Model Case: Chesapeake Wet-Slip Marina Acquisition With Fuel Dock, 180 Slips, Anne Arundel County, Maryland, SBA 7(a) Under SOP 50 10 8.1 Appendix 15 With 504 on the Real Estate

A model feasibility and valuation-support case built only from public data. The marina, seller and buyer are hypothetical; no client file or engagement data is used. The case follows the house format with the changes an acquisition requires: at a glance, determination, the eligibility and Appendix 15 test table, the transaction and its diligence, the historical cash flow and the lender's DSCR, the post-close projection, sources and uses, the price the structure supports, sensitivities, the conventional fallback, collateral and conditions. Figures are as of October 9, 2026. Part of the marina feasibility study cluster; format detail on the marina acquisition feasibility study and coastal marina feasibility study pages, program detail on the SBA 7(a) feasibility study and SBA 504 feasibility study pages and the SBA underwriting and regulatory spine, and the state frame on the Maryland feasibility study page.

The acquisition is not feasible as proposed. Under Appendix 15 the test is historical: EBITDA for the last fiscal year or the two-year average, after documented add-backs and a replacement wage for the departing owner, divided by the post-transaction debt service, at a 1.25x floor, with projections barred. The marina's returns show $1,760,000 and $1,830,000 of revenue and $385,000 and $405,000 of seller's discretionary earnings for FY2024 and FY2025; after an $85,000 replacement manager wage, EBITDA is $300,000 and $320,000 and the two-year average is $310,000. The proposed $4,305,226 loan at the 10.00 percent cap on the ten-year amortization costs $682,727 a year, so historical coverage is 0.45x on the average and 0.47x on the last year. The seller's pro forma, $110 per foot at 95 percent and fuel up 20 percent, lifts revenue 16.8 percent to $2,137,160 and EBITDA to $553,245, and still covers only 0.81x; projections cannot cure an Appendix 15 shortfall in any case. The injection is proposed as a $350,000 seller note on standby and $128,358 of cash, and a standby note may fund no more than half of the 10 percent. And ahead of the arithmetic sits the eligibility rule: a marina is eligible only if more than 50 percent of its prior-year revenue comes from transients staying 30 days or less, and this marina's transient dockage is 1.6 percent of revenue, or 6.9 percent if the fuel sold to visiting boats counts.

The acquisition is feasible as restructured, subject to the conditions at the end of this page, and the restructure is a price. At 1.25x on the $310,000 two-year average, post-transaction debt service may not exceed $248,000. The structure that gets the most debt out of that figure puts the real estate on a 25-year SBA 504 debenture and bank loan and the business on a 10-year 7(a): the appraiser's allocation of 75 percent of price to land, riparian rights, bulkhead, piers, docks and buildings ($1,642,500) plus $250,000 of dock and fuel system repairs funds a $1,916,640 504 project at 15 percent contribution, and the business assets, closing, diligence and $60,000 of working capital fund a $752,743 7(a) project at 10 percent. Solving the price for 1.25x gives $2,190,000, $12,167 per slip, 7.1 times EBITDA; total project cost is $2,669,383, debt is $2,306,613 and debt service is $247,296, of which $83,122 is the bank loan, $56,741 the debenture and $107,434 the 7(a). Historical coverage is 1.25x on the average and 1.29x on FY2025; the post-close projection, which carries FY2025 revenue forward with the replacement wage and a 3 percent dock reserve, covers 1.24x in year 1, 1.32x in year 3 and 1.62x in year 10. A buyer who wants a cushion pays less: at $2,000,000 historical coverage is 1.35x, at $1,900,000 it is 1.40x.

The price is the finding, and it says two things the seller will not like and the lender should. First, the ask is 2.05 times the price the SBA structure supports and 1.37 times the price a conventional 25-year structure supports, $3,288,807 at 75 percent of cost and 1.25x; even conventional money covers only 0.94x at the ask. The marina may well be worth $4,500,000 to a cash buyer or a developer who prices the land and the redevelopment option; Chesapeake closed prices run from $10,400 per slip at a foreclosure to above $119,000 at a yacht club's purchase of a downtown fuel dock, and an aggregator's median is about $48,000 per slip. A lender prices the cash flow, and the cash flow carries $2.2 million of SBA debt or $2.8 million of conventional debt. Second, the eligibility is not the lender's to decide. The rule is silent on which lines count as transient, the marina passes only on the reading that every line other than annual dockage and winter storage is transient revenue, which treats a haul-out or a fuel sale to an annual tenant as a transient stay, and that reading is not one the lender can defend without SBA's written answer. The SBA structure is therefore conditional on the ruling, and the conventional structure, which needs no ruling and carries more price, is the route the study puts first if the ruling does not come.

