Asset or Share Purchase: Which Structure is Best?
Before looking into financing options, you must first decide whether to acquire the business assets or buy the shares of the company operating the campsite.
A share purchase involves acquiring the entire operating company, including its debts and liabilities. This is a simpler legal route but poses higher financial risks and is less favoured by banks due to the lack of physical guarantees.
An asset purchase, on the other hand, means buying only what the business owns—tangible assets like land and buildings, and intangible ones such as the business goodwill. This is generally preferred by banks as it allows for a mortgage to be secured on the property, providing stronger collateral.
How Much Deposit Do You Need?
The size of your personal contribution is crucial—not only to secure bank funding, but also to build seller confidence. Sellers are unlikely to engage with buyers who lack a sufficient down payment, especially given the popularity of campsite investments in recent years.
On average, buyers are expected to contribute 40% to 45% of the total purchase price from personal funds. This ratio may increase for smaller, less profitable campsites where loan repayments are harder to cover.
Conversely, when purchasing larger, more profitable campsites (with annual turnover exceeding £450,000), sellers may accept a lower deposit requirement.
Banks assess the buyer’s experience, business plan, and overall project feasibility. However, personal contributions below £250,000–£350,000 often make financing unrealistic without additional collateral or investor support.
Main Financing Options for Buying a Campsite
The most common route is through a bank loan, though the terms vary based on the deal structure:
- Asset-only purchases (goodwill or business only): Typically funded over 7 years.
- Freehold + business combined: May be financed together, or split through a property holding company (e.g. an SPV or LLP for the land). In this case, the business portion is funded with your deposit, and the property is mortgaged.
- Typical mortgage term: 15 years for freehold acquisition.
- Share purchases: Banks may finance these over 7–10 years, sometimes up to 12 years depending on the perceived risk and security available.
Besides banks, buyers may also seek funding from regional investment funds, private investors, or venture capital firms. However, these options tend to be more expensive than traditional bank loans and may involve giving up equity or management control.
To maximise your success, prepare a robust business plan, include realistic cashflow projections, and demonstrate sector knowledge—these are essential for gaining lender confidence in the UK hospitality and leisure property market.