HOW TO FINANCE YOUR
DREAM GLAMPING SITE BY PAUL BOSLEY
O
ne of the greatest advantages glamping sites has over traditional brick and mortar accommodation are the low start-up costs and high return on investment. This does not mean however, that they are cheap. Purchasing the accommodation for your site is just one consideration, and it is important to remember everything else that is required to run a successful glamping site. This can include the land that your site will be located on, the infrastructure required such as water and electricity, signage, point of sale systems, furniture, vehicles, and tools. The point is that to acquire all these things to an acceptable level can become an expensive endeavor. Thankfully, there are options available to help prospective glamping site owners achieve their goal of creating their dream glamping site. Paul Bosley, Founder of Business Finance Depot, is here to talk us through a couple of these options, using case studies based on real life experiences.
CASE STUDY 1: Financing glamping on an existing RV Park with an Equipment Finance Agreement Frank and Vikki want to improve their existing RV park by adding an internet system and glamping structures to attract families who want the outdoor experience but do not own an RV. They have a mortgage with a local bank with a low, fixed rate mortgage so they decided to approach their local bank for financing. The local bank hesitated to offer additional financing and the cost to refinance their loan with another lender was prohibitive. They attended the Glamping USA Show in Aurora, CO, saw the glamping structures they wanted to purchase, costing $30,000 each installed. They visited the Business Finance Depot booth and learned that the $150,000 for 5 glamping structures could be financed using an equipment finance agreement (EFA). They learned that EFA’s use the glamping structures & IT equipment as the only collateral required
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so they decided to apply because they have excellent personal credit, and their RV park is profitable. The approval required 20% down and financed the equipment over 3 years. They were unhappy that the interest rate was 10%, but when they considered that it was a fixed rate and their expected rental income from the glamping structures will exceed the monthly payments, they decided to move forward because they were using other people’s money to improve their RV park and their monthly cashflow. Frank and Vikki were able to achieve their goal of adding an internet system and glamping structures to their RV park using an equipment finance agreement. There are many benefits to an equipment financing agreement over other forms of loans but perhaps the most important is that they can be completed much faster than SBA and USDA loans. “No matter what type of loan you are going for, there will always be a down payment. No one is going to finance you 100% of your project cost,
