USDA Loans Available for Private RV Park Owners
A little known loan program offered by the U.S. Department of Agriculture may provide funding for qualified park operators or other RV businesses located in rural areas who haven’t been able to secure financing for improvements and expansions during the recession.
The USDA’s Rural Business Guaranteed Loan Program typically provides up to $10 million in funding for rural businesses that need loans for a variety of reasons, including refinancing, repairs, modernizations, development and expansions. A fact sheet detailing the USDA loan program for the Business & Industry Guaranteed Loan program can be obtained at http://www.rurdev.usda.gov/rbs/busp/b&I_gar.htm.
“Local federally insured and regulated financial institutions are still making these loans,” Bill Garpow, executive director of the Recreational Park Trailer Industry Association (RPTIA), told park operators attending Education Day Jan. 13 at Newport Dunes Waterfront RV Resort and Marina. The event was sponsored by the California Association of RV Parks and Campgrounds (CalARVC).
“This program is good for a campground or any other rural business that is financially sound, can meet the program’s collateral requirements and has a justifiable need for the loan to make some good things happen in rural America. You can also use this kind of funding to purchase recreational park trailers for placement into a rental program. Another use might be to refinance the whole park and reduce your monthly cost of operations as a way to bring a profit back to your balance sheet. USDA is particularly interested in projects that could provide additional jobs and would conserve water or power.”
Garpow said he learned about the USDA loan program during a seminar at the National RV Trade Show at Louisville in December. And while the loan application process is more cumbersome than usual, since it involves both a bank and the USDA, he said the program is worth considering given the unwillingness of most banks to lend money right now.
“If you qualify for this type of loan, the government will guarantee up to 80% of the loan,” Garpow said, which essentially covers the bank’s risk in making the loan and may result in a better loan interest rate.
The USDA defines “rural” as an area with a population of 50,000 or less. Garpow said park operators can find out if they qualify for the rural area requirement of this program by visiting the USDA’s eligibility website and entering the address and zip-code of their business. http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do.