65-Site RV Park Acquisition and Expansion in Horry County, South Carolina: An SBA 7(a) Model Study

Model study: an illustrative feasibility analysis built on public data for Horry County, South Carolina; not a client engagement.

Project summary

All figures in this table are model results.

The credit question

A lender reviewing a file like this is not being asked whether Myrtle Beach draws campers. The question is narrower: can a 65-site park, bought from an owner-operator and enlarged in its first winter, carry roughly $359,000 a year of SBA debt service at a variable rate near 10%, when the seller's own books cover only 86% of that payment and a normalized view of those books covers less than half?

Four things have to be true for the answer to be yes. First, the park must be eligible at all: SBA treats recreational vehicle parks and campgrounds as eligible only when more than half of the prior year's revenue comes from transients who stay 30 days or less at a time, and treats mobile home parks as ineligible [1]. Second, the lender must be able to rely on projections rather than history, which SOP 50 10 8.1 allows for a change of ownership only when the property is an owner-occupied Special Purpose Property and the appraised value fully collateralizes the loan [1]. Third, the projected coverage must reach the 1.25x Initial Acquisition standard within two years of loan funding [1]. Fourth, the park must survive the coastal hazard that sits on top of its best-paying months, because a September hurricane on the Grand Strand is a planning case, not a tail event.

Location and county economy

Horry County is growing fast. The Census Bureau estimates its population at 427,551 on July 1, 2025, 20.9% above its July 2020 estimate of 353,774 [2] and 58.2% above the July 2010 estimate of 270,295 [3]. Occupied housing units rose 21.1%, from 131,143 in 2019 to 158,779 in 2024, in the American Community Survey figures published by the state's labor market office [4].

Income has risen faster than population, 25.2% from 2020 to 2024 [5], [6]. A wealthier resident base supports weekend drive-in demand in the shoulder months, and the same growth drives the construction and health care workforce that fills monthly sites.

For the Waccamaw workforce area, state projections put accommodation and food services at 35,842 jobs in 2022, the largest sector, ahead of retail at 29,610 and health care and social assistance at 20,631; health care is projected to add 3,976 jobs by 2032 and construction to hold near 10,500 to 10,800 [4]. Travelling clinicians and project crews are natural tenants of monthly RV sites. The county's 20 largest employers include Coastal Carolina University, several hospitals, county government and the county school district, and Hilton Grand Vacations [4], a broader base than a pure resort economy.

In 2023, 37,484 workers commuted into the county and 36,442 commuted out [4]. State 2025 traffic counts show 82,200 vehicles a day on US 17 between SC 707 and US 501, 65,900 on US 501 between SC 31 and the US 17 Bypass, and 60,800 on SC 31 between SC 22 and Robert M. Grissom Parkway [7]. US 501 carries 29,800 vehicles a day at the Marion County line [7], the inland gateway from the I-95 corridor. An inland park near US 501, SC 22 or SC 31 sits on the routes RV travellers already use, without oceanfront land cost.

Market analysis

Demand drivers: Grand Strand tourism

Visitor counts, spending estimates and hotel performance for the Grand Strand come from paid surveys and commissioned studies, which this model study does not use. The summer tourist calendar is what an RV park's cash flow follows.

Seasonality is the core credit fact. The model's monthly transient occupancy pattern, from 30% in the slowest month to 93% in the busiest, is an illustrative assumption shaped to that calendar.

Nightly, monthly and seasonal sites

Three guest types drive cash flow and SBA eligibility. Nightly and weekly guests pay the highest rate but arrive mostly between Memorial Day and Labor Day; in the model, June through August produce 47.8% of transient revenue. Monthly guests, mostly workforce tenants, pay far less per night but pay in January. Seasonal guests, mainly winter visitors from colder states and Canada, take a site from November to March.

The modelled park holds 15 sites for monthly guests all year and sells 10 of its 50 transient sites as November-to-March contracts, returning them to the nightly pool from April. The flex fills empty winter inventory without giving up a summer night.

The SBA transient rule counts revenue from stays of 30 days or less at a time [1], so monthly and seasonal stays fall on the wrong side of the line. At stabilization, transient revenue is 82.8% of site revenue in the model. The model finds the share would reach 50% or less if 40 of the 65 sites went to monthly use. That leaves room to lean into workforce housing in a soft summer, but an operator who drifts toward long-term housing can lose eligibility at the next transaction, so the share should be reported annually.

South Carolina's 7% sales tax on accommodations reaches "campground spaces" furnished to transients, and proceeds from sleeping accommodations supplied to the same person for 90 continuous days are not considered proceeds from transients [8]. Model revenue is net of tax. A November-to-March contract runs 151 days, so the tax treatment of seasonal contracts should be confirmed with the state Department of Revenue; the model does not depend on it.

