Buying an RV Park and Adding Sites: Feasibility Studies for Expansion Acquisitions

The structure, and what changed

An acquisition combined with on-site expansion is two transactions wearing one loan number. For eligibility and coverage it is a change of ownership. For disbursement it is a construction loan. Both characterisations apply at once, and they pull in different directions.

Under SOP 50 10 8, in force until the end of September 2026, this was manageable. Standard 7(a) loans above $350,000 had to show debt service coverage of at least 1.15 to 1, tested on a historical or projected basis or both. A buyer could show that the existing park plus the new sites would cover the debt once built, and the projection did real work in the file.

Under SOP 50 10 8.1, which applies to applications receiving an SBA loan number on or after 1 October 2026, that route closes for most buyers of this asset. The new appendix 15 sorts every change of ownership into four categories, and it governs where other parts of the rulebook conflict with it. Initial acquisitions, owner buyouts and employee ownership transactions must clear 1.25 to 1, measured on the last fiscal year end or an average of the last two, on a historical or adjusted basis. Post closing projections may not be used to meet that test. Business expansions remain at 1.15 to 1.

Which category applies is therefore worth more than any other single question on the file, and the preconditions for the expansion category are narrow. It requires the buyer to already operate an existing business in the same industry group under current ownership for two full fiscal years, with both businesses as co-borrowers under identical ownership. A first time buyer purchasing a park and building additional sites at it does not meet that. The transaction is an initial acquisition, the floor is 1.25, and the revenue from sites that do not yet exist cannot be used to reach it.

The consequence is blunt. The acquisition has to stand on the seller's trailing history alone, with the full new debt service loaded on, before the expansion generates a dollar. The expansion is financed as project cost. It cannot rescue a coverage shortfall on the purchase.

One thing worth stating because it is genuinely absent: the rulebook provides no formula for blending historical cash flow from the existing sites with projected cash flow from the new ones. There is no provision saying to count history on what exists and projections on what does not and add them together. Under the current edition the coverage test simply does not admit the projected half. A study that presents a single combined stabilised year, without separating the two, has produced a number the lender cannot use.

Eligibility comes first, and it can end the deal

Before any of the coverage arithmetic matters, this asset class has an eligibility test that turns on the composition of revenue, and it is the fastest way to lose a deal that otherwise works.

The starting point is the bar on passive businesses. The SOP states plainly that apartment buildings and mobile home parks are not eligible. Then it sets out the exception that admits this asset class:

"Hotels, motels, recreational vehicle parks, marinas, campgrounds, or similar types of businesses are eligible if more than 50% 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 all zoning and other legal requirements. If the Applicant is a Start-Up Business, the Applicant's projections must show that more than 50% of the business's revenue will be derived from transients who stay for 30 days or less at a time."

Four things follow, and the third is the one that catches expansion deals.

The test is on revenue, not on site count. A park can have a large minority of its pads occupied by monthly or seasonal guests and remain eligible, provided more than half of prior year revenue comes from stays of 30 days or less. Site count is not the measure.

The threshold is a hard majority with no margin built in. Because more than 50 per cent must be transient, the ceiling on monthly, seasonal and annual revenue is just under half, and a park sitting at 52 or 53 per cent transient has very little room.

The test has to be re-run on the pro forma, not just on the seller's last return. This is where expansion deals fail. Annual and seasonal sites are the easiest to fill, they are what a broker will suggest to stabilise the new phase quickly, and they are exactly what pushes the revenue mix across the line. A park that is eligible today can build itself out of eligibility, and the study should show the transient share of revenue in every projected year rather than only in the historical column.

The distinction is structural, not arbitrary. It is the same line the industry classification system draws: an operator leasing residential mobile home sites is classified out of the recreational vehicle park code altogether and into general real estate lessors. Transient lodging is an operating business. Long term residential land rental is passive real estate, and passive real estate is not financeable here.

Special purpose, and the equity that turns on it

Recreational vehicle parks and campgrounds do not appear on the SOP's list of special purpose property examples. Hotels, motels and marinas do. That is a genuine absence on the face of the list.

It is also not the end of the question, because the list is expressly not intended to be all inclusive, and the definition turns on physical characteristics rather than membership of a list: a limited market property with a unique physical design, special construction materials, or a layout that restricts its utility to the specific use for which it was built. A park with purpose built pads, hookups and site infrastructure has limited alternative use, which is why these assets are commonly appraised as going concerns with value allocated across real property, equipment and intangible business value.