The subject is a 19-year-old owner-operated marina on the South River: 180 fixed-pier wet slips averaging 36 feet, a fuel dock with two underground tanks and a UL 971-listed dispenser run from the bulkhead, a travel lift and a service shop, winter land storage for about 120 boats on stands, and a ship store, on an upland parcel the seller owns with the riparian rights. The price allocates under IRS Form 8594 and under the appraiser's going-concern split: land, riparian rights, bulkhead, piers, docks and buildings to the real estate at 75 percent, and the lift, forklift, yard equipment, inventory, the tidal wetlands license interest and goodwill to the business. Used marina equipment brings a fraction of its cost at auction, so the 7(a) lender's collateral is the junior lien on the real estate, the guaranties and the cash flow, which is the position every marina acquisition takes.

Maryland's transfer path is the one Appendix 15 does not write but the closing depends on. The buyer, as the new riparian landowner, files a written request with supporting documentation for transfer of the Board of Public Works tidal wetlands license under COMAR 23.02.04.17; the license does not transfer a property interest of the State, may be transferred only with approval, and binds the transferee to its terms, and the 2024 fiscal note on HB 752 confirms that wetland authorizations do not convey title. The fuel system is checked against the Maryland Department of the Environment's register: both tanks registered, the latest certified inspection by a Maryland Certified UST System Inspector, leak detection and tightness records, Class A and B operator certificates, and the marina piping standard under COMAR 26.10.03 for the run from the bulkhead to the dispenser; Annapolis's own maritime task force put the City Dock fuel tank repairs at $1 million to $1.5 million in 2020, which is the scale a failed register costs. A marine engineer surveys the piers, docks and bulkhead and writes the capital schedule; Harborview Marina in Baltimore, 278 slips, was closed by its engineer on pier safety grounds in March 2025 and sold at foreclosure for $2,900,000, which is why $250,000 of repairs are funded at closing rather than promised. The buyer's accountant reconciles the dockage ledger to the slip-by-slip rent roll, the bank deposits and the sales and use tax returns for the trailing twelve months and each of the last two fiscal years, ties the fuel line to the supplier invoices and the meter reads, and checks that the earnings do not include the seller's slip deposits collected in winter for the coming season. A zoning certificate confirms MA2 rights for the fuel dock and the store, and the Critical Area and flood zone determinations are run on the parcel. Each of these is a condition.

The FY2025 revenue by line, which is the basis of the restructured projection and of the transient readings: annual and seasonal dockage $554,040 (180 slips at 36 feet, $95 per foot per year, 90 percent occupancy); transient dockage $29,000; winter land storage $155,520 (120 boats at $6 per foot per month for six months, the Navy's Annapolis stand-storage rate); haul, launch and wash $97,000 (about 150 boats each way at $9 per foot, the Navy's Carr Creek rate); service labor and parts $220,000; fuel $650,000; ship store $90,000; electric, pumpout and fees $35,000. The $95 effective dockage rate is above the public Chesapeake band, $72 at Havre de Grace for 2026 and about $85 at the Navy's Annapolis marina, and the sensitivity table carries $85; the add-backs the lender accepts are the categories SOP 50 10 8.1 names, documented and tied to the transcripts, and the winter deposits for the coming season are a liability, not income.

The projection is not the Appendix 15 test, which is historical; it is the lender's view of the business under new ownership and the basis for the sensitivities. It carries FY2025 revenue flat in year 1 with 3 percent growth after (Havre de Grace raised its annual rate from $68 to $72 per foot over 2024 to 2026), fuel at a 22 percent margin, payroll of $430,000 including the replacement manager, insurance of $95,000 pending a broker indication, property tax of $32,000 on the current assessment at the county and state rate of $1.080 per $100, a 3 percent dock and fuel system reserve the seller did not fund, and 3 percent cost escalation.

The projected year-1 revenue of $1,830,560 reconciles to FY2025's $1,830,000, and year-1 EBITDA of $307,828 sits $12,172 below FY2025's $320,000 because the projection funds the 3 percent dock reserve the seller did not; that is the check that the projection carries the business as it is rather than as the buyer hopes. Debt service falls by $107,434 after year 10 when the 7(a) is paid off and only the real estate money remains, which is the point of putting the business on the short term and the real estate on the long one.

Stated the way Appendix 15 reads it: at the 1.25x floor on $310,000 of average historical EBITDA, debt service may not exceed $248,000, and $248,000 buys $2,306,613 of debt on the restructured mix of 25-year real estate money and 10-year business money, which with $362,770 of equity funds $2,669,383 of project, of which $2,190,000 is price. On the post-close statement with every stream scaled and the fixed lines held, the restructured marina covers debt service at $1,710,020 of revenue (6.6 percent below FY2025), 1.15x at $1,766,421 (3.5 percent below) and 1.25x at $1,804,022 (1.4 percent below). The cushion is thin by construction, because the price was solved to the floor; a buyer who wants the cushion the sensitivity table shows pays $2,000,000 (1.35x historical) or $1,900,000 (1.40x). As proposed, break-even is $2,282,219, 1.15x needs $2,437,304 and 1.25x needs $2,540,694, 6.8 to 18.9 percent above the seller's own pro forma and 24.7 to 38.8 percent above FY2025.

