How much can I borrow?
Estimate the indicative maximum loan your park's EBITDA and net operating income will service on a debt cover basis, with the implied loan to value.
Your estimate
Illustrative only. Not a quote or advice. Not an offer of finance.
Powered by PropertyCalculators.ai.
How the borrowing calculator works
On a holiday park, lenders size the loan from the trading income, not just the value. That income is the park's EBITDA, its net operating income from pitch fees, site fees and trading receipts, and the lender applies an interest cover ratio. We take your net operating income figure and divide by the cover ratio to find the maximum annual interest the deal can service. We then divide that by the interest rate to find the indicative maximum loan.
The formula is maximum annual interest equals net operating income divided by the cover ratio over one hundred. Maximum loan equals maximum annual interest divided by the rate over one hundred. If you enter a value, the implied loan to value equals the maximum loan divided by the value multiplied by one hundred.
Why debt cover drives the loan
Lenders want headroom so the loan can still be paid through a softer season, a quieter year or a rate rise. They usually set cover ratios between 125 and 145 percent, and price the loan accordingly. A higher ratio means a stronger cushion but a smaller loan. Where the EBITDA is seasonal or still building, it may cap the loan below the headline loan to value of 50 to 65 percent. To model the deposit and monthly cost once you have a loan figure, use our holiday park mortgage calculator.
Worked example
On a park producing 45,000 pounds of net operating income a year, at an 8.5 percent rate and a 130 percent cover ratio, the maximum annual interest is about 34,600 pounds and the indicative maximum loan is roughly 407,000 pounds. Enter a 650,000 pound value and the implied loan to value is around 63 percent, near the top of the usual range, so the lender may trim the loan slightly. Send us the trading accounts for a real view.
How much can I borrow: common questions
How do lenders decide how much I can borrow on a holiday park?
The main test is debt cover. Lenders size the loan from the park's EBITDA, its net operating income from pitch fees, site fees and trading receipts, and want that income to cover the loan interest by a comfortable margin, typically 125 to 145 percent. The value and loan to value, usually 50 to 65 percent on a trading park, then act as a second cap. Enter the net operating income, rate and cover ratio to see the indicative maximum loan.
What is an interest cover ratio or DSCR?
Interest cover ratio, often shown as debt service cover or DSCR, is the net operating income divided by the loan interest. A 130 percent ratio means the park's EBITDA is 1.3 times the interest, leaving a 30 percent cushion. Lenders use this to make sure the loan can still be paid through a softer season or if rates rise. Higher cover means a lower maximum loan.
Why is my borrowing capped below the loan to value figure?
Because the trading income has to service the debt. On a park with a short season, thinner pitch-fee income or a modest EBITDA, the net operating income may only support a loan below the headline loan to value, so debt cover becomes the binding constraint. Enter a value in the calculator and we will show the implied loan to value alongside the income based maximum.
Want to know what you can really borrow?
Send us the deal, with the latest trading accounts, and we will come back with a view on the loan and likely terms within one working day.