Refinancing a golf course: what a lender needs to see

What a lender needs to see before it will refinance a golf course

Every lender asks three questions. Can the course pay the loan from its own earnings? What is the property worth as security if it cannot? And what could go wrong before the loan is repaid? Your accounts answer the first, an appraisal the second, and the third rests on the documents behind the risks golf carries: water, leases, membership deposits and deferred capital.

For most lenders golf is not a standard loan. LIPG's head of capital markets wrote in March 2026 that financing leisure assets can be challenging, partly because their accounts do not fit the programs lenders use for mainstream property, and that lending expanded in 2025 but with stricter underwriting and a more selective choice of assets. Golf Property Analysts, an appraisal firm, reported in May 2026 that golf financing is still considered difficult but is available from several sources for courses that produce cash. Lenders in the Society of Golf Appraisers' 2026 survey quoted interest rates from 6% to 14.5%, averaging 9.1%, with amortization periods of 15 to 30 years.

Can the course pay the loan? Earnings and debt service coverage

The first test is debt service coverage: the cash the course generates for debt payments, divided by the payments due. For a loan guaranteed by the US Small Business Administration that is not a purchase, the minimum under rules in force since 1 October 2026 is 1.15, measured on historical or projected cash flow, and 1.0 across all the borrower's businesses and debts. Lenders in the Society of Golf Appraisers' 2026 survey reported requirements from 1.25 to 2.5, averaging 1.65. Lenders read the figure after their own adjustments, so a course that covers its debt only before a management fee and a reserve for replacements may fall short.

For an SBA loan, the lender bases its analysis on the three most recent years of financial information, meaning tax returns or a balance sheet and income statement, plus an interim statement for the current year, and it checks the tax returns against IRS transcripts. Have the operating data behind the accounts ready as well: rounds, revenue by stream and membership numbers.

If you guarantee the loan, the lender will look at you as well. Golf Property Analysts reported in May 2026 that many golf loans rest on the borrower's strength more than on the collateral. Under SBA rules, anyone who owns 20% or more of the borrower must give an unlimited personal guarantee, with a personal financial statement dated within 90 days of approval.

What the course is worth as security: the lender's appraisal

The lender will order its own appraisal. Under federal banking rules, a commercial real estate loan above $500,000 generally needs an appraisal by a state-certified appraiser. For an SBA loan the appraisal must follow the Uniform Standards of Professional Appraisal Practice, be dated within 12 months, be addressed to the lender and not be commissioned by you, and above $1,000,000 the appraiser must be state-certified.

What the appraisal counts matters as much as the figure. Under SBA rules the collateral appraisal may not include the value of intangible assets, and in the United Kingdom the RICS Red Book's guidance on valuations for secured lending asks the valuer to report how closing the business would affect the value of a trading property. A course whose value comes largely from the business can therefore support less debt than its price suggests. Lenders in the Society of Golf Appraisers' 2026 survey reported loan-to-value ratios of 50% to 85%, 66.7% on average.

If part of the loan pays for a renovation, ask early how the lender will value the course: as it stands, or as it would be once the work is done.

Water rights, ground leases and membership deposits

A lender will want to know that the water the course depends on goes with the property and will still be there during the loan. Limits matter as well: in Southern Nevada, golf course water budgets fell from 6.3 to 4 acre-feet per irrigated acre a year in 2024, according to the Las Vegas Valley Water District.

If the course stands on leased land, the lease is part of the security. Under SBA rules, when $500,000 or 30% of the loan, whichever is less, pays for improvements on leased property, the lease term, counting renewal options only you can exercise, should be at least as long as the loan. Where the loan finances improvements on leased land, the ground lease must allow the leasehold to be mortgaged, bar changes or cancellation without the lender's approval, and let the lender take over the lease after a foreclosure.

At a private club, refundable membership deposits are the third question. A club lawyer interviewed by Golf Property Analysts in 2021 noted that many deposits sold in the 1980s and 1990s, refundable after 30 years, are now coming due. Have a schedule of every deposit and the terms on which it is repaid.

Deferred capital: what the course needs, and who pays

A lender looks ahead to what the course will need during the life of the loan. On a golf course the largest item is usually irrigation: the USGA's Water Conservation Playbook puts a new system at $3 million to more than $5 million, with a traditional useful life of about 25 years.

Most courses pay for such work from their own reserves, and some borrow for it. In the Golf Course Superintendents Association of America's 2025 survey of 18-hole courses, 68% of respondents named cash reserves as a source of funding for capital projects and 24% named commercial loans. Only 34% agreed that funding for capital projects at their facility was sufficient.

A capital plan with costs and dates answers the lender's question before it is asked. Expect an environmental review too: the SBA lists golf courses and country clubs among environmentally sensitive industries, so an SBA lender must begin with a Phase I environmental site assessment, whatever the size of the loan.

Refinancing a golf course with an SBA loan

An SBA-guaranteed 7(a) loan can refinance existing business debt, under conditions in the rules in force since 1 October 2026. The debt being refinanced must have been current for at least the last 12 months, and a loan that has matured and gone unpaid for more than 29 days is no longer eligible. For most debt the new payment must be at least 10% lower than the old one; debt with a balloon payment is an exception. The lender must also explain in writing why the debt is being refinanced and how the new loan improves the business's financial position.

The SBA's eligibility rules exclude private clubs that limit the number of memberships for reasons other than capacity, so a private club should check this point first.

How to prepare before you refinance, renovate, sell or hand over

Start well before the loan matures, so the lender's questions do not arrive on a deadline.

Put the evidence in one place: the accounts and operating data; the title, water and lease documents; and a schedule of deposits, contracts and planned capital work.

Then test it the way a lender would. Slope Intelligence's Capital Readiness Assessment gives the course an AssetScore across 10 categories and 43 data points, sets out the material risks with the evidence behind each, from water rights and ground leases to membership deposits and deferred capital, and includes an indicative value range where agreed and supported by the evidence. The range is separate from AssetScore and is not a formal valuation or appraisal. AssetScore is not a credit rating, an independent valuation or an investment recommendation, and Slope is not a lender or a broker. The assessment shows you what a lender will see, so you can deal with it before you apply.

Questions owners ask about refinancing

Sources

Each link was opened and read on 19 October 2026.

1. 2026 Golf Investment Report Leisure Investment Properties Group, March 2026.
2. 2026 Golf Market Summary Golf Property Analysts, May 2026.
3. 2026 SGA Golf Investment & Lender Survey Society of Golf Appraisers, 2026.
4. SOP 50 10 8.1: Lender and Development Company Loan Programs US Small Business Administration, effective 1 October 2026.
5. Comptroller's Handbook: Commercial Real Estate Lending, version 2.0 Office of the Comptroller of the Currency, March 2022.
6. Appraisals required, 12 CFR 323.3 Federal Deposit Insurance Corporation; the OCC and Federal Reserve rules are the same, eCFR text current to 15 October 2026.
7. RICS Valuation: Global Standards (the Red Book), incorporating the International Valuation Standards RICS, effective 31 January 2025.
8. Drought and conservation measures Las Vegas Valley Water District, undated page.
9. Solutions to Private Club Legal Challenges Golf Property Analysts, 7 June 2021.
10. Water Conservation Playbook: Irrigation System Maintenance USGA Green Section, March 2025.
11. 2025 Capital Budget and Labor Survey Golf Course Superintendents Association of America, September 2025.
12. Ineligible businesses, 13 CFR 120.110 US Small Business Administration, eCFR text current to 15 October 2026.
13. Slope AssetScore methodology, scoring specification v2.1 Slope Intelligence, effective 8 May 2026, corrected 11 October 2026.