Golf courses are considered special purpose commercial properties and are analyzed in the same manner as business loans as opposed to commercial mortgage loans.

In markets that are seasonal, and income is limited to perhaps seven months a year, local lenders may shy away from taking the risk.

Loan-to-value usually maxes out at 65%, so purchasers will need a 35% equity investment. The borrower must demonstrate they have enough operating capital to service the debt, with a good personal financial statement and resume. Debt coverage will have to be high, at least 1.5 to get a look by a lender.

Seasonality is a huge problem for northern golf course properties, while in year-round climates golf courses fail because of the golf course operator, not because of inadequate financing. Hence, experience and operator performance is vital.