Hotel Feasibility Study in Indiana

Indiana hotel and motel loans stand out for how reliably they fund. For FY2017 to FY2024 approvals, the cancellation floor is 6.3% and the ceiling 7.0%, a rate lower than both Indiana's all-class figure and the national rate for the class. The state approved 377 loans worth $867.3 million from FY2017 to FY2026, ranking 8 of 53 among states, and hotels place 3 of 39 among classes in Indiana. The location quotient of 1.57x means Indiana leans on hotel lending far more heavily than the nation does.

No charge-offs in the measured cohort

Indiana has recorded no charge-off at all among its 207 hotel loans disbursed over FY2017 to FY2021: the floor is 0.00%, as is the five-year figure. That is a floor on a cohort still open, not a guarantee, but it is a clean record to date. Franchise units account for 78.8% of loans, so most Indiana SBA hotels are franchised.

Loan sizes and the lenders behind them

The Indiana median is $2.1 million, at 0.98x almost level with the class nationally, and half of Indiana loans fall between $1.3 million and $3.1 million. SBA 7(a) carries 316 loans and SBA 504 carries 61. GBank holds 65 of the 7(a) loans worth $201.9 million, ahead of Millennium Bank at 41 and Shoreham Bank at 38. Premier Capital Corporation and Indiana Statewide Certified Development Corporation lead 504 with 22 and 20 loans. GBank's count is the hotel loans SBA shows it holding now. Lending dipped to 17 approvals in FY2023 and returned to 40 and $110.9 million in FY2024.

What an Indiana hotel study must test

The questions below turn on the property. Demand has to be tested by segment in the specific market, and Marion County leads with 60 approvals, then Lake with 36, Allen with 26 and Elkhart and St Joseph with 25 each. Cost testing must cover the brand's property improvement plan on an acquisition or the full development budget on a new build. The debt service test belongs on a stabilized year net of brand fees, then on a weaker year for occupancy and rate. The appraisal has to separate real estate from business value. Indiana's figures also blend limited and full service, because one code holds both hotels and motels.