Existing supply

Directories name the major campgrounds but rarely publish site counts. The state tourism agency lists five private oceanfront campgrounds in Myrtle Beach: PirateLand Family Camping Resort, Lakewood Camping Resort, Ocean Lakes Family Campground, Apache Family Campground and Myrtle Beach Travel Park, several with water parks, a fishing pier or lakes [9].

The largest supply is oceanfront and resort-scale, with water parks and beach frontage a 65-site inland park cannot match [9]; the state park requires a two-night minimum and says its rates vary by season and demand [11]. The modelled park competes for peak-weekend overflow, price-sensitive and longer-stay guests, and travellers who prefer an inland setting. Inland competitors, their site counts and their rates are the direct comparison, and a field survey of them is a condition of the model's determination.

No public pipeline list exists. New RV parks surface through rezoning requests, so a lender should review recent county planning commission agendas for inland proposals before approval; a single large approval near the subject could double the inland competitive inventory.

Demand method: capture of county camping nights

No public source counts campground nights in Horry County. The model therefore tests the subject's capture against assumed pools of county camping party-nights, from 0.8 million to 2.5 million.

Even the conservative case needs only 1.3% of the assumed county camping nights. Capture is not the binding constraint; price and seasonality are. The question is whether an inland park can sell 10,314 transient nights at $77.92 (2029 dollars) when oceanfront resorts discount in the shoulder months.

The model's stabilized transient occupancy of 61.6% is its most aggressive assumption. Part of it is mechanical, because ten winter sites leave the nightly pool, but no public occupancy series for Grand Strand campgrounds exists to test it, which is why the field survey of inland competitors matters.

RV industry context

KOA reports that over 52 million North American households camped in 2025, exceeding pre-pandemic participation levels [12]. RV wholesale shipments for the first half of 2026 were 163,644, down 14.2% from the same period of 2025 [13]. Campground demand depends on the fleet already on the road, so the decline is a signal of buyer strain rather than a direct revenue threat.

Forecast

The model holds market share flat after Year 3 and raises rates 3.0% a year from Year 2. Year 1 occupancy runs at 88% of the stabilized pattern while the expansion opens; Year 2 at 98%.

Assumptions

Every figure in the following table is a model assumption, not a market fact.

Site and technical

Site requirements

The modelled park is inland, with the 15 new pads outside any special flood hazard area, frontage on a state route and public water. Campground standards, density limits, setbacks, recreation space and any length-of-stay caps come from the county zoning ordinance, and the file needs the current official text rather than a third-party copy.

Zoning and permits

The file needs a zoning verification letter confirming the park is lawful, that 15 more sites are allowed, and whether any length-of-stay limit applies; a cap would cut directly into monthly and seasonal revenue. The SBA transient rule also requires the business to comply with all zoning and other legal requirements [1].

The model assumes public sewer can serve the new pads. If the site depends on onsite systems, timing and cost should be tested again before approval.

Construction approach

Work runs in the off-season, December to March, while the park is at its lowest occupancy, with one restroom building kept open throughout. The 15 new sites open on April 1, 2027, giving nine months of expanded inventory in Year 1.

Because the construction component exceeds $350,000, SOP 50 10 8.1 requires evidence of a 100% performance bond and labor and materials payment bond, builder's risk and workers' compensation cover before work starts, unless the lender retains a third-party construction management firm with funds control [1]. Renovation of $1,188,000 including contingency is 45.7% of the purchase price, above SBA's one-third test for substantial renovation, so the appraisal must estimate value upon completion and the lender needs a statement at completion that construction materially conforms to the plans [1].

Schedule: approval and appraisals in October and November 2026, under SOP 50 10 8.1, which applies to applications issued an SBA loan number on or after October 1, 2026 [15]; closing on December 1, 2026, after which the seller may stay only as a consultant for up to 24 months [1]; site work December to February; pads, pedestals and amenities January to March; new sites open April 1, 2027; first full stabilized season summer 2028, the season that must carry Year 2 coverage to 1.25x [1].

Development budget and sources and uses

Real estate uses total $3,598,000, or 87.6% of project cost. That matters because SOP 50 10 8.1 allows a maturity of up to 25 years on a Special Purpose Property change of ownership only when 85% or more of total project costs are for real estate [1]. Goodwill is kept to $150,000; a larger intangible allocation would shorten the blended maturity and raise debt service.

For an Initial Acquisition, SBA bases the 10% minimum equity injection on total project cost, and the requirement cannot be reduced or eliminated [1]. Seller debt counts only if subordinated and on full standby, with no principal or interest payments for the term of the 7(a) loan, and limited sources can supply no more than half of the required injection [1]. Here buyer cash alone is 15.0%, so the $205,000 note is extra support, not a substitute. At the 10% minimum, Year 2 coverage falls to 1.19x and the projection route fails.

