SBA RV Park Feasibility Study

Most feasibility studies begin with demand. An SBA RV park study begins with a sentence in SOP 50 10 8, because the sentence decides whether there is a loan at all. Hotels, motels, recreational vehicle parks, marinas, campgrounds and similar businesses are eligible if more than 50 percent of the business's revenue for the prior year is derived from transients who stay for 30 days or less at a time and the business complies with zoning and other legal requirements. If the applicant is a start-up, its projections must show that more than 50 percent of revenue will come from such transients. Apartment buildings and mobile home parks are not eligible, and an ineligible business cannot obtain an SBA loan for any purpose, including the purchase or construction of a building for its own use.

The test has four features that shape the study. It measures revenue, not sites, so a park with 80 transient sites and 40 annual sites can still fail if the annual sites earn more than the transient ones. It measures stays of 30 days or less at a time, so a seasonal contract of three months, a six-in-six-out plan and an annual lease are all non-transient however the guest is registered. It is a prior-year test for an existing park and a projection test for a new one, so the ledger for an acquisition and the revenue model for a ground-up project are eligibility exhibits, not only credit exhibits. And the threshold is more than 50 percent, so a park at exactly half fails.

MMCG's SBA RV park feasibility study builds the stay-length revenue model first. For an existing park it splits the trailing twelve months of site-night revenue at 30 days from the reservation system or the general ledger and states the transient share. For a new park it builds the revenue model by site type and by month, carries transient, weekly, monthly and seasonal stays on separate lines, and states the projected share with the assumptions behind it. The parent RV park feasibility study page describes the full methodology; this page covers what the SBA programs add to it.

A common error in SBA RV park applications is to equate a state's definition of a transient guest with SBA's. They are not the same. Florida treats a registered guest as transient for six months under Chapter 513 before its Residential Landlord Tenant Act applies. Arizona's Recreational Vehicle Long-Term Rental Space Act attaches to a space rented by the same tenant for more than 180 consecutive days. California's RV Park Occupancy Law makes a guest a resident at nine months. A snowbird park in Mesa or Mission can hold every guest inside the state's transient window and still earn 80 percent of its revenue from stays longer than 30 days, which is an SBA fail.

Local codes can run the other way and make a park eligible by design. Monroe County, Florida limits RV space terms in its RV district to less than 28 days; Pigeon Forge, Tennessee defines a travel trailer park as a planned unit development whose occupants may not remain more than 30 days; Ferris, Texas permits rental only by the day, week or month. A park subject to a cap of that kind is transient by law, and MMCG states the cap in the regulatory screen because it supports both the eligibility finding and the covenant the lender may want in the loan documents.

The study carries revenue in four stay-length buckets, 30 days or less, 31 to 180 days, 181 to 270 days and more than 270 days, so that the SBA share, the state tenancy exposure and the eviction timeline the lender faces in a default are read from one ledger.

SOP 50 10 8.1 applies to loans receiving an SBA loan number on or after October 1, 2026, and it changes how a change of ownership is underwritten. Debt service coverage on an initial acquisition is tested at 1.25x on historical results, the last fiscal year or a two-year average, and projections cannot satisfy the coverage test except where the loan is secured by special use property and the historical information cannot be obtained. The equity injection is a minimum of 10 percent of total project cost on every change of ownership. Every change of ownership requires an independent business valuation by a qualified source, and a quality of earnings report is required where the business purchase price, excluding real estate, is $3 million or more. Seller notes that are not on full standby count in debt service, and the business portion of an acquisition loan is amortized over no more than 10 years.

Two of those rules land hard on RV park purchases. The historical coverage test means a park with a stale rate card, like the Deming, New Mexico park in MMCG's case study set, where the average daily rate sits near $12 against a competitor's published $37, cannot be financed on the buyer's plan to raise rates; it is financed on last year's numbers, and the buyer's equity and a seasoned ramp carry the gap. The 10-year business amortization is relieved where the real estate dominates: SOP 50 10 8.1 allows the full loan to carry a 25-year amortization where special use real estate is 85 percent or more of the value of the business and real estate being acquired. Land, pads, utilities and buildings carry most of the price of most RV parks, so many purchases can meet that threshold, and the study states the allocation between real estate and business value so the lender can apply the rule.