The classification matters most on the 504 side, where a special purpose designation raises the borrower's minimum injection from 10 per cent to 15 per cent, and where a buyer who is effectively a start up faces 20 per cent. On an acquisition plus construction deal, where equity is already the binding constraint, a classification made late is an expensive surprise. It belongs in the credit memorandum early, and the appraisal scope should address it directly rather than leave it implied.

The physical cap is not the market

Every expansion projection in this sector rests on an assumption about how many sites can be added, and in most cases the market has nothing to do with the answer. The cap is a permit.

The usual binding constraint is onsite wastewater. State health or environmental agencies permit the septic or treatment system, and the permitted flow caps the number of sites regardless of demand, land area or the site plan's ambitions. This is the first thing to confirm in writing and it is routinely confirmed last.

Water supply carries its own threshold with real consequences. Under the federal drinking water rules, a system becomes a public water system at 15 service connections, or when it serves an average of at least 25 people a day for at least 60 days a year. A campground serving transient guests typically falls into the transient non-community category, which carries a lighter but genuine monitoring and reporting burden. An expansion that crosses either threshold has changed the park's regulatory status, and the cost of that belongs in the project budget.

Electrical capacity is more calculable than most people expect, because the code specifies it. Every site with an electrical supply requires at least one 20 ampere, 125 volt receptacle with ground fault protection. A minimum of 20 per cent of sites must have a 50 ampere, 125/250 volt receptacle, and a minimum of 70 per cent must have a 30 ampere, 125 volt receptacle. Service is sized at not less than 12,000 volt amperes per 50 ampere site, raised from 9,600 in the earlier code cycle, 3,600 volt amperes for a site with both 20 and 30 ampere supply, 2,400 for a 20 ampere only site, and 600 for a dedicated tent site. Demand factors then derate the total as site count rises, from 100 per cent for a single site down to 41 per cent at 36 sites or more. The code also notes that seasonal parks may need the 50 ampere share to approach 100 per cent, which raises the calculated load and the cost of the upgrade with it.

That is a real number, calculable before any engineer is engaged, and it is the difference between an expansion that connects to the existing service and one that requires a new service from the utility.

Beyond those, state campground licensing regulates density, spacing and facilities in many states, and local zoning sets its own caps and length of stay limits. The practical sequence is to establish the permitted maximum first and size the expansion to it, rather than to size the expansion to the market and then discover the permit.

What the expansion actually costs

No government or academic source publishes a per site development cost for recreational vehicle sites. That should be stated in any study that quotes one.

The only structured figures come from an industry benchmarking survey of 2022 operating data. Among parks that added full hookup sites at an existing park, 69 per cent reported an average cost under $15,000 per new site. Among owners who developed an entirely new park, 60 per cent reported $15,000 or more per site and 20 per cent reported $30,000 or more. Those are self reported survey figures on small bases, the new park question drew 22 qualified responses, and they cover site level infrastructure only, without land, amenities, financing or contingency.

They are a planning range, not an estimate. The gap between the two groups is itself informative: adding sites to an existing park is materially cheaper per site than building one, because the water, sewer, electrical and road backbone already exists, which is precisely why this structure is common. But that logic only holds until one of the caps above binds, at which point the marginal site carries the cost of a new treatment system or a new electrical service and the per site figure stops being marginal at all.

For the connection side, a survey of 328 utilities put the median combined single family water and sewer connection charge at just under $2,400, though local tap and system development fees vary widely and many municipal schedules treat a park as one equivalent unit for the first space plus a fraction of a unit for each additional space. Published construction cost references carry unit line items an engineer assembles into a per site estimate, but they are subscription products and no single line item answers the question.

The conclusion for a study is straightforward. Use the survey ranges to sanity check, and carry a site specific engineer's estimate or contractor bids for the actual number, with the utility upgrade priced separately because it is a step cost rather than a linear one.

The occupancy figure everyone misuses

The most widely quoted benchmark in this sector is 68 per cent occupancy for full hookup sites. It comes from the same industry benchmarking survey, and it is right, and almost every use of it is wrong.

The figure is occupancy during the park's months of operation. It is not a trailing twelve month figure. In a seasonal market, applying an operating season occupancy rate to a full year overstates revenue substantially, and it does so in exactly the direction that makes a projection look financeable.