Revenue build and operating expenses

Historical baseline

The model assumes a trailing twelve months for the 50-site park and normalizes it as a lender would: a paid manager in place of owner labour, imputed management, re-priced insurance, reassessed property tax, online-booking costs and a replacement reserve.

The $143,323 gap between the columns is the key number in the historical file: the buyer sees an 11.9% yield on the seller's EBITDA, the lender 6.4% on normalized NOI. SOP 50 10 8.1 allows prudent adjustments to the cash flow of the acquired entity, each justified in the credit memorandum [1], but none closes a gap this large. Historical DSCR is 0.86x or 0.46x against the 1.25x requirement [1]; the deal works only if the lender can rely on projections. The park is eligible: transient revenue is $417,227 of $527,149 in site revenue, or 79.1%, above the more-than-50% test [1].

Stabilized monthly build

Ramp to stabilization

Year 1 averages 61.25 sites (15 new sites for nine months). Revenue rises 20.3% into Year 2 and 5.6% into Year 3.

Operating expenses

The stabilized expense ratio is 53.0%. Payroll (13.2%) covers a resident manager and seasonal staff. Utilities total 10.7% because transient electricity is in the nightly rate. Insurance at 5.4% must be tested against a bound named-storm quote; doubling it would cut Year 3 DSCR by about 0.16x. Imputed management and the reserve are costs the seller never paid but the lender must charge.

10-year pro forma

Because expenses grow faster than revenue, the NOI margin drifts from 47.0% in Year 3 to 45.5% in Year 10; the model assumes no margin expansion after stabilization.

Debt structure

A change of ownership that includes real estate must be structured as a separate loan or blended on a weighted-average basis, with only the real estate portion amortizing beyond 10 years, up to 25, and the calculation made before any equity is applied [1]. Here the blend is 23.14 years, rounded to the nearest full year, 23 [1]. The regulation caps maturities at 25 years [16]. The 7(a) maximum is $5,000,000 and the guaranty cap $3,750,000 [16]; this loan carries the 75% guaranty for loans over $150,000 [1].

Prime was 7.00% on each business day from November 3 to 9, 2026 [14], giving 9.75% at a 2.75% spread. Variable rates on loans above $350,000 cannot exceed Prime plus 3.0% [1]; SBA publishes maximum fixed rates in the Federal Register [16]. The guaranty fee uses the SOP's maximum chart, 3.5% of the guaranteed portion up to $1,000,000 plus 3.75% of the guaranteed portion above it [1]; SBA may announce temporary fee changes for a fiscal year through an Information Notice [1].

Why structure decides the file

At the 10% minimum, Year 2 coverage is 1.19x and the two-year test fails [1]. Paying the seller note also fails. Seller debt that is not on full standby counts in the total debt that the business valuation and coverage must support [1], and the model amortizes it over 10 years, the longest amortization SBA allows when testing interest-only acquisition debt [1]. A loan sized to 1.25x on the seller's history would be $2,266,045, 55.2% of cost, leaving $1,841,883 of equity to find. The 25-year Special Purpose Property term adds 0.03x: useful, not decisive.

RV parks as Special Purpose Property

Everything turns on whether the lender can document that the park is a Special Purpose Property, which SOP 50 10 8.1 defines as "a limited-market property with a unique physical design, special construction materials, or a layout" that restricts its utility to the use for which it was built [1]. The SOP's 504 list of limited or special purpose properties names hotels, motels and other lodging facilities, marinas and swimming pools, but not RV parks or campgrounds; the change-of-ownership appendix gives storage units and hotels as examples [1].

The case for the classification is physical: graded pads, 50-amp pedestals, buried laterals, dump stations, a transient bathhouse and private roads serve no other commercial use without demolition. The case against is that the land could become residential lots. The lender must document why the property meets the definition, why its acquisition is integral to the business and why projections are appropriate [1].

If it does, the lender may rely on projections when the appraised value fully collateralizes the loan, must still calculate the historical DSC and analyze the variance, and must reach 1.25x within two years of loan funding; the business valuation must come from a certified general real property appraiser who has completed at least four going-concern appraisals of equivalent special use property within the last 36 months [1]. A Quality of Earnings report is not required for a Special Purpose Property acquisition regardless of price, and the price here is also below the $3 million threshold [1].

Two collateral rules need a careful reading. SBA appraisals of commercial real estate may not include "the contributory value of any rental income or the value of any intangible assets" [1], and the projected coverage calculation "may not include anticipated cash flow from rental income from the property" [1]. Transient site fees are lodging revenue by the same logic that lets SBA cite hotels; monthly fees sit closer to rent. The stress removing all monthly and seasonal revenue (0.90x) shows the cost of the narrow reading.

DSCR and break-even

Year 1 coverage is 0.93x; its $24,267 shortfall is covered 3.7 times by the $90,000 working capital. Year 2 reaches 1.26x, clearing the two-year requirement by one hundredth, and coverage rises to 1.62x by Year 10.

