Banks don't lend on the park. They lend on the NOI.
Whether you're refinancing, borrowing for pedestals and pads, or buying your first park, the lender asks one question before anything else: does the park's income cover the payment, with room to spare? That room is the debt service coverage ratio.
A DSCR of 1.00 means every dollar of NOI goes to the bank. Most lenders want 1.25 or better. SBA set a 1.10 floor for 7(a) Small Loans (up to $350,000) in March 2026, but its SOP 50 10 8.1 (loans on or after Oct 1, 2026) requires 1.25 for acquisitions, and the bank usually sets its bar higher than SBA's.
How to use the numbers
- Monthly payment is standard amortization: your loan, your rate, your term.
- Your DSCR tells you if the loan passes. Under your lender's number, it doesn't get approved as written.
- Max loan your NOI supports is the most a lender can size at their DSCR, rate and term, before loan-to-value limits. The real loan is the lower of this and what the appraisal allows.
- Price your NOI supports takes that max loan and grosses it up at your loan-to-value. Buyers: if the asking price is well above this, the income doesn't support the price.
- Cash-on-cash is cash flow after debt divided by your down payment or equity. Closing costs and SBA fees aren't included, so the real number is a little lower.
Seasonal parks get extra scrutiny
A park that makes most of its money in four summer months still owes twelve payments. Lenders know it, so expect them to look hard at monthly cash flow and reserves. Two ways to help: show two to three years of clean books that match your tax returns, and build a monthly guest base that covers fixed costs in the slow months. Run monthly vs nightly numbers.
When the DSCR doesn't work
Short on coverage, you have four moves: borrow less, put in more cash, raise NOI before you borrow, or bring in equity instead of debt. Equity from a partner has no monthly payment, so it doesn't count against DSCR at all. That's how our Value-Add Partnership funds upgrades: our capital, no bank loan, no personal guarantee.
Every $10,000 of NOI added before a refinance raises the loan your park can carry. At 7.5% over 25 years and a 1.25x requirement, that's about $90,000 more borrowing power.
Questions owners ask
What DSCR do lenders want for an RV park loan?
Most lenders want 1.25x or more, meaning NOI is at least 1.25 times the annual loan payments. Under SBA's SOP 50 10 8.1 (loans numbered on or after Oct 1, 2026), buying a business or park needs at least 1.25x, measured on actual results, not projections. Banks often want more cushion. Seasonal parks often get asked for more cushion.
How long can an RV park loan be amortized?
SBA 7(a) loans that finance real estate can run up to 25 years. Conventional bank loans vary. Many amortize over 20 to 25 years with a shorter balloon, so check your term sheet.
What interest rate should I use?
The one on your term sheet. Rates move with Prime. SBA caps the variable rate on 7(a) loans over $350,000 at Prime plus 3 percentage points, so a current Prime rate plus 3 is a reasonable worst case to test.
How much can I borrow against my RV park?
The lower of two numbers: what the lender's loan-to-value limit allows on the appraised value, and what your NOI can carry at their DSCR. The calculator shows the second one as Max loan your NOI supports.
My DSCR is too low. What are my options?
Raise NOI before you borrow, put more cash in, borrow less, or bring in equity instead of debt. Equity from a partner has no monthly payment, so it doesn't count against DSCR. That's how our Value-Add Partnership works.
Does this include closing costs and SBA fees?
No. Guaranty fees, appraisal, environmental and legal costs are left out, so your real cash in will be higher and your cash-on-cash return a bit lower than shown.
Keep going
- How to finance RV park improvements
- RV Park NOI & Expense Ratio Calculator
- RV Park Valuation Calculator
- Buyer due diligence checklist
Sources: SBA 7(a) loan terms (25-year maximum for real estate; variable rate cap of base rate + 3.0% over $350,000). SBA7a.loans on required DSCR (most lenders want 1.25x or more). SBA Procedural Notice 5000-876777 (7(a) Small Loans DSCR of at least 1.10:1, effective March 1, 2026). Estimates only, not a loan offer or lending advice.