It is very difficult to obtain a golf course loan in today’s uncertain economy. There are only a few investor groups interested in golf and only a handful of credit companies will consider golf, and even if they do, the Loan to Value is 40 to 60% with high rates over a short period.
Public funding with government guarantees is still available. While banks are not interested in conventional golf loans, they are interested in government guarantee loans. Under this type of program, the government provides a 90% guarantee and the bank always has 10%. These loans will finance up to 100% of costs over a 30 or 40-year term (at a preferred rate based on prime).
Example: An owner agrees to sell his golf course to a non-profit entity for $2,000,000. An additional $1,000,000 is needed for necessary improvements plus working capital of $200,000 for a total new loan of $3,200,000. With terms of forty years, annual payments are only $185,000 versus $367,000 for a typical conventional loan. The new non-profit owner does not co-sign or endorse the loan and will hire a professional management firm to oversee all day-to-day operations. When the loan is paid off, the owner can sell the course or continue to operate as income producing property.
These loans will not work in New York City, but will work in rural areas. At the current time this program is available, but considering today’s political climate, the future of this program is unknown.