Hotel Feasibility Study in New Mexico

New Mexico's leading SBA class

No class draws more SBA loans in New Mexico than hotels. Lodging ranks 1 of 39 among New Mexico asset classes, and its location quotient of 3.22x measures how far lodging runs above its national share of SBA approvals in New Mexico. From FY2017 to FY2026 New Mexico approved 166 hotel and motel loans worth $364.8 million, placing New Mexico 24 of 53 for the class. The New Mexico median was $1.9 million, or 0.88x the national hotel median, and the quartiles run from $1.0 million to $3.2 million. On our test, the New Mexico median and its two floors do not separate from both the New Mexico all-asset book and hotels nationally by enough to count as distinct; the cell is defined instead by how much of New Mexico's SBA lending it absorbs.

Branded properties account for 68.7% of New Mexico hotel loans. Volume grew late in the period, with 25 approvals worth $49.9 million in FY2022 and 22 worth $63.1 million in FY2025.

Who finances New Mexico hotels

Western Commerce Bank is the leading holder, with 37 New Mexico hotel loans worth $48.2 million. Open Bank holds 12 worth $31.7 million, US Metro Bank 9 worth $24.7 million, and Shoreham Bank and Enterprise Bank & Trust 7 each. SBA 7(a) carries 140 approvals and SBA 504 26; the 504 side is split among B:Side Capital with 8, The Mortgage Capital Development Corporation with 6 and Enchantment Land Certified Development Company with 6.

The New Mexico closing record is clean: only 6.2% of New Mexico hotel approvals from the FY2017 to FY2024 years were cancelled at the floor, with a ceiling of 6.9%. Credit has been equally clean so far. The 76 New Mexico hotel loans disbursed over FY2017 to FY2021 have run up no charge-off so far, 0.00% to date with a five-year floor of 0.00%, figures that will rise only if loans still outstanding fail.

What a New Mexico hotel study must establish

The county list shows how dispersed New Mexico lodging lending is. Bernalillo holds 38 approvals, San Juan 12, and Dona Ana, Guadalupe, Lea and McKinley 9 each, followed by Lincoln at 8 and Santa Fe and Taos at 7, so the New Mexico record reaches well beyond Bernalillo. A feasibility study must model demand from the specific generators near the site, with seasonality and the brand's results in similar New Mexico markets, and set occupancy and rate against the competitive set. Cost should include the brand's improvement plan and furniture replacement reserve. The payment test must hold through the ramp and in a soft year, at loans as large as the New Mexico upper quartile of $3.2 million. The appraiser must separate the real estate from brand and business value. Because hotels and motels share one SBA code, the New Mexico figures blend limited-service motels with full-service hotels.