Most RV park and campground construction financing calls start the same way: borrowers want to know how much they need to put down, whether SBA even covers this type of project, and whether a startup with no operating history can actually get approved.

The short answers are 10% (sometimes $0), yes, and yes — but those answers don’t do justice to what the SBA 7a and 504 programs actually make possible for the right borrower. So let me walk through how these loans actually work for ground-up RV park and campground construction, including a real deal scenario and the loan structure that almost nobody is talking about.

Why RV Park and Campground Construction Can Be Hard to Finance

Most conventional lenders aren’t comfortable with this type of project — and it’s worth understanding why, because it explains exactly why SBA financing is so well-suited for it. A ground-up RV park or campground combines two types of risk that lenders dislike individually and really dislike together: construction risk and business startup risk. The property doesn’t exist yet, there’s no operating history, infrastructure costs are significant, and revenue builds gradually rather than starting on day one. That combination eliminates most conventional construction lenders before the conversation even gets started. SBA lenders are structured to handle it — which is why for many of these deals, SBA isn’t just the best option, it’s sometimes the only one that actually works.

First: Can You Really Get an SBA Loan to Build an RV Park or Campground From Scratch?

Yes — and this surprises a lot of people, because most construction lenders want to see operating history before they’ll put money into a project. The SBA 7a doesn’t require it. The right SBA lender will underwrite a ground-up RV park or campground construction loan based entirely on the borrower’s qualifications, the business plan, and the financial projections. No operating history required.

The property needs to operate as a short-term lodging business — meaning more than 50% of projected revenue comes from stays of 30 days or less. That’s the primary SBA eligibility test for this property type, and it’s worth confirming your revenue mix reflects this before you go too far down the road with a lender.

Beyond that, the range of eligible project types is broad:

• New RV park construction (ground-up)
• New campground construction (ground-up)
• Glamping resort development (yurts, safari tents, luxury cabins)
• Cabin rental property development
• Private retreat development
• Expansion of an existing park or campground
• Acquisition plus construction or significant improvements

The SBA 7a for RV Park Construction: A Real Deal Scenario

Example of an SBA 7a construction deal for a new RV park to show you what the program actually looks like in practice.

A few things worth noting in that scenario:

The interest reserve eliminates out-of-pocket payments during construction. The borrower is not making loan payments while the park is being built. Those payments are baked into the loan itself. This is unusual for commercial construction financing — many conventional construction loans require the borrower to service the interest out of pocket during the build period.

The post-opening working capital covers the ramp-up period. The best SBA lenders for this type of deal will build in enough working capital to cover 12 to 24 months of loan payments after the park opens — while occupancy is building and cash flow hasn’t reached stabilization yet. Again, financed into the loan. The borrower isn’t scrambling to make payments out of pocket while they’re also trying to market a brand-new park.

The SBA Guaranty Fee and all closing costs are financed in. SBA loans are all about conserving the borrower’s cash and they allow you to finance all closing costs. Some lenders will even reimburse things paid out of pocket prior to closing — like appraisals and environmental reports — right at the closing table.

The 10% equity injection is flexible on sourcing. Current SBA rules (updated June 2025) allow the required equity injection to come from cash, land equity if you already own the site, borrowed funds (if you have stable outside income to service them), investors, ROBS retirement fund rollovers, or a combination. The seller of the land can also contribute up to half of the required equity in the form of a note on full standby for the life of the loan.

Also, an important key detail: if you have owned the land for more than 1 year, you can count the accumulated equity based on current appraised value towards the down payment or equity injection requirement.

The 7 Benefits That Make This the Best Construction Loan Most People Have Never Used

When the SBA 504 Makes More Sense for RV Park or Campground Construction

The 7a gets most of the attention for construction deals, and for good reason — it’s more flexible, requires less down (or no down) for experienced borrowers, is a quicker/easier process and only requires 1 approval from a lender that has full control over the process. It handles the full range of uses under one loan. But for larger projects, the 504 is worth a serious look.

Here’s the standard 504 structure for an RV park or campground construction loan:

• First mortgage (conventional lender): covers approximately 50% of the total project cost
• 504 second mortgage (SBA/CDC): covers approximately 30–35% of the project cost at a long-term fixed rate
• Borrower equity injection: 20% for a startup special use property — which is what most new RV parks and campgrounds are classified as (or 15% for a business expansion).

