Caravan park business loans: financing the land, the cabins and the quiet months

A caravan park is three businesses sharing one block of land. There’s a property, often a valuable coastal or riverfront one. There’s a short-stay accommodation business that lives and dies by school holidays. And there’s frequently a small residential landlord, collecting site fees from people who live there year-round. A lender looking at your park is trying to work out how much of each you are, because each one is financed differently.

Get that framing right and the rest of the conversation becomes much easier.

How do lenders actually look at a caravan park?

Start with what you own. The single biggest question is tenure.

Freehold parks. You own the land. Lenders can take a registered mortgage over it, which opens up commercial property loans: longer terms, and far less total cost than unsecured borrowing. Expect the valuer to assess the park as a going concern, blending land value with what the business earns, so poor trading figures can drag down a valuation even on a beautiful site.

Leasehold and Crown land parks. Plenty of Australian parks sit on Crown reserves or council land, run under a lease or licence. Here there is no land to mortgage. Lenders focus on the unexpired lease term, whether there are options to renew, what the rent review mechanism looks like and how reliable the trading is. Three years left on a lease and twenty years left are, to a credit team, almost two different businesses.

Management or operating arrangements. Some operators run a park on behalf of an owner. Borrowing in this model leans almost entirely on cash flow and the strength of the management agreement.

Beyond tenure, lenders pick apart the site mix:

Site type	How a credit assessor reads it
Powered and unpowered tourist sites	Low capital cost, highly seasonal income, sensitive to weather and fuel prices
Cabins and villas	Higher nightly yield, but they need maintenance and eventually replacement
Long-term or permanent residents	Steady monthly income, residential tenancy rules, lower upside
Annual sites (holiday vans left on site)	Reliable annual fees, often paid in advance

A park with a healthy blend usually reads better than one leaning hard on any single stream.

What do park owners typically borrow for?

Buying a park. Acquisitions are the big-ticket item. Freehold purchases often combine the buyer’s deposit with property-secured lending, sometimes topped up by a business acquisition loan or vendor finance. Part of the price is goodwill, and lenders are cautious about lending against goodwill alone, so expect them to want the land, or other property, doing most of the work.

Cabins and relocatable homes. Adding six or eight cabins can lift a park’s revenue noticeably. Where the cabins are manufactured units that can be lifted off site, equipment finance secured by the units is common. Where they’re built in place on footings, lenders tend to roll them into the property loan.

Amenities and infrastructure. Camp kitchens, amenities blocks, pools, jumping pillows, sewer and power upgrades. These rarely have resale value on their own, so they’re usually funded from property equity, a term loan, or cash flow.

Working capital through winter. Even good parks see takings fall away after Easter in the south or once the wet season sets in up north. The classic fix is a business line of credit: draw on it through the lean months, clear it when the summer bookings roll in.

Vehicles and park equipment. Ride-on mowers, utility vehicles, golf carts and maintenance trucks sit comfortably on equipment finance or a chattel mortgage.

Not sure which structure fits your park? Tell us what you’re planning and a specialist will talk it through; asking doesn’t touch your credit file.

Two details that catch caravan park buyers out

GST on a going concern sale. The ATO treats caravan parks as commercial residential premises. Sales are commonly structured as a GST-free going concern, which sounds tidy until you factor in long-term residents. Accommodation of 28 days or more can be input taxed, and if the park you buy is used mostly for long-term stays that don’t attract GST, the buyer can face an increasing adjustment after settlement. On a multi-million dollar park, that adjustment can be a large sum that nobody budgeted for. Before you sign, have your accountant work through the GST outcome using the park’s real site mix, and make sure your loan covers the worst case or that the contract deals with it.

The council approval to operate. In New South Wales, running a caravan park needs both planning consent and a separate approval to operate under section 68 of the Local Government Act 1993. That operating approval generally lapses after five years unless the council sets another term, so it must be renewed. Lenders and valuers will ask for a copy. A park with an expired or soon-to-lapse approval, or with unapproved structures on site, can stall a loan for weeks. Other states have their own licensing regimes, and the principle is the same: have the paperwork current before you apply.

Which risks weigh on a park’s borrowing power?

• Weather and natural disasters. Riverfront and coastal parks carry flood, storm and bushfire exposure. Lenders ask about insurance, and premiums in some regions have climbed sharply. If you’ve been through an event recently, our page on business loans after natural disasters covers what changes.
• School holiday concentration. A park that books out for six weeks over summer and sits half empty for the rest of the year has a narrower margin for error.
• Ageing cabins. A fleet of tired 1990s cabins signals a capital bill on the horizon, and lenders factor it in.
• Lease expiry. For leasehold parks, a short remaining term limits both the loan amount and the loan length.
• Residential tenancy obligations. Permanent residents bring state-based legislation on notice periods, site fees and park rules. Lenders want to see this is being managed properly.

A lender will often check whether the park’s earnings cover its repayments with a buffer. Our debt service coverage ratio calculator shows you how that test might look for your figures.

Documents to have ready

1. Title search or lease documents, including options and rent review clauses
2. Council approval to operate and any development consents for cabins or new sites
3. Two years of financial statements and tax returns, plus year-to-date figures
4. Twelve months of business bank statements covering a full season
5. An occupancy summary by site type and month, ideally from your booking system
6. A list of permanent residents and annual site holders with their fee arrangements
7. Quotes for cabins, infrastructure or works you’re funding
8. Insurance schedule showing building, contents and business interruption cover

Example: a coastal park adding cabins before summer

Hypothetical, for illustration only. A family owns a freehold park on the NSW mid-north coast: 80 tourist sites, 10 cabins and a dozen permanent residents. Easter and the summer holidays book out, and the cabins are full most weekends, but the owners turn away cabin enquiries for weeks at a time. They want to add six manufactured cabins at roughly $95k each, installed and connected, and have them earning by December.

Their bank is interested but wants updated financials and a fresh valuation, which would push settlement past Christmas. Instead, they place the six cabins on equipment finance secured against the units, which means the land isn’t tied up and the approval turns around in days. A modest line of credit covers the site works and the winter that follows. The following year, with the extra cabin income showing in the accounts, they return to the bank to refinance the lot on longer terms.

Where to from here for your park?

If you run a park, you already know how much hinges on timing: cabins have to land before the holidays, repairs can’t wait for the off-season, and a purchase contract gives you weeks, not months. We hear from park owners in exactly that spot, often after their bank asked for one more report.

Getting started is quick: around a minute online, and your credit file stays untouched while you find out what’s possible. We don’t forward your enquiry to a list of lenders who then all ring you. A person who understands tourism and property lending reads what you’ve sent and phones you back. Give us the true site mix, tenure and figures, because accurate detail is what lets us suggest the right option the first time.

Check your park’s finance options →