How Much Will a Bank Lend You to Buy a Caravan Park?

If you’re looking to buy a caravan park, it can be a dream opportunity combining lifestyle and business in a rewarding way. Whether you envision creating a thriving holiday destination or providing a welcoming space for long-term tenants, buying into this industry is a significant decision. For first-time buyers, understanding the financial landscape and what it takes to secure a loan is an essential part of the journey. This guide will walk you through the key considerations and help you prepare for the process ahead.

Loan-to-Value Ratios (LVRs) When You Buy a Caravan Park

Banks typically lend:

50% of the value for a Leasehold Caravan Park Business.

Up to 70% of the value for a Freehold Going Concern Caravan Park.

The remaining percentage must come from your equity. Understanding these limits helps you assess your financial readiness to buy a caravan park and plan accordingly.

Key Factors Banks Consider When You Buy a Caravan Park

When evaluating your loan application, banks will focus on several critical aspects:

Business Performance and Future Outlook
The bank will analyse the historical financial performance of the caravan park and its projected future cash flows. A strong, consistent revenue stream increases your chances of securing financing.
Your Experience and Plans
Banks want to know if you have the skills and expertise to manage a caravan park successfully. If you’re new to the industry, demonstrating a solid business plan and a commitment to learning can help.
Details of the Lease (if applicable)
For leasehold caravan parks, banks will review the length and conditions of the lease. A long-term lease with favourable terms is typically more appealing to lenders.
Additional Costs
Beyond the purchase price, banks expect you to account for other financial needs, such as working capital, stamp duty, and professional fees.

What You’ll Need to Apply for Caravan Park Finance

To apply for a loan to buy a caravan park, you’ll need to provide comprehensive documentation, including:

Contract of Sale (draft versions may suffice initially).

Historical and Projected Financial Performance reports.

Information Memorandum detailing the caravan park’s features.

Copy of Lease (if applicable).

Personal Assets and Liabilities Statement.

Business Plan outlining your goals and strategies for the caravan park.

Details of Your Experience in managing similar businesses.

Valuation Report for the caravan park.

The Four Key Elements Banks Assess Before You Buy a Caravan Park

When evaluating your loan application, banks will typically focus on these four areas:

Security – The bank requires sufficient security to protect its investment in case the business fails.
Equity – Your contribution (30% for Freehold Going Concern or 50% for Leasehold) is crucial.
Cash Flow – Also called serviceability, this ensures the caravan park generates enough cash flow to cover loan repayments.
Management Capability – The bank must be confident in your ability to manage the park effectively, which includes ensuring the loan is repaid on time.

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Ready to Buy a Caravan Park?
Partner with Rogerson Kenny Business Accountants

Navigating the process of buying a caravan park can be complex, especially if you’re new to the industry. At Rogerson Kenny Business Accountants, we specialise in helping aspiring caravan park owners buy a caravan park with confidence – from secure financing, and set your business up for success.

Our team has extensive experience in the caravan park industry, and we understand the unique challenges you’re likely to face. Whether you’re struggling to prepare a finance application, unsure about equity requirements, or need guidance on planning for operational costs, we’re here to help.

Take the first step toward realising your dream of buying a caravan park. Contact Rogerson Kenny today and let us help you achieve financial clarity and long-term success in this rewarding industry.

Download our FREE EBOOK ‘A Comphrensive Guide to Buying a Caravan Park’

Buying a Caravan Park?

Thinking about buying, running, or selling a caravan park? We’re here to make the process simpler for you. At Rogerson Kenny Business Accountants, we help caravan park owners like you navigate every step with confidence, backed by our deep industry expertise.

Get started with our Comprehensive Guide to Buying a Caravan Park – filled with expert tips and insights to help you succeed!