Funding a caravan park or campsite business

Britain has 1.8m caravans and an even higher number of tents. Owners are constantly looking for campsites - which could mean the basis of a lucrative business.

However, there is more to running a successful campsite than buying a field - or opening the gate on a field you have lying fallow. If you plan on doing more than renting an overnight pitch to a passing rambler, you will need to make some substantial investments. The right location is important. A well-drained level plot by the sea or popular tourist destination may be a vital first step towards a successful business, but you will need much more before you can call your campsite a business.

You may need to deal with a lot of legislation and provide some costly facilities. Providing a standpipe and a couple of portable toilets is no longer enough. Today's campers want good access roads, well-planned sites, clean lavatories and showers. They want hook-ups to water, electricity and increasingly a wifi link, and increasingly a shop, laundry and even a licensed clubhouse.

Good site maintenance is essential, as is a well-run booking service and, increasingly, the ability to book over the internet. You will also need to meet all your legal obligations.

You may need planning permission to open your site, and certainly if you are building permanent structures like toilet blocks and clubhouses. A licence is also required from your local authority if your site is to be used on more than 42 consecutive days at a time or more than 60 days in 12 consecutive months. The licence may contain conditions stipulating the number and type of units allowed, toilets, wastewater, showers, refuse disposal, fire safety, roads, footpaths, electrical installations, LPG storage and recreational space. It's a criminal offence to operate a campsite or caravan site without a licence, if one is required, and you will be subject to regular environmental health inspections will be made to ensure you are complying with the conditions. The fee to apply for a licence could be £600 or more, depending on your local authority.

The business will be seasonal - but the good news is that if you have a site in the right location, and with the right facilities in place, you could be operating a highly successful business that brings in a good income for part of the year, and requires very little investment for the rest of it.

The costs you will need to cover

At Rangewell, we know the challenges of setting up, buying or growing a campsite and caravan business – and the ways to provide solutions for them, and there are many funding options which can help you with:

• Setting up a campsite business
• Buying a campsite business
• Refurbishing and maintenance
• Funding for assets for your campsite business
• Working Capital Finance
• Merchant Credit Advance
• Insuring your campsite
• Tax Loans
• Dealing with problems
• Setting up a campsite business

Unless you already own suitable land, the initial cost will be to acquire a site. It may be important to ensure that it has - or is likely to receive - permission for use as a campsite. The high cost of a plot with suitable planning may make borrowing essential.

It may be possible to arrange this with a Commercial Mortgage, although not all lenders will be willing to help. Lenders may expect you to own another property and to have a personal income above a certain minimum level. Getting a mortgage to buy property to use as a campsite may be easier if you already own and operate a holiday home, and can show evidence of running a successful business.

Contact us to discuss Commercial Mortgages and other solutions for buying land. Traditional mortgages are not suitable if you are looking at property outside the UK. However, there are solutions which can provide the funds you need to buy a property abroad.

These can include loans and Commercial Mortgages secured on property that you own within the UK, which you can use to raise funds on them which you then use to buy your property abroad.

Of course, the costs of setting up a successful business may include some substantial work to provide facilities after you have bought the plot. You will need roads and hardstanding for caravans, and water and toilets as a minimum requirement. A shower block is desirable, and a clubhouse with a games room and a bar would be a valuable asset. A large site might need a shop, and offering a pool could increase in the number of booking you enjoy.

We can provide a number of solutions which might provide the funding necessary for this work.

Buying an existing campsite business

Setting up a campsite could mean considerable business risk, as you have no way of knowing how popular it will be or what kind of profits it may generate. An alternative may be to buy an existing campsite business. This should have some important advantages - not least that it should have the appropriate permissions in place, and may already have many of the improvements required to lift it from a bare field to a profitable business.

Even more important, it should have accounts from previous years trading. These are important because they give a potential lender something to base a decision on. If they can see that the campsite you want to buy is profitable, they can be confident that it will generate sufficient funds to repay their lending. This can increase your chances of being accepted for funding and may help you get the loan you need at a more attractive rate.

We can help you secure a number of solutions to fund a business purchase.

Finance for improving your campsite

Your campsite may need further investment to offer a greater appeal to visitors. As well as increasing the number of bookings, features like a clubhouse with a bar or a shop could increase the turnover you enjoy.

Funding for improving your campsite will need to be arranged on an individual basis. Call us for details. 

Finance for operating your campsite business

A campsite will mean a number of costs that will have to be met all year round - not just when campers are staying. You will need to cover business rates, and you will probably be busy even in the offseason with repairs and improvements.

You may be able to tackle some maintenance tasks yourself, but some, such as checking electrics and water supply will be best left to professionals.

You may also need staff, to be on site for checking campers in and out, and dealing with problems.

You will also need to look at marketing. While there are many services which can help publicise your site, you may need your own website, which will allow campers to make bookings online.

You may need to arrange finance for many of these expenses at the beginning of the season before the full income from your business starts rolling in.

Working Capital Loans may provide a solution. These are designed to provide the funds you need for the expenses of operating a business and are designed to be paid back once funds start coming in.

Find out more about Working Capital Finance.

Tax Loans - the answer to seasonal cash flow problems

Tax is an issue for every business. A large quarterly VAT or annual tax demand can cause problems with your cash flow, particularly if it falls at in the middle of your slow season.

Tax loans are designed to help. They let you spread the cost of your tax liabilities into affordable monthly payments, helping ensure that your campsite business does not have to face a drain on cash-flow at the worst possible time.

Benefits of a Tax Loan include:

• Better control of cash flow
• Fixed monthly payments
• Quick and simple to arrange
• Avoids issues with HMRC and potential penalties

Insurance cover for your campsite

You will face a number of insurance requirements - even if your campsite is a bare field.

Cover for any staff - even part-timers - is a legal requirement and you must have employers’ liability insurance up to the value of £5m to protect you against the cost of a claim if an employee is injured or becomes ill as a result of working for you.

You will also need insurance for your liability to customers and the wider public. Damage to a caravan caused by boggy ground or a faulty hookup will mean costs, and if negligence or a problem with your facilities were to cause injury or death of a camper, the liabilities would be huge.

You should consider speaking to a specialist insurer for the sector who tend to offer more suitable policies than mainstream insurers. There are a number of ways to provide for the costs. Find out more about funding for the premiums of insurance cover for your campsite business.

Helping campsite businesses with problems

Your campsite business could be highly successful, but remember, any business can run into financial difficulties. There are bills that come in even when campers do not, and any cash flow problem that meant that you cannot meet your immediate commitments could soon become a very serious problem.

In the worst cases, it means that you and your business cannot continue to trade.

If you find yourself with that kind of problem, call us at Rangewell. We know the solutions which can help your business deal with this kind of challenge. We can provide funding solution if your business has run into difficulties - and even if you have a damaged credit history or CCjs, we know the lenders which can help.

Find out more about finance for campsite businesses facing financial difficulties.

Why you need Rangewell to find finance for your campsite

It is possible to raise funding for a campsite, but many lenders will not be willing to help - especially if your property is outside the UK. At Rangewell, we know those that are.

We help businesses of all kinds find solutions to their financial problems.

Whether you have a straightforward, small-scale funding need for acquisition and development plans or require a complicated ‘Jigsaw’ funding plan made up of a combination of financial products for a development in Britain or overseas, we can work with you to find the answers.

Call us now to get our experts working for you.