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Can You Get Marina Financing With An SBA 7(a) Loan?
SBA 7(a) loans can offer marina owners a lifeline by providing working capital financing, refinancing existing debt, or funding the acquisition of a property.
If you’re interested in purchasing or expanding a marina or boatyard, or refinancing debt on a marina or boatyard that you already own, an SBA 7(a) loan could be a fantastic option.
Marina Financing and the SBA 7(a) Loan Program
Whether you’re interested in building a new marina, or buying and expanding an existing one, the SBA 7(a) and SBA 504 loan programs both allow borrowers to purchase commercial real estate.
However, only SBA 7(a) loans allow borrowers to use loan proceeds for working capital. Plus, SBA 7(a) loans are guaranteed up to 75% by the Small Business Administration (SBA) and permit a maximum loan amount of up to $5 million.
SBA 7(a) loans can be used in a variety of ways, including those listed below.
Building a New Marina
SBA 7(a) loans can fund all aspects of new marina construction, including expenses such as sprinkler systems, alarms, and other security systems.
Purchasing an Existing Marina
SBA 7(a) loans can be also used for purchasing an existing marina, and can also be used to fund renovations, expansions, and improvements to it. And, with the SBA’s new business acquisition policy, borrowers interested in purchasing a marina can get up to 90% financing from the SBA by combining 5% cash down with a 5% seller note.
Keep in mind, however, that marina lenders who are approved by the SBA to issue 7(a) loans might not be quite as generous, so the exact amount of financing a borrower may receives may vary.
Marina Refinancing
If you want to refinance certain kinds of business debt on a marina that you currently own, you may also be able to do so with an SBA 7(a) loan.
To be eligible for refinancing, the debt must have been used for purchases that would have been eligible for SBA financing in the first place — for example, working capital and commercial real estate, not personal expenses.
Case Study: Building a Marina in Virginia
Norbert, a passionate boating enthusiast, had always dreamt of owning his own marina. After years of hard work and research, he identified an excellent waterfront location in Newport News, Virginia, to establish "Harbor Haven Marina." The property offered the perfect opportunity for a thriving marina business, catering to both local boat owners and visitors.
To bring his dream to fruition, Norbert needed funding to purchase the property and construct the marina, including docks, a fueling station, and storage facilities. He estimated that the total cost for this project would be around $2 million. Norbert had saved up $400,000 to contribute towards the project, but he still needed an additional $1.6 million to complete it.
Norbert decided that an SBA 7(a) loan would be the best financing option for his marina project, given the favorable terms and the loan's flexibility in accommodating his needs. He submitted a detailed business plan to the lender, outlining the construction plans, anticipated demand, and potential revenue streams for Harbor Haven Marina.
The lender was impressed with Norbert's well-thought-out plan, which demonstrated a clear understanding of the marina business and the local market. They also recognized the potential for Harbor Haven Marina to become a successful and valuable addition to the Newport News waterfront community.
Norbert's SBA 7(a) loan application was approved, granting him the $1.6 million he needed to bring Harbor Haven Marina to life. With the funding secured and his personal contribution, he was able to purchase the property and begin construction on the marina facilities.
Upon completion, Harbor Haven Marina quickly attracted both local and visiting boat owners, offering top-notch amenities and services. Norbert's dream of owning a successful marina had become a reality, thanks in part to the support of the SBA 7(a) loan program.
This is a fictional case study provided for illustrative purposes.
Related Questions
What are the requirements for obtaining an SBA 7(a) loan for marina financing?
The SBA 7(a) loan program is a great option for marina financing. To be eligible for an SBA 7(a) loan, borrowers must meet the following requirements:
- A credit score of at least 680
- A minimum of two years in business
- A debt-to-income ratio of no more than 50%
- A minimum of 10% equity in the business
- A minimum of $100,000 in annual revenue
For more information on SBA 7(a) loans, please visit this page.
What types of marina projects are eligible for SBA 7(a) financing?
SBA 7(a) loans can be used for a variety of marina projects, including building a new marina, purchasing an existing marina, and refinancing certain kinds of business debt on a marina that you currently own. SBA 7(a) loans can fund all aspects of new marina construction, including expenses such as sprinkler systems, alarms, and other security systems. They can also be used to fund renovations, expansions, and improvements to an existing marina. With the SBA’s new business acquisition policy, borrowers interested in purchasing a marina can get up to 90% financing from the SBA by combining 5% cash down with a 5% seller note. Keep in mind, however, that marina lenders who are approved by the SBA to issue 7(a) loans might not be quite as generous, so the exact amount of financing a borrower may receives may vary. To be eligible for refinancing, the debt must have been used for purchases that would have been eligible for SBA financing in the first place (i.e. working capital and commercial real estate, not personal expenses).
For more information on SBA 7(a) loans, please visit https://sba7a.loans.
What are the advantages of using an SBA 7(a) loan for marina financing?
The SBA 7(a) loan program offers several advantages for marina financing. These include:
- The ability to purchase property, buy equipment, and get working capital for your business.
- The ability to build a new marina, purchase an existing marina, and fund renovations, expansions, and improvements.
- The ability to refinance certain kinds of business debt on a marina that you currently own.
- SBA 7(a) loans are guaranteed up to 75% by the Small Business Administration (SBA) and permit a maximum loan amount of up to $5 million.
- The SBA's new business acquisition policy allows borrowers to get up to 90% financing from the SBA by combining 5% cash down with a 5% seller note.
What are the disadvantages of using an SBA 7(a) loan for marina financing?
The main disadvantage of using an SBA 7(a) loan for marina financing is that it has stricter requirements than other kinds of financing, including increased credit score requirements. Additionally, SBA 7(a) loans have a maximum loan amount of up to $5 million, so if you need more than that, you may need to look into other financing options. Finally, marina lenders who are approved by the SBA to issue 7(a) loans might not be quite as generous, so the exact amount of financing a borrower may receives may vary.
Source: www.commercialrealestate.loans/marina-loans and www.sba7a.loans/sba-7a-loans-small-business-blog/marina-loans
What are the steps involved in applying for an SBA 7(a) loan for marina financing?
The steps involved in applying for an SBA 7(a) loan for marina financing include:
- Gather the necessary documents, such as business and personal tax returns, financial statements, and a business plan.
- Find an SBA-approved lender who is willing to finance your marina.
- Submit your loan application and supporting documents to the lender.
- Wait for the lender to review your application and make a decision.
- If approved, sign the loan documents and receive the funds.
For more information, please visit https://sba7a.loans/sba-7a-loans-small-business-blog/marina-loans.