inside cold, outside and shrink-wrapped, against the yard's capacity by type, with Keenan Marina's 24,000 square feet of heated space in Harrison Township as the in-submarket reference. Haul-outs are modeled from the fall peak, which runs about six to seven weeks from mid-September to the end of October at comparable northern yards, about 40 hauls a week at one Minnesota marina and eight to ten a day at a Wisconsin one, and from a spring launch peak of similar length. Service hours are modeled from technician headcount, the billed rate the subject's own schedule sets, and the share of winter work that can only be sold with heated indoor bays, which is the case for the service building. Parts margin, labor gross margin and the mix between mechanical, fiberglass and paint are not published for Michigan yards and are carried from the operator's records as flagged assumptions, and the study requires a dated survey of ten to twelve Lake St. Clair yards because the posted record covers only one.

Seasonal dockage is priced from Michigan's state harbor schedule, which runs $770 to $2,420 for a 20-foot seasonal slip across ten rate tiers in 2026 and $39 to $121 per foot above 60 feet, and from the Elmwood Township record of $580,209 seasonal and $105,805 transient. Storage contracts run from about September 1 or 15 to Memorial Day or June 15 across the posted schedules, so the study models cash monthly against a twelve-month expense base and sizes the reserve to the spring. The operating ratios of a full-service marina, payroll near 30 percent of revenue, insurance near 4 percent, repairs near 9 percent on the Port of Edmonds' 2026 budget, are carried as directional, because no published Michigan yard statement shows service labor, parts and storage.

The wash pad is the line that decides the environmental budget. Michigan EGLE classifies marinas under SIC 4493 and requires NPDES industrial stormwater coverage, normally a certificate of coverage under the general permit, for any marina involved in boat maintenance, rehabilitation, repair, washing, painting, fluid changes, winterization or fueling that discharges stormwater to surface waters; coverage needs a MiEnviro account, a certified industrial stormwater operator, a stormwater pollution prevention plan, and structural and nonstructural controls in place or scheduled. The general permit does not authorize the discharge of wastewater from boat or equipment washing, with no exemption for biodegradable products, so the yard's options are an individual NPDES permit, groundwater authorization, discharge to the local treatment plant, a holding tank with pump and haul, a closed-loop recycling system, or evaporation. Winterizing outdoors is exposure; outside storage of winterized boats is not, which supports the indoor bays. Fines run to $25,000 a day. The public cost record puts wash-water recycling equipment at about $35,000 and a full project with stormwater re-grading and diversion at more than $350,000, with filters and parts under $1,000 a year, so the study carries compliance inside the paving and site line rather than as a separate equipment item.

Washington's copper antifouling restriction, which would have barred paint above 0.5 percent copper on recreational vessels from January 1, 2026, did not take effect because Ecology could not find safer alternatives; the irgarol and cybutryne bans are in force and the next report is due by June 30, 2029. Boatyard general permits in Washington, Maryland and Florida, hazardous waste generator status, and Michigan's industrial stormwater permit fee were not found in the public record MMCG reviewed and are confirmed with the agency at scoping. The Michigan Clean Marina Program, run by MBIA, Michigan Sea Grant and EGLE, certified its 105th marina in November 2025 and is voluntary. The Michigan and Washington state pages carry the state requirements.

A new lift well with piers on Great Lakes bottomlands runs through the single EGLE and Corps joint permit application in MiEnviro, which covers Parts 301 and 325 of NREPA and Sections 10 and 404 in one filing. Fees run $250 for a marina expansion of 11 to 50 slips, $10 per slip above 50, $2,000 for a major project such as new commercial docks of 300 feet or more or dredging of 10,000 cubic yards or more, $500 for everything else, and $100 to the Corps for a commercial applicant; the completeness review runs 0 to 45 days, the technical review 1 to 90 days, with a decision usually 30 to 90 days after a complete application and a 20-day public notice on an individual permit. Occupying bottomlands needs a separate application for conveyance alongside the permit, and the lease carries an annual fee. The study budgets at least a 90 to 180 day pre-construction permit window and treats the Detroit District's regional conditions as a scoping item.