The rest of that survey is worth having in the same breath. Rustic and tent sites averaged 25 per cent during the operating season, rustic cabins and modern trailers 41 per cent, and park model cabins 52 per cent, the last on fewer than 30 responses. The median park in the sample had revenue of $3.52 million against total expenses of $2.89 million, on 23 acres and 92 rentable sites, with nightly rentals at $1.43 million and monthly or seasonal at $1.02 million. Two thirds of parks reported acreage available for expansion, which says something about how common this structure is. The survey drew responses from roughly 8 per cent of association members and 4 per cent of non members, and its aggregate revenue figures have been questioned for internal consistency, so it is indicative rather than precise.

There is no free, authoritative national occupancy or rate benchmark for private parks. That is worth saying plainly in a study rather than implying a precision that does not exist. What is free and verifiable is federal campground reservation data, which is downloadable at no cost with a public interface and carries booking dates, stay lengths, fees and the visitor's home state, which makes it a usable proxy for demand seasonality and for where visitors to a region come from, even though it covers federal campgrounds and bookings rather than private parks and gate counts.

Demand evidence that survives review

The sector data divides cleanly into what a reviewer can verify and what is a commissioned estimate, and a study is stronger for saying which is which.

Official counts. The most recent verified official establishment count comes from the economic census, which found 4,513 recreational vehicle parks and campgrounds with paid employees generating $3.1 billion of revenue, up 30.3 per cent from $2.4 billion five years earlier, at an average of $683,000 per park. Quarterly services survey revenue for the broader parks and camps group ran at $2,260 million seasonally adjusted in the fourth quarter of 2025 against $2,360 million a year earlier.

Trade counts, and the confusion they cause. Property counts and site counts are routinely mixed up in this sector, including by the same organisations across their own publications. One trade reference puts the private universe at 12,290 parks containing about 1,520,000 sites, which is the clearest published statement of the two figures side by side. One industry association's own pages variously cite more than 16,000, more than 18,000 and more than 20,000 campgrounds, all property counts mixing public and private. A widely circulated establishment figure in the low seven thousands is a proprietary business list count, not a census figure, and should not be presented as one.

Shipments, which are not sales. Wholesale shipments from manufacturers to dealers finished 2025 at 342,220 units, up 2.5 per cent, the second year of gains after bottoming at 313,174 in 2023 and still well below the pandemic peak. Towables were 306,191, motorhomes 36,029 and park models 4,305. The wholesale total carried a retail value of $20.40 billion. Texas received the largest share of shipments at 9.85 per cent, ahead of California, Florida, Michigan and Ohio. These are shipments to dealers, not registrations, and should never be described as sales to consumers.

Ownership, with a caveat that has to travel with it. A commissioned owner survey reported 11.2 million households owning a recreational vehicle in 2021 and 8.1 million in the 2025 edition. The difference almost certainly reflects a methodology or definition change rather than a collapse in ownership, and the methodology sits behind a member paywall. Quoting either number without the other invites a reviewer to find the discrepancy for you.

Federal context. The outdoor recreation satellite account put outdoor recreation at 2.4 per cent of national output in 2024, $696.7 billion in value added, with recreational vehicle activity contributing $27.5 billion, the second largest conventional activity behind boating and fishing, and the largest in nine states. Park service visits reached a record 331.9 million in 2024, up 2 per cent, having bottomed at 237 million in 2020. The first unified federal visitation report, published in 2026, gives the fiscal 2024 figures across six agencies, with the Corps of Engineers at 260.5 million and the Forest Service at 164.2 million, the latter derived from a probability based sampling programme rather than a turnstile count.

Industry panels, labelled as such. An annual camping report put more than 52 million North American households camping in 2025, roughly flat year on year and above pre-pandemic levels. It is an opt in online panel weighted to population, with just over 4,000 completed surveys, and it should be cited as an industry estimate rather than as a measurement.

For supply, the free primary sources are better than most people assume. State campground licensing registries list the licensed competitors, county assessor records give parcels, acreage and ownership, local permit portals reveal what is being built, and federal campground inventories are downloadable. A comprehensive forward pipeline usually still requires either manual permit searching or a subscription, and a study should say which it used.

Thirty days is a cliff in three different regimes

The same number governs eligibility, tax treatment and tenancy, and it is worth designing the operating plan around rather than discovering afterwards.

Eligibility, as above, turns on whether more than half of revenue comes from stays of 30 days or less.

Transient lodging tax generally applies only below a similar threshold. One state authorises the tax on stays of 30 days or less including campgrounds and parks, another applies a statewide transient room tax to parks but excludes continuous stays of 30 days or more, and county ordinances commonly tax campground stays under 30 consecutive days. So a guest crossing the line changes the tax character of the revenue as well as its eligibility character.

