Data Center Feasibility Study and SBA Loan Data

Questions buyers ask

Who prepares a data center feasibility study for a bank or SBA lender?

A consultant independent of the borrower, the seller and the builder, so that the lender can rely on the report. Loan Analytics prepares data center and hosting business studies for lenders working under either SBA program, under a USDA Business and Industry guarantee or on conventional terms, and Daniel Smith, MAI signs every one. The work runs from the site's power outward to customers, competition, cost, coverage and value, and places the request in the SBA data center record on this page: 911 7(a) loans for $476.9 million and 50 504 loans for $41.6 million from FY2017 to FY2026.

What will my lender want to see in a data center feasibility study?

Evidence on the points where this class goes wrong. Power comes first: the capacity the utility can deliver to the site, when, at what cost, and the redundancy behind it. Demand comes next: signed contracts or letters of intent, their terms and churn, and the choices those customers have elsewhere. Cost must cover electrical and cooling plant, fire suppression, fiber and security, which together can cost more than the building shell. Debt service coverage is measured against signed revenue only, with the power bill either recharged to customers or hedged, and with money set aside to replace equipment. The appraisal separates the shell from its systems. Against a 6.9% charge-off floor for 7(a) loans in this class, a lender reads each part closely.

How much does a data center feasibility study cost?

The fee figures come from our own 2026 survey, published on this site, of what feasibility providers post. Its first band covers an SBA study of one site where the property is a standard special-purpose type, at $5,000 to $12,500. Its second covers complex assignments, such as phased construction, several sites or an unusual concept, at $10,000 to $25,000. For USDA lenders, a study done to 7 CFR Part 5001 sits in a band of its own, $7,500 to $18,750, with some studies above that. Data centers are not named in the survey. Studying an operating hosting firm at one location fits the first band; a ground-up colocation building whose power arrives in phases fits the survey's description of the second. Each study is quoted after scoping.

What moves the fee for a data center study up or down?

Our 2026 fee survey lists three things that move a study within its band: scope, asset class and program. For a data center, scope turns mostly on whether the business already operates. An operating hosting company with its own statements and customer list is shorter work than a ground-up building with no revenue, where the ramp from first power to filled racks has to be built from contracts and letters of intent. Phased power delivery adds work, because each phase needs its own capacity, cost and occupancy case. A study that must serve USDA as well as SBA is written to the longer USDA standard, which the survey lists at $7,500 to $18,750 or more.

How long does a data center feasibility study take?

We name the timeline when we answer the scope request, measured back from the date the lender needs the study, which the request form asks for. In a data center file the schedule depends less on the writing than on evidence from third parties: the utility's statement of available capacity and its delivery date, signed customer contracts or letters of intent, and current quotes for electrical, cooling and fire suppression equipment. A request that arrives with those documents moves faster than one that has to wait for them; the utility's answer on power is the piece no consultant controls.

Why are SBA data center loans so small when data centers cost so much to build?

Because the class is set by what the borrower does, not by the building it occupies. The code that places a loan here groups data processing and hosting companies with colocation buildings, and SBA's files do not let the two be told apart. Most of the record is therefore lending to operating firms: the 7(a) median is $200,000, its lower quartile $84,400, and 419 of the 911 7(a) loans were $150,000 or less. Larger, building-type borrowing is more likely among the 504 loans, with a $591,000 median, and among the 66 7(a) loans in the highest band the size table fills.

Which SBA program fits a data center or hosting loan better, 7(a) or 504?

This page shows how each program has been used, not which one suits a given project; that depends on the lender and the uses of the loan. From FY2017 to FY2026, 7(a) made 911 data center loans and 504 made 50, at medians of $200,000 and $591,000, and the 504 lower quartile of $323,250 sits above the 7(a) median. Cancellation was close in the two programs, at floors of 11.2% and 10.9%. Only 7(a) has a printed loss floor, 6.9%; 504 has too few loans in its cohort. Our study follows whichever of the two the lender chooses, and while the structure is undecided it can address both.

Does the SBA record include large wholesale or hyperscale data halls?

No. The size table's last, open-ended band holds 0 loans and $0 in both programs, so every data center approval from FY2017 to FY2026 fits below it. Because the class is keyed to what each borrower does for a living, a large wholesale hall financed outside SBA leaves no mark here, and a firm whose server room sits in its own offices is classed under its main business. The largest SBA data center loans sit in the highest band the table fills: 66 7(a) loans carrying $225.4 million, and 6 504 loans whose dollars are withheld. A study for a larger project stands on its own evidence.

How many SBA data center loans have been charged off?

Of the 7(a) data center loans that disbursed from FY2017 through FY2021, 6.9% is the charge-off floor to date, and 3.3% is the part of it that came in the first five years after funding, so losses in this class kept arriving after the fifth year. These are floors: they count losses recorded so far, and later losses can only raise them. For 504 no floor is printed, because fewer than 30 loans of that program fall in the cohort; a blank there means unknown, not zero. California, at 6.0% across both programs, is the only state with a printed floor. The study answers this record with a downside case on the borrower's contracts: the loss of the largest customer, a rise in power cost and an early equipment refresh.

How often is an approved data center loan cancelled before it funds?