Water level is the engineering constraint. Lake Michigan-Huron set an all-time record low monthly average of 576.02 feet in January 2013 and record highs in 2020, five inches above the 1986 record, a swing of about 6.3 feet in seven years, and Lake St. Clair averages only ten feet deep. The lift well and approach channel are designed across the documented range, and the study runs a low-water year that cuts haul capacity for deep-draft boats and adds unbudgeted dredging, and a high-water year that floods the hardstand. Ice damage and bubbler practice are carried as operating conditions from the yard's own record. Federal channel dredging on the Great Lakes ran $5.60 to $9.29 per cubic yard at volume in 2020 and $35 to $57 at Fairport and Conneaut in 2025 with upland processing; the private basin is the owner's cost at the small-volume rate.

No public purchase record prices a new 75-ton travel lift. The best anchors are the fiscal 2026 MARAD Small Shipyard grants of $750,000 to a Port Angeles, Washington operator and $763,401 to a St. Croix yard for 75-ton lifts, which at the program's 75 percent cost cap imply projects of at least $1.0 million each including whatever slings, variable-width options and freight the grantees added; used 75-ton lifts are listed at $110,000 for a 1990 70-ton machine to $290,000 for a 2004 unit, a quarter to a third of the new-lift floor; Port Townsend paid $3.09 million for a large variable-width lift in 2025 and a Mackinac Island yard spent $752,933 in 2020 to upgrade an 80-ton lift to 200 tons. A new lift is rated at 165,000 pounds for boats to about 80 feet. The study carries a dealer quote including freight, assembly and slings as the budget line and the MARAD-derived floor as its reasonableness check, and it refuses the used-lift price in an as-proposed budget. Lift-well piers, hardstand paving and a pre-engineered service building have no public Michigan bid and are priced from a contractor estimate, with the wash-water system inside the paving line. The 504 stack puts the first mortgage at 50 percent or more, the debenture at up to 40 percent and $5 million, and the borrower at 10 or 15 percent, with the lift on its own ten-year piece.

The study reports DSCR by year against 1.15 times on a 504 or standard 7(a) loan, with the split terms shown and the blended single-term structure the sponsor proposed shown beside it so the lender can see the difference. The cases are the yard's: storage occupancy by type, haul-out count, billed hours and rate, parts margin, the low-water and high-water years, a wash-water compliance cost at the high end of the public range, and the transient reading on which the whole file depends. Break-even is stated in heated square feet and billed hours. Where SBA reads the rule literally against a yard with seasonal slips, the study shows the conventional and USDA B&I structures that do not depend on it.

A MMCG boatyard study includes the eligibility analysis with the characterization question written for the lender, the registration and fleet market, the yard census with posted storage, haul and labor schedules and the dated survey that fills the gaps, the environmental review with the stormwater permit path and wash-water method, the joint permit and bottomlands analysis, the storage and service projection, the lift and building cost with the dealer quote and the MARAD check, the capital stack with the split terms, the DSCR schedule by year, the water-level cases, the collateral discussion on the lift and the bottomlands lease, and a signed conclusion. Standard delivery is nine to sixteen business days; expedited delivery in five to seven is available. Fees begin at $4,900 for a single-site SBA 7(a) study and run $7,500 to $15,000 for 504 and USDA studies. Revisions required by the lender or agency are made at no additional cost under MMCG's written acceptance guarantee. See MMCG's feasibility study methodology and where we work.

Great Lakes boatyard and 75-ton travel lift expansion on SBA 504, Lake St. Clair, Michigan: an existing yard restructured onto a split real estate and equipment term with wash-water compliance budgeted, conditioned on SBA's written reading of whether a boatyard is a marina for the transient rule. The storage-building version is on the dry-stack boat storage feasibility study page and the wet-slip version on the coastal marina feasibility study page.