All rows start from the restructured base unless labeled otherwise.

Dockage and the fixed lines decide the case. The restructured marina absorbs a 25 percent fuel miss, a five-point fuel margin move, a 10 percent payroll move and a 10 percent cost overrun at or near the 1.15x floor in year 3, and it does not absorb a rent roll at $85 per foot (1.08x), an occupancy of 80 percent (1.07x) or a 15 percent move in the fixed lines (0.79x), because a marina's cost base is mostly fixed and its margin at this size is 17 percent. The $85 row is the diligence item: if the rent roll shows the seller's $95 includes tenants on month-to-month terms or discounts that will not renew, the price falls again. The structure rows all help: the 20 percent 504 tier, which a CDC may require, costs little; the 85 percent real estate allocation, if the appraiser treats the fixed piers as real property, moves $219,000 from the 10-year term to the 25-year term and lifts year-3 coverage to 1.41x. The last three rows are the seller's case, and none of them covers: at 20 percent equity and the seller's own numbers the ask reaches 0.97x in year 3.

A conventional lender on this file lends against the real estate on a 25-year amortization without the transient rule, the Appendix 15 floor on a 10-year business term or the standby limits, and underwrites a 1.25x covenant on historical cash flow at 75 percent of cost. At the $2,190,000 price the loan is $2,002,037, debt service is $177,539 at 7.50 percent and historical coverage is 1.75x, against $667,346 of equity. At 1.25x the same structure supports a price up to $3,288,807, $18,271 per slip, 10.6 times EBITDA, with a $2,796,605 loan, $248,000 of debt service and $932,202 of equity; at the $4,500,000 ask it covers 0.94x. The conventional route carries $1,098,807 more price than the SBA route and needs $569,432 more equity, and it needs no ruling from SBA. The study puts it first if the ruling does not come, and the workbook's Conventional sheet carries it beside the SBA case so the buyer can see what each dollar of equity buys.

Closed Chesapeake prices cannot set a lending value: $2,900,000 for 278 slips at Harborview's foreclosure ($10,400 per slip, a closed pier, a lone bid by the mortgage holder), $4,600,000 for Casa Rio's 35 wet slips and 200 land spaces (boatyard-weighted), $1,100,000 for Misty Morning in Edgewater, $10,750,000 approved by Annapolis Yacht Club's members in September 2026 for Annapolis City Marina's roughly 90 slips, fuel dock and parking (about $119,000 per slip, closing unconfirmed), and $16,000,000 reported by an aggregator for the 375-space Kent Narrows Boatel (unconfirmed by the buyers). The Marina Deal Flow aggregator reports a median of about $48,000 per slip with the middle half at $35,000 to $125,000, and its own counts have moved between readings. The only disclosed income figure, Mears Point's roughly $1 million of in-place net operating income on 540 slips in 2020, about $1,850 per slip including leased restaurants, says a 180-slip marina in that band would show about $330,000 of NOI, which is where this subject sits. No public source discloses a capitalization rate for a Maryland marina. On the income approach the SBA price is a 14.2 percent capitalization of $310,000, the conventional maximum 9.4 percent and the ask 6.9 percent before any reserve; the going-concern appraisal will land between the first and the last, which is why the Appendix 15 debt cap does not bind and why the seller may find a buyer this study cannot finance.

Collateral as restructured: the bank's first lien of $958,320 is 50.6 percent of the $1,892,500 of real estate and repairs, and the debenture's second lien takes the combined position to 86.1 percent; the 7(a) holds a third lien on the real estate, a first on the lift, forklift, yard equipment and inventory, worth perhaps $150,000 to $200,000 at orderly liquidation, and an assignment of the tidal wetlands license interest, on which counsel's opinion is a condition because the license conveys no State property interest. The 7(a) is carried by the guaranties and the cash flow. The credit record for the category is the one the restaurant acquisition case cites: change-of-ownership 7(a) loans in the FY2018 to FY2019 cohorts charged off at 6.88 percent against 9.83 percent for all other 7(a) loans; marina-specific charge-off counts from the FOIA series are in preparation and this page does not report them. The physical record is the other collateral fact: Annapolis logged 18 high-tide flood days in the year to April 2020 against two a year in 1995 to 2005, NOAA projects 75 to 115 a year for the 2050 decade, and the insurance line carries named-storm wind and flood on the upland buildings while the piers, which NFIP excludes, are carried on the reserve and the engineer's schedule.

Prepared by Michal Mohelsky, J.D., FMVA, Practicing Affiliate of the Appraisal Institute. Model case aligned with SBA SOP 50 10 8.1 Appendix 15, under USPAP discipline. MMCG Invest, LLC, 27 Maiden Lane, Suite 625, San Francisco, CA 94108.