Tenancy is the third. Once occupancy passes a state threshold, commonly around 30 days but varying, a guest may acquire tenant rights, which converts a removal from an operational matter into a landlord and tenant proceeding. Parks manage this with written agreements and stay caps, and public campgrounds do it explicitly: one state limits camping to 10 nights in any 30 day period and 90 nights a year, stating that the purpose is to prevent residential use, another limits stays to 14 days in any 21, and federal land agencies commonly apply 14 days in a 28 day period.

For a study, this converts a soft observation about guest mix into a testable operating constraint. The projection should show the transient revenue share by year, and the operating assumptions should be consistent with whatever stay caps the park's own zoning and licence impose.

The off-season, and the coverage year

Coverage is measured annually, which is implicit in the way operating cash flow is framed as annual earnings against annual debt service. No supervisory guidance was found requiring that coverage for a seasonal business be measured across a full year rather than at a peak, or prescribing how off-season working capital should be sized. That is a negative finding rather than permission to ignore the question.

What exists is a product. The seasonal working capital line under the 7(a) umbrella finances seasonal increases in receivables and inventory and associated labour costs, revolving or non-revolving, to a maximum of $5 million. On a park with a short operating season and twelve months of debt service, that is the instrument that bridges the gap, and it belongs in the capital structure discussion rather than in a footnote.

The modelling point is simple: annual coverage can pass while the park runs out of cash in February. A monthly cash flow across the off-season, showing the low point and what funds it, answers a question the annual coverage ratio cannot.

How to structure the study

Nine points, all of them following from the material above.

Separate the two halves visibly. The historical audit of the existing park and the projection for the new sites should be legible as separate statements that also combine, because the coverage test will use only one of them.

Qualify the acquisition on history first, with the full post closing debt service. If the existing park does not cover at the applicable floor on trailing or adjusted earnings, the expansion does not fix it, and the study should say so early rather than bury it in a stabilised year.

Show the transient revenue share in every projected year, not only in the historical column, because the expansion is the thing most likely to break it.

Establish the permitted site cap in writing before sizing anything, from the wastewater authority first, then the drinking water thresholds, the electrical service calculation and the state licence.

Price the utility upgrade as a step cost, separately from the per site figure, and identify the site count at which the step occurs.

Convert any operating season occupancy benchmark to a trailing twelve month basis before it touches the revenue line, and show the conversion.

Label commissioned panel estimates as estimates and official counts as counts, with vintages, and keep property counts and site counts apart.

Model monthly through the off-season and identify what funds the trough.

Address the special purpose classification explicitly, because on a 504 file it changes the equity requirement by five percentage points or more and it is cheaper to know at scoping than at commitment.

For the cross-asset framework, demand regimes, valuation methods and reviewer tests, see the 2026 Feasibility Methodology Atlas.

Frequently asked questions

Can an SBA loan finance an RV park purchase and new sites in one transaction?

Yes. The proceeds can cover both the acquisition and construction at the same property, with staged disbursement, contractor and cost documentation and inspections attaching to the construction portion. The complication is not eligibility of the use, it is that the transaction is classified as a change of ownership for coverage purposes and the construction is not yet producing income when that test is run.

Are RV parks eligible for SBA financing at all?

Yes, subject to a revenue test. Recreational vehicle parks, campgrounds, marinas and hotels are eligible where more than 50 per cent of the prior year's revenue comes from transients staying 30 days or less and the business complies with zoning and other legal requirements. Mobile home parks and apartment buildings are not eligible, because the revenue is residential land rental rather than transient lodging.

Can adding sites make a park ineligible?

Yes, and this is the trap in expansion deals. The test is on revenue rather than site count, so filling a new phase with seasonal or annual guests can push transient revenue below the majority the rule requires. The transient share should be projected year by year, not assumed to hold at the historical level.

What coverage ratio applies to an acquisition plus expansion?

For applications receiving an SBA loan number on or after 1 October 2026, an initial acquisition must clear 1.25 to 1, measured on the last fiscal year end or the average of the last two, on a historical or adjusted basis, and post closing projections may not be used to meet it. Business expansions remain at 1.15 to 1, but that category requires the buyer to have operated a business in the same industry group for two full fiscal years under current ownership. Before that date the applicable edition allowed 1.15 to 1 on a historical or projected basis.

Can the projected income from the new sites count toward coverage?

