Hotel Feasibility Study in Georgia

Hotels weigh heavily in Georgia SBA lending

Hotels carry far more weight in Georgia's SBA lending than in the nation's: the location quotient is 2.08x, hotels and motels rank 3 of 39 among Georgia's asset classes, and Georgia ranks 3 of 53 among states, on 717 loans and $1.84 billion from FY2017 to FY2026. At $2.4 million, the median loan is 1.12x the class median nationwide, and half of all Georgia hotel loans fall between $1.3 million and $3.7 million. Georgia's hotel loans are numerous and concentrated, and size, cancellation and loss are read here as plain figures.

Brands dominate. Franchised properties account for 77.1% of loans, so most loans go to flagged properties. SBA 7(a) carried 573 loans and SBA 504 carried 144. HomeTrust Bank holds 67 loans for $161.7 million, GBank 55 for $163.8 million, Embassy National Bank 54 for $98.1 million, Metro City Bank 38 for $95.7 million and PromiseOne Bank 35 for $78.1 million. The leading 504 lenders are Florida Business Development Corporation with 47 loans and $129.1 million and Capital Partners Certified Development Company with 37 loans and $103.7 million, followed by Georgia Certified Development Corporation, whose 15 loans total $50.5 million.

A clean loss record and a low cancellation floor

No hotel loan in the FY2017 to FY2021 disbursement group of 372 has a recorded charge-off: the floor reads 0.00% both to date and inside five years. Cancellations ran at 9.5% of the FY2017 to FY2024 approvals, with a 10.7% ceiling. That record is a floor on loans that are still outstanding. Lending peaked at 100 loans and $224.9 million in FY2021, slowed to 52 loans in FY2023, and stood at 53 loans and $178.0 million in FY2026, with dollars per loan holding up as counts fell.

What a Georgia hotel study must test

The lending map runs from Fulton with 66 loans and Chatham with 60 to DeKalb with 39, Cobb with 38 and Gwinnett with 35, with coastal Glynn and Camden at 23 and 21. Each of those is a different lodging market, and demand has to be built by segment, from the comp set's occupancy and rate, new supply under construction and the demand generators near the site. Cost includes construction or the franchisor's required renovation. Debt service coverage should be tested on revenue per available room at a weaker point in the cycle, not at the peak. The appraisal must separate real estate, furniture and equipment, and going-concern value. A caution on the source: lodging carries one industry code, so motels sit in the same counts as hotels and service level cannot be read from the files.