The 504 is an unusual 2-loan structure and the second mortgage is typically a lower rate than most traditional lenders can offer, but there are a few drawbacks:

1. long term prepayment penalties. Usually 5 years on the first and always 10 years on the second.
2. it’s a bit of a clunky process. It requires 3 approvals: 1st and 2nd mortgage lender and the SBA.
3. 15% to 20% down
4. No working capital, so you have to get a 3rd loan (a 7a loan amortized over 10 years) for working cap.

However, the 504 has a very real place for borrowers building a larger project they intend to hold long-term, and the low fixed rate 2nd mortgage has value – especially if used as part of flexible structure outlined below.

The 504 Construction Structure Worth Considering

Here is where it gets interesting. We have access to 504 lenders who will structure the first mortgage as a 30-year amortization with 2 to 3 years of interest only on the front end — which means the effective loan term on the first mortgage is 32 to 33 years.

7a lenders also offer interest only on the front end, but the longer term and amortization of the 504 – as well as the interest only period – help those financing projects between approx $8 and $20 million access similar benefits. (It can be difficult to get even the most creative 7a lenders to do loans above $7 million).

On a $8 million first mortgage, the difference between a full amortizing payment and an interest-only payment at a moderate rate is approx $10,000 per month. That’s real cash flow breathing room during the first two to three years of operations.

And here’s the layer that makes this structure even more powerful: for borrowers who need working capital above and beyond what the 504 covers, a smaller SBA 7a loan can be layered alongside the 504 to provide additional operating capital at closing. The 504 handles the real estate at excellent long-term terms; the 7a handles the working capital and other soft costs that the 504 doesn’t cover.

This structure isn’t available from every lender. It requires a lender with real 504 construction experience who is comfortable with interest-only periods on the first, and a separate 7a loan for the working capital layer AND it can be done are even larger transactions if the borrower takes advantage of the Green 504 which allows borrowers to access significantly more capital.

What You Need to Qualify

SBA construction loans for RV parks and campgrounds are approved based on the overall strength of the borrower and the deal — not a single checklist item. But the things lenders consistently look for are:

• A credible business plan and realistic financial projections — this is the underwriting story for a startup deal. If yours isn’t strong, neither is the loan package. I covered this in detail in a separate post: How Lenders Evaluate Business Plans and Financial Projections for RV Park Construction Loans.
• Relevant experience — Ideally, an SBA lenders would love it if you have hospitality, property management, RV park operations, campground management, or similar, but it is absolutely NOT a requirement that you do. You don’t need to have owned an RV park before, but you need to be able to demonstrate to a lender that you the right skillsets and that you understand the journey you are about to embark on.
• Post-closing liquidity — lenders want to see that you have reserves beyond what’s being financed into the loan. The specific amount varies by lender, but having cash/liquid assets post-closing matters.
• Good credit — there’s no SBA minimum score for loans over $350,000, but realistically most lenders (especially lower rate lenders) would like to see a decent score. Strong credit, especially in recent years, matters more than a single period where your credit may have been imperfect.
• A large enough loan request — most active SBA lenders in this space don’t like to do construction loans that are too small. The reality is that theses loans are a pretty heavy lift for SBA lenders and smaller loans just aren’t profitable enough for the economics to make sense. i.e. it can be difficult (not impossible) to get an SBA lender to do a construction loan of less than $750K or $1 million.

One More Thing: The Short Prepayment Penalty as an Exit Strategy

I want to come back to the prepayment penalty point because I think it gets undersold.

On a ground-up RV park construction loan, the timeline typically looks like this: 6 to 18 months to build, then 12 to 24 months to ramp up to stabilized occupancy. By the time you’re at stable operations — say 30 to 36 months from closing — the prepayment penalty on your SBA 7a is at 1% or gone entirely.

At that point, you have a stabilized, cash-flowing RV park with real equity, possibly a short remaining prepayment window, and the ability to refinance into long-term fixed rate financing if the terms make sense. Or sell. Or use the equity and restored SBA eligibility to fund the next deal. None of those options require your permission from the SBA lender. The 7a structure builds that flexibility in from day one.

Most non-SBA bank loans cannot offer this. Most balloon in five years and require you to re-qualify on the lender’s current terms at that time — which may or may not be favorable. The 7a doesn’t work that way.

Frequently Asked Questions