At least 11.2% of 7(a) data center approvals and 10.9% of 504 approvals made in FY2017 to FY2024 were cancelled. The state floors spread widely: 17.4% in Texas, 14.9% in Florida, 8.2% in New York, 5.7% in California and 3.3% in Ohio. A cancellation means the lender approved the loan and it never funded. The study tests in advance the conditions a data center loan has to meet to close: a power delivery date the utility will confirm, equipment prices that hold, customer commitments that last until funding, and an equity contribution that matches the cost budget.

Which states see the most SBA data center lending?

California ranks first, 113 loans for $64.9 million; Texas second, 103 for $61.7 million; then New York, 66 for $17.5 million, and Florida, 65 for $42.6 million. Illinois and Ohio follow at 39 each, then Colorado at 32 and Maryland and New Jersey at 31. State medians range from $275,000 in Florida down to $102,800 in Minnesota. From Missouri, with 24 loans, down the table, states lack the loans to support a median or a floor, and for a project in one of them the study measures the request against the national quartiles and the project's own evidence.

Which banks make SBA loans to data center and hosting businesses?

From FY2017 to FY2026 the most active were Newtek Bank, National Association with 97 loans and $60.3 million; The Huntington National Bank with 67 and $22.6 million; Northeast Bank (ME) with 44 and $6.3 million; U.S. Bank, National Association, 43; Manufacturers and Traders Trust Company, also 43; BayFirst National Bank with 39; Wells Fargo Bank National Association with 34; TD Bank, National Association with 33; JPMorgan Chase Bank, National Association with 29; and Live Oak Banking Company with 26 loans and $40.0 million. No lender with fewer than 5 loans is listed. The spread in dollars shows which lenders take the larger requests.

Which metro areas see the most SBA data center loans?

New York-Newark-Jersey City leads with 67 loans and $24.1 million, then Dallas-Fort Worth-Arlington with 45, Chicago-Naperville-Elgin with 42, Washington-Arlington-Alexandria with 39, Los Angeles-Long Beach-Anaheim with 37, Miami-Fort Lauderdale-West Palm Beach with 30 and Austin-Round Rock-San Marcos with 27. Los Angeles carries the most dollars, $27.5 million, and Austin the highest median, $350,000, against $150,000 in the New York metro. No metro prints a charge-off floor, so a study in any of them uses the metro's loan sizes as the local comparison and the national floor for the downside.

Is SBA lending to data center businesses rising or falling?

It surged, then eased. 7(a) approvals reached 151 loans and $72.8 million in FY2024, the most loans and the largest printed dollar total in the class record, and 145 loans in FY2025, before falling to 87 in FY2026. The 504 side stayed thin throughout, with 1 approval in FY2026. Because the 6.9% charge-off floor covers only loans disbursed in FY2017 to FY2021, the surge years carry no loss record yet, and a lender reading a request now has no class history for that vintage to lean on, which places more weight on the borrower's own contracts and on the study that tests them.

How does the study show demand for a new colocation or hosting facility?

From customers, not from the size of the industry. The study lists the contracts and letters of intent in hand, with term, power draw, price and renewal dates, and the churn the operator has seen on contracts it already holds. It maps the other places those customers could go, both colocation space and cloud services, and what moving would cost them. It then builds the ramp from first power to full occupancy out of those commitments, and tests coverage at each stage. A lender reading a request in a class whose 7(a) charge-off floor is 6.9% looks for contracted revenue first.

How is a data center building valued for a loan?

The lender needs the shell valued on its own, for an owner who would not need the power and cooling plant, with the electrical, mechanical and cooling systems treated apart, since equipment of that kind loses value fast. The study's cost and market work is built to line up with that split: what the site and shell are worth to another user, and what the systems add while they remain current. For a 504 data center loan, where the median is $591,000 and the upper quartile $1.1 million, the shell value is the part of the collateral that outlasts the equipment.

Can a hosting company use a feasibility study to buy or build its own facility?

That is the rarer request in this class, and the one a lender examines most closely. The SBA record here is mostly lending to operating hosting and processing firms, at a 7(a) median of $200,000, while a company moving its racks into a building it owns brings a real estate case on top of an operating one, closer in kind to the larger 504 loans, whose median is $591,000. The study shows whether the building pays for itself under the firm's contracts: power capacity and redundancy at the new site, the cost of moving customers without losing them, the electrical and cooling fit-out, and coverage on contracted revenue, with the shell valued for an owner who would not run a data center.

My state shows no rate on this page. What does the study rely on instead?

This page prints a rate only for a cohort of 30 loans or more. California alone prints a state charge-off floor, and California, Texas, New York, Florida and Ohio print cancellation floors; from Missouri down, no state carries a median or any floor. A blank or not reported cell is never a zero and never a clean record. Where the state is thin, the study uses the national 7(a) floors of 11.2% and 6.9%, the metro row where one exists, and evidence gathered for the site: the utility's capacity statement, the colocation and cloud alternatives in the market, and the customers' own contracts.

Can the study be prepared for a USDA Business and Industry lender?

Yes. Loan Analytics prepares data center studies for USDA Business and Industry lenders as well as for SBA and conventional ones. The tables on this page are SBA records only and carry no USDA loans, so a study for a B&I lender draws its comparisons from the site, the power and the customers rather than from a USDA class history. For a USDA study, our 2026 fee survey records $7,500 to $18,750 and higher where the work is done to 7 CFR Part 5001. Tell us in the scope request which program the lender will use.