SBA Loans for Marinas: Financing an Existing Marina Purchase
Buying an existing marina can involve paying for upland real estate, waterfront structures, storage and handling equipment, ship store inventory and the goodwill of an established operation, while also keeping enough cash on hand for slower months. SBA loans for marinas may be one option for qualified buyers, depending on how the business is structured, how the loan proceeds will be used and the lender’s review. Understanding how the programs work can help buyers prepare a stronger request.
This article is general information about SBA-backed financing for the purchase of existing, operating marinas. It does not address developing a new marina or adding slips. SBA program rules change from time to time, and eligibility depends on business structure, use of proceeds, program rules and lender review. Every loan is subject to lender approval. Nothing here is a commitment to lend or legal or tax advice.
SBA 7(a) Loans
The SBA 7(a) program is the SBA’s primary general-purpose loan program. For a marina acquisition, SBA 7(a) financing may be used, where eligible, to purchase the business and its assets, including real estate in some transactions, and to provide working capital. Our page on SBA 7(a) business real estate loans explains how the program may apply when property is involved.
SBA 504 Loans
The SBA 504 program is designed for fixed assets such as owner-occupied commercial real estate and certain long-lived equipment. It may be considered when real estate is a significant part of a marina transaction, subject to program requirements. See our page on SBA 504 business real estate loans.
Active Business Versus Passive Real Estate
SBA programs are intended for operating businesses, not passive real estate investments. A marina that actively provides services, such as managing slips, operating a fuel dock, running a service yard and serving boaters directly, may present differently from a property where the owner simply collects rent from tenants who run their own businesses. How a particular marina is structured and operated, including leases to restaurants or other tenants, can affect eligibility. Buyers should expect lenders to examine this question closely.
Waterfront Rights and Collateral
Where a marina operates on leased submerged land, lenders may review the remaining term, renewal provisions and consent to assignment as part of their analysis. Our article on submerged land leases explains these issues.
What Lenders Typically Evaluate
- The marina’s documented cash flow and its ability to support debt service
- The buyer’s experience in marina operations, boating or related businesses
- The buyer’s equity injection and personal financial condition
- Credit history of the buyer and any guarantors
- Property condition, environmental review and insurance
- Permits and waterfront rights needed to keep operating
Our article on marina loan requirements covers documentation in more detail.
Seller Financing in an SBA Transaction
Some SBA transactions include a seller note, and program rules may govern how such a note can be structured and whether it can count toward the buyer’s equity. See our article on marina seller financing.
Estimating Payments
Buyers can explore how a proposed loan amount might translate into payments with our SBA loan calculator. Results are estimates only, and actual terms depend on the lender, the program and the transaction.
When SBA Financing May Not Fit
Some transactions may not fit SBA program rules because of size, structure, use of proceeds or the passive nature of certain income. In those cases, conventional financing or other structures may be considered, depending on lender review.
US Professional Funding helps buyers evaluate financing options for the acquisition of existing, operating marinas, including SBA-backed loans where they may fit. Learn more about our marina acquisition financing.