The quality of earnings report, where it applies, is reconciled in the study. MMCG does not prepare the QoE, which the lender orders, but the feasibility study's revenue model is built from the same site-night data, and the two should agree on the transient share, the seasonality and the trailing twelve months.

SBA 504 finances the real estate and long-lived equipment of an owner-operated park through a conventional first lien at 50 percent, a CDC debenture at 40 percent and a borrower contribution of 10 percent. The contribution rises to 15 percent where the business is new, meaning in operation for two years or less, or where the CDC classifies the property as a limited or special purpose property, and to 20 percent where both apply. Whether an RV park is special purpose is the CDC's classification; the lists in prior SOPs name hotels and other lodging facilities, marinas, golf courses and car washes, and a CDC may treat an RV resort as lodging. MMCG's study states the classification the CDC has applied and models the contribution accordingly.

The 504 job standard is one job opportunity created or retained per $95,000 of debenture, set by SBA's notice of September 2025 for loans approved on or after October 1, 2025, with a higher figure for small manufacturers and energy projects. An RV park seldom meets it on headcount; a $2 million debenture implies about 21 jobs, and a 120-site park runs on a handful. Most 504 RV park loans therefore qualify under a public policy goal, most often aiding rural development, which is available where the CDC's overall portfolio meets its required job opportunity average. The study states the jobs the project creates and the public policy goal under which the project qualifies, so the CDC's credit memo can adopt both.

For a ground-up resort the 504 question is also one of leverage against cost. At $5.9 million for a 16-acre Pigeon Forge parcel and a build cost in the $47,000 to $130,000 per site range, the 50/35/15 structure on a new business asks the sponsor for 15 percent of a project that may reach $12 million to $15 million, and the stabilized year has to clear 1.25x at the first lien's rate and the debenture's. MMCG's study runs that arithmetic, and when it does not clear at the proposed site count, the determination says feasible as resized and shows the count that does.

A 7(a) loan of more than $350,000 carries a maximum rate of the base rate plus 3.0 percent, which at the prime rates of 2026 puts the ceiling near 9.75 percent; lender marketing that quotes 10 to 11.5 percent for campground loans exceeds the cap and should not be used in a pro forma. The 504 debenture is fixed at the monthly sale rate, which has run near 6 percent for 25-year debentures in 2026. The study carries the rate the lender has quoted, states the cap, and runs a sensitivity at 100 basis points above it.

The guaranty does not change the coverage test. A 7(a) loan is guaranteed at 75 percent above $150,000, the lender holds the unguaranteed portion and underwrites to its own policy, and the historical 1.25x test under 8.1 applies to the whole loan. The study is written to the lender's credit policy where it is stricter than the SOP.

The SBA scope adds the following to the standard MMCG RV park feasibility study.

A stay-length revenue model that states the share of revenue from stays of 30 days or less for the prior year or by projection, with the reservation-system or ledger basis stated, and a finding on eligibility under SOP 50 10 8.

A regulatory screen that states the state tenancy threshold and any local stay cap, and reconciles them to the SBA test.

For a change of ownership, a historical coverage calculation at 1.25x on the trailing year and on a two-year average, the allocation between real estate and business value for the 85 percent special use amortization rule, the equity injection, the treatment of any seller note, and a reconciliation of the revenue model to the quality of earnings report where one is required.

For a 504 loan, the contribution under the CDC's classification of the property, the job opportunities the project creates, and the public policy goal under which it qualifies.

A rate sensitivity at the program cap and 100 basis points above the quoted rate, and a determination written so that the lender's credit memo can adopt it.

An SBA lender's first question to a feasibility consultant should be whether the consultant has read the park's reservation data at the 30-day line, because the eligibility finding rests on it and a study that asserts transient status without the ledger behind it is a liability in the file. MMCG's engagements begin with a scoping call, a fixed-fee proposal within one business day, and delivery in 9 to 16 business days, with rush delivery from 5 business days. Payment is 50 percent at engagement and 50 percent on delivery, and the fee is not contingent on the determination or on loan approval. Engagements are led by Michal Mohelsky, J.D., FMVA, Practicing Affiliate of the Appraisal Institute. Parks that fail the transient test are not abandoned; MMCG writes them to the conventional, seller-carry or USDA path that fits, and the USDA RV park and campground feasibility study page covers the rural program. The firm's SBA feasibility study page covers 7(a) and 504 across asset classes.