A little known loan program offered by the U.S. Department of Agriculture may provide funding for qualified park operators or other RV businesses located in rural areas who haven't been able to secure financing for improvements and expansions during the recession.

The USDA's Rural Business Guaranteed Loan Program typically provides up to $10 million in funding for rural businesses that need loans for a variety of reasons, including refinancing, repairs, modernizations, development and expansions. A fact sheet detailing the USDA loan program for the Business & Industry Guaranteed Loan program can be obtained at http://www.rurdev.usda.gov/rbs/busp/b&I_gar.htm.

"Local federally insured and regulated financial institutions are still making these loans," Bill Garpow, executive director of the Recreational Park Trailer Industry Association (RPTIA), told park operators attending Education Day Jan. 13 at Newport Dunes Waterfront RV Resort and Marina. The event was sponsored by the California Association of RV Parks and Campgrounds (CalARVC).

"This program is good for a campground or any other rural business that is financially sound, can meet the program's collateral requirements and has a justifiable need for the loan to make some good things happen in rural America. You can also use this kind of funding to purchase recreational park trailers for placement into a rental program. Another use might be to refinance the whole park and reduce your monthly cost of operations as a way to bring a profit back to your balance sheet. USDA is particularly interested in projects that could provide additional jobs and would conserve water or power."

Garpow said he learned about the USDA loan program during a seminar at the National RV Trade Show at Louisville in December. And while the loan application process is more cumbersome than usual, since it involves both a bank and the USDA, he said the program is worth considering given the unwillingness of most banks to lend money right now.

"If you qualify for this type of loan, the government will guarantee up to 80% of the loan," Garpow said, which essentially covers the bank's risk in making the loan and may result in a better loan interest rate.

The USDA defines "rural" as an area with a population of 50,000 or less. Garpow said park operators can find out if they qualify for the rural area requirement of this program by visiting the USDA's eligibility website and entering the address and zip-code of their business. http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do.

Equity LifeStyle Properties Inc. announced on Thursday (June 9) that it has executed two rate lock agreements related to $250 million in secured CMBS financing secured by 21 manufactured housing and three RV communities which the company expects to close within 120 days.
 

The rate lock agreements carry a blended all in interest rate of 5.06% per annum with a 10-year term, according to a news release.

The proceeds from the secured financings are expected to be used to partially fund the previously announced pending acquisition of a portfolio of 76 manufactured home communities containing 31,167 sites on approximately 6,500 acres located in 16 states (primarily located in Florida and the northeastern region of the United States) and certain manufactured homes and loans secured by manufactured homes located at the Hometown Properties for a stated purchase price of $1.43 billion.

The company anticipates closing on the acquisition of 39 of the Hometown Properties and Home Related Assets associated with such 39 properties on July 1 with a stated purchase price of approximately $519 million. The company's acquisition of the balance of the Hometown Portfolio and assumption of the indebtedness thereon is subject to receipt of loan servicer consents. The acquisition is also subject to other customary closing conditions and no assurances can be given that the acquisition will be completed in its entirety in accordance with the anticipated timing or at all.

Equity LifeStyle Properties Inc. owns or has an interest in 307 quality properties in 27 states and British Columbia consisting of 111,008 sites. The company is a self-administered, self-managed, real estate investment trust (REIT) with headquarters in Chicago.

Four years ago, Palmetto RV opened a bright, lively retail center in Jedburg, S.C., selling new travel trailers, campers and accessories.

As reported by the Post and Courier, Charleston, it was a prime location, right off Interstate 26. The economy was thriving. Gas prices fluctuated but were not routinely at onerous levels.

Then almost overnight, credit dried up as the national financial outlook darkened.

Realizing that change was afoot, company owner Mike Arnau closed the Berkeley County business and relocated to a site off S.C. Highway 41 in Mount Pleasant.

Instead of new campers, motorhomes and trailers, the venture purchases used RVs and travel trailers from auctions and private sales, then resurrects them with hardwood floors, stainless appliances, plasma TVs and other goodies. Motorhomes that sold for $130,000 or more new in the early to mid-2000's are offered at $30,000 to $70,000.

The six-employee operation has relied on its online presence, shipping or driving models across the country and as far as Australia.

But local interest is growing, said Josh Sisson, general manager who has been employed with the business for seven years.

"We mainly have been an Internet company for so long," he said. Sales to Charleston area RV enthusiasts make it "a bigger market," said Sisson, 36, who has eight years experience in custom fabrication.

Sisson runs the venture's day-to-day operations, provides estimates and schedules subcontractors.

His duties also include teaching classes and bringing in instructors for a novel "school" that Palmetto RV established to teach buyers the ins and outs of their trailers and motorhomes. The business teams with the local KOA campground off U.S. Highway 17 North to put on the two-day events, paying the way of out-of-town purchasers' trips here.

"You get a year's worth of knowledge in a couple of days," Arnau says.

Palmetto RV changed its business model to cope with the tough national economic picture. But the financial situation is brightening.

"Banks have loosened up," he said. South Carolina Federal Credit Union, for one, offers 15-year loans on travel trailers and motorhomes. "There is funding out there."

The Status of RVIA's Shows: Fore cited the strong demand for exhibit space at RVIA's upcoming National RV Trade Show in Louisville, Ky., and the California RV Show in Pomona as evidence of the industry's continued recovery. "The National RV Trade Show remains the industry's showcase event," he said. "I'm pleased to report that the outlook for both shows is very encouraging... The Pomona event will be larger this year than it was last year, and Louisville will be about the same size."

More Stringent New Federal CAFÉ Standards: Fore, in closing, addressed federal and state legislation and rulings that impact the industry, an area RVIA's Government Affairs Department has been involved in.

"Today, we have more federal issues that have a potential impact on our industry than we've ever faced before at one time," said Fore. "The new federal medium-and-heavy-duty vehicle CAFÉ greenhouse gas standards for the first time include pickup trucks with a GVWR of greater than 8,500 pounds and all motorhome chassis regardless of GVWR. In the past, new CAFÉ standards applied only to cars, light trucks and SUV's. RVIA has (previously) played an important role in making sure that NHTSA took towing into consideration. Our message was heard, and NHTSA made a number of concessions in setting the newest round of car, light truck and SUV mile-per-gallon fuel standards.

"But this new effort to set standards for medium and heavy duty vehicles is a double whammy," he added, "as both NHTSA and EPA are trying to harmonize a miles-per-gallon standard with a tailpipe greenhouse gas-emissions level. The fight today is much more difficult in an environment of high fuel prices, turmoil in the Middle East and no sign of any reasonable national energy policy coming out of Washington. RVIA has filed comments making a number of recommendations, one of which would exclude personal use vehicles such as motorhomes.

"But this is an uphill battle," Fore continued. "And while we need to stay strong in our thinking, we also need to be ready to work with the standards that these agencies ultimately set. These types of new regulations seem intended to have the government make decisions for all Americans regarding what they purchase and use. These types of regulations serve to set up false economies that are not consumer driven, but are driven by bureaucracy, often leading to more bureaucracy over time."