SBA loans for motorcycle, ATV and powersports dealers

What the approvals show

This industry (NAICS 441227) covers dealers in motorcycles, scooters, all-terrain and side-by-side vehicles, snowmobiles, golf carts and other motor vehicles that are not cars, trucks, RVs or boats. Most sell new units under manufacturer agreements alongside used units, parts, riding gear and service. Over the period, 69 lenders approved 143 SBA 7(a) loans to them, worth $91,128,600.

The figures split into two groups. A third of loans were SBA Express, up to $500,000 with a 50% guaranty, used for needs such as working capital, equipment or a refinancing. At the other end, dealership purchases and real estate pushed 24 loans to $1 million or more, with the top tenth starting near $2 million. Only 9.1% of loans were fixed-rate, so most dealers carry the rate risk on their SBA debt as well as on their floor plan. See fixed vs variable rate business loans.

The low franchise share does not mean these dealers are unbranded. Most sell new units under manufacturer dealer agreements, and a lender reads that agreement as closely as it would a franchise agreement: its term, the territory, the facility and capital standards it imposes, and the manufacturer's right to approve a new owner.

A seasonal business on borrowed inventory

Dealers carry their new units on a floor plan: a revolving inventory line, often from a lender tied to the manufacturer, repaid as each unit sells. Manufacturers commonly ship ahead of the season and the floor plan may carry an interest-free period, after which interest and curtailment payments start on units that have not sold. The floor plan lender holds the first lien on those units, and an SBA lender comes in behind it under an intercreditor arrangement. How that works is covered in detail on SBA loans for used car dealers; see also intercreditor agreements.

What sets powersports apart is the calendar. Each product line has its season, and a dealer's cash flow swings with the mix it carries.

Lenders ask for at least two years of monthly results, the floor plan statements and audit reports, and an inventory aging by unit. A dealer whose off-season results cover fixed costs and debt service, even thinly, is a much easier credit than one that lives on the spring. A seasonal line of credit can smooth the gap; see seasonal lines of credit.

Where a dealer's earnings come from

New units carry thin margins, and much of a dealer's profit comes from what surrounds the sale. A lender separates the departments to see which ones carry the business:

• New units: volume and margin by brand, manufacturer incentives and holdbacks, and how dependent the store is on one manufacturer's programs.
• Used units: trade-ins and purchased units, reconditioning cost and aging.
• Parts, accessories and riding gear: steadier margin and a reason for riders to visit off-season.
• Service: technician capacity, labor rates and warranty work reimbursed by the manufacturer.
• Finance and insurance: commissions from arranging customer financing, service contracts and insurance. Lenders count it, but ask how it has held up as consumer credit has tightened and loosened.

Demand for these vehicles is discretionary. When consumer credit tightens or fuel and household costs rise, unit sales slow first. A lender will look at how the dealer performed in its weaker years and what the fixed-cost base looks like against them.

The building and the lot

SBA 504 financed 36 projects in this industry at a median of $890,500, a high count next to 143 7(a) loans. Dealers need showroom space, service bays, secure outdoor storage and road frontage, and manufacturers set facility standards a dealer must meet. Owning the property removes the landlord risk and fixes the occupancy cost. 504 finances owner-occupied real estate, typically 50% from a bank, 40% from a certified development company and 10% from the borrower, and the dealer must occupy at least 51% of an existing building or 60% of new construction. A 7(a) loan can finance real estate over up to 25 years. See SBA 7(a) vs SBA 504.

Buying a dealership

Acquisitions were 20 loans (14%), above the national 10.4%, at a median of $1,657,500 and a median rate of 9.5%. The median purchase loan is more than seven times the industry's median loan, because a dealership purchase often includes the real estate as well as the business goodwill dealers call blue sky. See buying a business with its real estate and financing goodwill.

The manufacturers come first. Dealer agreements generally require the manufacturer to approve a new owner, and a manufacturer can impose capital, experience and facility conditions or decline. A buyer should start those approvals early and make them a condition of the deal. The floor plan also has to be replaced or assumed at closing, and the inventory is counted and priced separately from the goodwill. See change-of-control consents.

SBA's change-of-ownership rules apply: equity of at least 10% of total project costs; a seller note that counts toward it, up to half, only on full standby for the life of the SBA loan; no earnout; and an independent business valuation where the amount financed, less appraised real estate and equipment, exceeds $250,000. Under SOP 50 10 8.1, from 1 October 2026, a change of ownership must show debt service coverage of 1.25x on historical results, financial due diligence is required on every one, and a quality of earnings report on acquisitions of $3 million or more excluding real estate. The seller may consult for up to 12 months, or up to 24 months from that date. A purchase larger than the 7(a) limit of $5 million needs another piece alongside it: a 504 loan for the real estate, which since July 2026 counts against a separate limit, or conventional debt; see acquisitions above the SBA limit.

Preparing a dealer's file

SBA's standard list applies: business tax returns for 2–3 years, a P&L and balance sheet with a year-to-date P&L through last month-end, a debt schedule with copies of notes being refinanced, and personal tax returns and a personal financial statement for each owner of 20% or more, each of whom personally guarantees the loan. For a purchase, add the target's latest full year of figures and the letter of intent.

Then add the dealer-specific pages: monthly results by department for two years, the dealer agreements, the floor plan agreement with recent statements and audits, a unit inventory aging, and the dealer license and bond.

Monthly results by department show a lender how the dealership gets through the off-season.

Transparent builds that into a full lender package — financing model, lender presentation, blind teaser and underwriting memo — in a day, and takes it to the 278 lenders in its book that write SBA 7(a) and 504. On SBA loans the lender pays Transparent, not the borrower. See how we underwrite.