Not toward the acquisition coverage test under the current edition. The expansion is financed as project cost and its forecast is upside, but the deal has to qualify on the existing park's history with the full new debt service included.

What actually limits how many sites can be added?

Usually a permit rather than the market. Onsite wastewater capacity is the most common binding constraint, followed by drinking water thresholds at 15 service connections or 25 people a day for 60 days a year, electrical service capacity calculated under the electrical code, state campground licensing and local zoning.

What does it cost to add a site?

No government source publishes a figure. An industry survey of parks that added full hookup sites at an existing park found 69 per cent reporting an average under $15,000 per site, against 60 per cent of new park developers reporting $15,000 or more and 20 per cent above $30,000. Those are self reported, on small bases, and cover site infrastructure only. The utility upgrade is a separate step cost and needs an engineer's estimate.

Is 68 per cent occupancy a reasonable assumption?

Only if it is used as what it is. That figure is full hookup occupancy during a park's months of operation, from an industry benchmarking survey with a low response rate, not a trailing twelve month figure. Applying it to a full year in a seasonal market overstates revenue, and a reviewer who knows the source will find the error.

Sources

1. 13 CFR 120.110, Ineligible businesses
2. 13 CFR 120.111, Eligible Passive Company conditions
3. 13 CFR 120.130, Restrictions on uses of proceeds
4. 13 CFR 120.212, Maturities of 7(a) loans
5. 13 CFR 120.882, Eligible project costs for 504 loans
6. SBA SOP 50 10 8, Lender and Development Company Loan Programs, effective 1 June 2025
7. SBA SOP 50 10 8.1, effective 1 October 2026, including Appendix 15, Changes of Ownership
8. SBA Information Notice 5000-880695, Issuance of SOP 50 10 8.1, 14 August 2026
9. SBA Procedural Notice 5000-872764, Revisions to SOP 50 10 8, effective 30 September 2025
10. SBA, CAPLines programme description, including the Seasonal CAPLine
11. SBA 7(a) and 504 FOIA loan-level datasets and data dictionary
12. 7 CFR 5001.3, Definitions
13. 7 CFR 5001.303, Applications for loan guarantee
14. 7 CFR 5001.306, Specific application requirements for Business and Industry projects
15. US Census Bureau, Economic Census, NAICS 721211, RV parks and campgrounds
16. US Census Bureau, County Business Patterns, 2022, released 27 June 2024
17. US Census Bureau, Quarterly Services Survey, NAICS 7212 revenue series
18. US Census Bureau, North American Industry Classification System, NAICS 721211 and cross-reference to 531190
19. US Bureau of Labor Statistics, Quarterly Census of Employment and Wages, NAICS 721211
20. RV Industry Association, December 2025 wholesale shipment report and 2025 RV Industry Profile
21. RV Industry Association and ITR Economics, RV RoadSigns forecast, autumn 2025
22. Go RVing and Ipsos, RV Owner Demographic Profile Study, 2021 and 2025 editions
23. Woodall's Campground Magazine, private park and campsite counts, 2022
24. OHI and ARVC, 2023 Industry Benchmarking Report, survey conducted by Readex Research on 2022 operating data
25. Kampgrounds of America and Cairn Consulting Group, Camping and Outdoor Hospitality Report, 2026 edition, released 14 April 2026
26. US Bureau of Economic Analysis, Outdoor Recreation Satellite Account, 2024, released 5 March 2026
27. National Park Service, 2024 Statistical Abstract
28. Federal Interagency Council on Outdoor Recreation, FY2024 Interagency Recreation Visitation Data Report, June 2026
29. US Forest Service, National Visitor Use Monitoring programme
30. Recreation Information Database and Recreation.gov, public interface and historical reservation data
31. National Fire Protection Association, National Electrical Code Article 551, Part VI, Sections 551.71 and 551.73 and Table 551.73(A)
32. US Environmental Protection Agency, public water system definitions under the Safe Drinking Water Act
33. Michigan Department of Environment, Great Lakes and Energy, licensed recreational vehicle parks and campgrounds
34. University of North Carolina Environmental Finance Center, water and sewer connection charge survey
35. USDA Rural Development, Water and Waste Disposal Loan and Grant Program documentation
36. Washington Administrative Code 352-32-030, camping stay limits
37. Wisconsin Department of Natural Resources and Massachusetts campground stay regulations
38. Bureau of Land Management and US Forest Service camping stay limits
39. California Revenue and Taxation Code Section 7280, transient occupancy tax
40. Kentucky Revised Statutes 142.400, transient room tax