Campsites and holiday parks are the fastest-changing corner of Scottish hospitality. The NC500, the west coast and the islands have more demand for pitches, pods and lodges than they have supply for half the year, and the sites that add units well are trading at levels their previous owners never saw. The finance has not kept up. Most lenders do not understand a business whose income comes from a field, and the ones that do fund it in two halves that need putting together properly. We own and run a west coast hotel, we trade in the same market, and this page covers how these projects are actually funded.
An established site with pitches, facilities, a booking operation and trading accounts is a trading business, and lenders who know the sector fund it as a commercial mortgage against a going-concern valuation. What the valuer looks at: the number and type of pitches, the licence and any conditions on it, the facilities block and its condition, occupancy through the season, the split between touring, static and glamping income, and the accounts. Sites with a shop, a bar or a cafe are valued on the whole trade.
Deposits typically run 30 to 40% of the price (indicative), higher than for hotels, because the security is largely land and the value sits in the trade rather than the buildings. Lenders will not fund LBTT, fees or working capital, so those come from cash on top. Where an owner’s house is included, the same question arises as with guest houses and self-catering sites: if the house is the smaller part and the site is clearly the business, it is a commercial case; if the house dominates the value, part of the purchase drifts towards residential lending, which we do not arrange.
This is the question we get asked most. A site wants to add six pods, two cabins and a shepherd’s hut. Is that a property loan or an equipment loan? The answer is usually both.
Units that can be moved, which covers most pods, cabins on skids, shepherd’s huts, safari tents on decking and touring-style lodges, are equipment. They go on asset finance, typically hire purchase or lease over 3 to 7 years, secured on the units themselves rather than the land. Deposits are often just the VAT, approvals come in days on clean cases, and the payments can be shaped around the season (indicative). Because the security is the unit, this route works on croft land, on islands and on sites where a property lender would struggle.
The ground works are property. Hardstanding, drainage, electrical hook-ups, water and waste connections, access roads, a new facilities block and anything on foundations become part of the site and fund through a commercial mortgage, a refurbishment facility or, for a bigger scheme, development finance for conversions and new build released in stages against certified works. Property lenders will want to see planning consent for the new pitches before they advance against them.
A typical structure: the site refinanced onto a commercial mortgage that releases the money for the ground works, and the units on a separate asset finance agreement. The two run alongside each other, the asset finance is quick and does not touch the property, and the site keeps its main borrowing clean.
Planning is where glamping projects come unstuck. Most councils treat new pitches, permanent pods and additional static units as development needing consent, and conditions on the site licence cap the number and type of units. Lenders know this. A property lender will not advance against pitches that do not have consent, and an asset funder, while it does not check planning, will not want its units sitting on a site facing enforcement. Get the planning and the licence position clear before the application, and if consent is still in progress, be honest about the timeline. A phased plan, where the first units go in on existing consent and the rest follow, is easy to fund and common.
A meaningful share of Highland and island campsites sit partly or wholly on croft land. Crofting tenure changes what a lender can take as security and how, and mainstream lenders step back from it. It does not stop a deal. It means choosing a lender and a solicitor who handle crofting law weekly, deciding early whether decrofting the site is the right route, and starting that process before the application rather than during it. Asset finance on the units is unaffected, which is one reason it is so useful on croft sites. Other rural title issues, from access over a neighbour’s land to shared water supplies, need clearing up before a valuer visits, because they show up in the report either way.
Island and remote sites narrow the lender field sharply. Some lenders decline island postcodes outright, some will look at Skye, Mull and Islay but not the smaller islands, and a few genuinely like strong destination sites on the tourist routes and price them fairly. Loan-to-value tends to sit 5 to 10 points below the mainland equivalent (indicative), the valuation takes longer because the surveyor has to get there, and the comparable evidence has to be built rather than assumed. Ferry costs, staffing and utilities need explaining in the pack rather than hiding. Our Argyll and islands and Highlands pages cover the postcode question; the short version is that a deal declined at one lender because of the postcode often completes comfortably at another.
The plan that arrives most often is ambitious on units and light on cash. A site is bought at 65% loan-to-value, ten pods are added on asset finance, the ground works are funded by the lender, and the buyer’s own contribution is small. Lenders push back on that structure, and they are right to. A campsite purchase needs the deposit on the site, the LBTT and fees, the first season’s working capital, and the deposit and ground works on any new units, and each of those is cash before the trade produces any. Asset funders want equity in the units; property lenders want to see the ground works costed properly with a contingency. A plan with a realistic capital deposit, phased units and honest first-year figures funds. A plan that relies on the new pods paying for themselves by August does not.
An enquiry about a campsite on an island: forty touring pitches, a facilities block, an owner’s house, part of the ground on croft tenure, and a plan to add glamping pods and a couple of lodges. The trade is strong in season and the accounts are clean, but the price is high, the buyer’s cash covers the deposit on the site and little else, and the planning for the pods has not been applied for.
The shape that works: the site funded on a commercial mortgage from a lender that lends on the island, at 55 to 60% of the going-concern valuation (indicative), with the crofting element handled by a solicitor who does that work weekly. The pods and lodges deferred to a second phase, on asset finance once planning is in, with the first season’s surplus providing the equity in the units. The ground works costed properly and phased with them. It is a slower plan than the buyer wanted and it is the one that completes.
Vehicles, mowers, hot tubs and the shop fit-out all go on asset finance. A new facilities block or reception building is development finance. Sites with cottages or chalets as well as pitches are covered on our holiday let and self-catering business finance page, and the hospitality finance page sets out everything we arrange for the sector. Rough out the repayments on the commercial mortgage calculator before you offer.
Sealed bids, missives and lender coverage shape every deal here. Read our guide to property finance in Scotland.
Usually as equipment. Pods, cabins and lodges that can be moved go on asset finance over 3 to 7 years, secured on the units themselves. Fixed structures with foundations and services are part of the property and fund through a commercial mortgage or development facility. Most projects use both, and getting the split right is most of the structure.
Asset finance on the units does not depend on planning, but installing them without consent puts the site and the business at risk, and property lenders will want the planning position resolved before they advance against new pitches. Sort the planning first.
Typically 30 to 40% of the price for an established trading site (indicative). Sites with thin accounts, a large owner's house, croft title or an island postcode sit at the top of the range, and the capital cost of new units comes on top.
It narrows the lender field and adds legal work, but it does not stop a deal. Crofting tenure needs a lender and a solicitor who handle it weekly, and decrofting, where it is the right route, takes time and should start before the application.
Some do. Some decline island postcodes entirely, some look at the larger islands only, and a few genuinely like strong destination sites and price them fairly. Matching the site to the lender that actually completes on your postcode is the first job.
Send us the site, the price or value, how many pitches and units, what you want to add and one line on the trade. One working day to an honest view on the structure and whether it funds.