The park covers debt service at 51.3% transient occupancy but needs 58.4% for 1.25x, against a base of 61.6%: the debt has about ten points of occupancy to spare, the covenant about three. Revenue can fall 13.9% from Year 3 before NOI stops covering the payment.

Returns

Returns are high because the buyer pays for the park as it is and captures the expansion: an 11.9% Year 3 yield on cost against a 9.0% exit cap. Buyer cash is only 15.0% of cost, so even an 11.0% exit cap leaves the levered IRR above 25%. A credit officer should read this as incentive to perform, not safety: the same 85% non-buyer capital stack produces the thin Year 2 coverage.

Sensitivity and stress tests

The grid holds monthly and seasonal revenue constant. At 9.75% the park holds 1.25x down to 95% of base occupancy; 50 basis points more on Prime moves that line to about 97%. On a variable loan the rate axis is real: each 100 basis points costs about 0.09x to 0.10x.

The hurricane case closes the park for September and October and adds $50,000 of deductible and cleanup with no insurance recovery: coverage falls to 0.79x, a shortfall of about $76,000. Named-storm business-interruption cover and a six-month debt service reserve follow directly.

The recession case cuts transient occupancy 15% and rate 8%, which together reduce transient revenue by about 22%. Coverage falls to 0.89x; the covenant breaks and the reserve is drawn.

The loss of monthly and seasonal guests (0.90x) tests both demand concentration and the rental-income reading of the SOP discussed above.

If the new sites miss the 2027 season, Year 1 coverage falls to 0.64x and working capital is consumed, so completion by April 2027 should be a condition backed by bonding.

Hurricane and flood exposure

The hazard calendar overlaps the revenue calendar. September and October produce 17.3% of the park's transient revenue in the model and coincide with the county's highest probability of a major flood [17]. Inland siting reduces storm-surge risk but adds riverine risk: the county sits between the Little Pee Dee River and the Atlantic, with the Waccamaw running through it, and both rivers reached historic levels in September 2018 [17].

An RV park has one structural advantage over a hotel in a hurricane. Most guests drive their accommodation away. Damage is concentrated in pedestals, the bathhouse, roads and landscaping, and the revenue loss is a closure period rather than a rebuild. The budget includes $95,000 for drainage, paving and elevated electrical pedestals for that reason. SBA requires flood insurance, under the NFIP or comparable private cover, for any building collateral with any portion in a special flood hazard area [1].

Program compliance

Risks and mitigants

Model determination

As structured, the modelled project is financeable under SBA 7(a), but only on one path and only with conditions.

It is not financeable on historical cash flow. The seller's park covers 0.86x of the proposed payment on its own books and 0.46x once a lender charges the costs the owner has been absorbing. No set of prudent adjustments closes that gap. It is also not financeable at the 10% equity minimum, which produces 1.19x in Year 2 and fails the two-year projection test.

It becomes financeable when three things hold together. The lender documents that the park is a Special Purpose Property whose real estate cannot be separated from the business. The as-complete appraisal fully secures the $3,286,000 loan. And the buyer brings 15% cash, so Year 2 projected coverage reaches 1.26x and stabilized coverage 1.36x. On those terms the park clears every numerical SBA test in this model: transient share near 83%, real estate at 87.6% of cost, a loan well inside the $5,000,000 ceiling and a rate below the Prime plus 3.0% cap.

A lender approving a file like this would be likely to set the following conditions:

1. A credit memorandum that documents the Special Purpose Property determination and the variance between historical and projected coverage, with both ratios entered in the SBA system.
2. An as-is and as-complete appraisal by a state-certified general appraiser with going-concern experience in RV parks, supporting the purchase price and fully securing the loan.
3. A zoning verification letter, will-serve letters for water and sewer, and approved site plans for the 15 new sites before closing.
4. Contractor bonding or third-party construction monitoring with funds control, and a completion target of April 1, 2027.
5. A debt service reserve of about six months, or $179,000, funded by added buyer equity at closing or by a sweep of Year 2 and Year 3 cash flow.
6. Named-storm business-interruption insurance, flood insurance on any building collateral in a special flood hazard area, and bound quotes before approval.
7. Annual reporting of revenue by length of stay, with a covenant keeping transient revenue above 60% of site revenue.
8. A seller consulting agreement of up to 24 months and transfer of the reservation system, guest records and online listings.
9. A field survey of inland competitors' site counts, rates and occupancy.

The weakest assumption is transient occupancy. The model asks an inland park to sell 61.6% of its nightly site-nights after its winter sites move to seasonal contracts, and no public series exists to test that level. If a field survey of inland competitors shows lower occupancy, the right response is more buyer equity or a smaller expansion, not a longer amortization.