SBA Sports Facility Loan | Complex Acquisition and Expansion

The facility had been operating well below its potential under prior ownership. Revenue streams that define successful sports complex operations: competitive tournament hosting, structured club programming, tiered memberships, ancillary food and beverage, had not been built out. The financial statements available for underwriting reflected that reality: limited historical performance that did not represent what the facility could produce under the right ownership and with the right capital investment behind it.

For a lender to approve 90% financing on this acquisition, the credit case had to be built entirely on projected forward performance. That requires a different quality of underwriting than a standard acquisition. Projections unsupported by documented market demand, competitive positioning, and a credible operating and CapEx plan do not survive credit committee review. Each assumption in the proforma needs to be traceable to a specific market condition, a comparable facility's performance, or a specific capital improvement with a defined revenue impact.

The CapEx plan was itself complex. Adding new volleyball and basketball courts was the cornerstone of the growth strategy: these courts would support expansion into youth and adult club programming, which drives both membership revenue and recurring facility utilization. But each capital item needed to be sized, documented, and justified within the SBA structure, and the connection between the investment and the revenue projection had to be explicit enough that a credit committee could follow the logic without gaps.

The lender selected for the transaction also created complications that extended the closing timeline beyond what was originally anticipated. Cornovus Capital managed those delays actively, keeping the transaction from stalling and the credit package current through an extended process.

• Limited historical financials required the entire credit case to be built on proforma performance projections supported by documented market and competitive analysis
• The prior owner had not developed tournament hosting, club programming, or structured membership tiers; the revenue model being underwritten had not yet existed at this facility
• CapEx including new volleyball and basketball courts needed to be justified within the credit structure with a direct, documented connection to projected revenue growth
• The borrower's operational knowledge and growth vision needed to be translated into a structured, lender-ready execution plan that could withstand credit committee scrutiny
• Lender-side process complications extended the closing timeline, requiring active management to keep the transaction on track

Cornovus Capital built the credit submission from the market level down. The engagement included the development of a working feasibility study, one of the core deliverables Cornovus Capital produces for transactions where historical financials cannot support a conventional underwriting analysis. The feasibility study documented demand for sports facility programming in the region: tournament activity, club participation trends, comparable facility performance, and the competitive set the acquired complex would be operating within. That documented foundation converted the proforma projections from assumptions into a defensible, market-anchored credit case that a lender could present to a credit committee with confidence.

The revenue model was built across every income stream: tournament hosting fees and event density projections, club membership tiers and enrollment assumptions grounded in regional participation data, ancillary food and beverage, and court rental programming. Each line in the proforma was supported by a documented rationale, and the assumptions were stress-tested against conservative scenarios so the credit committee could see the downside case as well as the growth case.

The CapEx plan was structured with equal rigor. The addition of new volleyball and basketball courts was presented not as a facility improvement but as a revenue infrastructure investment: specific court capacity, specific club programming that the courts would support, specific membership revenue attributable to the expanded programming, and specific timeline from construction to revenue generation. Every capital item was tied directly to a line in the proforma. The lender could follow the investment logic from dollar spent to dollar returned without inference.

When lender-side complications arose and extended the closing process, Cornovus Capital maintained active coordination with all parties, kept the credit package current, and managed the transaction through to closing without allowing the delays to create structural issues with the approval. The final package was comprehensive enough that the credit case remained intact regardless of how long the process ran.

• Developed a working feasibility study establishing the market basis for all revenue projections, converting proforma assumptions into a documented, market-anchored credit case
• Built a comprehensive market demand analysis covering tournament activity, club programming trends, and competitive set positioning for the region
• Developed revenue projections across tournament hosting, club memberships, court rentals, and ancillary income, each supported by documented market-level rationale
• Structured the CapEx plan around new volleyball and basketball court construction with direct, documented revenue connections for each capital item
• Translated the borrower's operational experience and growth vision into a structured, lender-ready execution plan that made the credit case self-contained and defensible
• Managed lender-side complications through an extended closing process, maintaining credit package integrity and transaction momentum
• Delivered a proforma-driven SBA sports facility loan submission that gave the credit committee everything needed to evaluate and approve the transaction

The $1,770,600 SBA 7(a) sports facility loan closed with 90% financing and a $190,000 equity injection from the borrower, structured over a 25-year fully amortizing term at Prime plus 2.75%. The borrower secured full ownership of the real estate and operating business, with capital deployed across all five components of the project: real estate acquisition, business acquisition, CapEx for court construction and facility improvements, equipment, and working capital.

The new volleyball and basketball courts provided the physical infrastructure for the club programming expansion the revenue model was built on. With ownership secured, the facility moved from a period of underutilization under prior ownership toward full operational capacity, with the tournament hosting, club membership, and ancillary revenue streams that had not previously existed at the complex now fundable, staffable, and operational.

• $1,770,600 SBA 7(a) facility closed on a proforma-driven credit case supported by a working feasibility study with no precedent revenue at the facility for the projected income streams
• 90% financing with $190,000 borrower equity injection representing 10.1% of total project cost
• 25-year fully amortizing structure at Prime plus 2.75%
• New volleyball and basketball courts funded through CapEx allocation, providing the infrastructure for club programming expansion
• Full capital stack deployed: real estate, business acquisition, court construction, equipment, and working capital
• Transaction closed through lender-side complications without credit structure compromise
• Facility positioned to generate tournament hosting, club membership, and ancillary revenue streams that were not operational under prior ownership

Additional financing outcomes are available in our Transaction Highlights archive.