Hotel Feasibility Study in Rhode Island

Rhode Island hotel lending in SBA's files is small in count and brand-heavy in structure. Hotels and motels drew 31 approvals over the ten fiscal years, worth $63.6 million, which ranks the state only 47 of 53 for the class, though hotels still rank 9 of 39 among Rhode Island's asset classes. The location quotient is 0.58x and the median loan of $1.2 million is 0.56x the national hotel median, so the state is both a lighter user of the class and a smaller borrower within it. The middle half of loans runs from $777,500 to $3.2 million.

A brand-driven book

A franchise flag sits on 54.8% of the loans, so more than half of the state's hotel borrowers are financing under a brand. The program split leans to 504, with 18 loans under SBA 504 and 13 under SBA 7(a). Two certified development companies split the 504 table closely: New England Certified Development Corporation has 7 loans worth $12.4 million and Bay Colony Development Corporation has 6 worth $10.3 million. By county, Kent has 12 of the loans, Washington 9, Newport 5 and Providence 4, with Bristol 1.

Volatile year to year

The series jumps around. FY2017 had 6 loans and $5.8 million, FY2018 only 1 loan of $797,000, and FY2021 posted 4 loans worth $14.3 million. FY2025 had 5 loans and $10.3 million, and FY2026 closed with 3 loans at $7.6 million. For Rhode Island hotels the sample is below 30 loans, which is why Loan Analytics prints neither the cancellation floor nor the charge-off floor; that is a gap in the evidence, not a zero. SBA's data describe loans that lenders hold or held, and they say nothing about the practices of any named lender.

What a Rhode Island hotel study must establish

Hotels and motels sit under a single industry code, so a roadside inn reads the same as a resort property in this file. A study must therefore say which product is proposed and benchmark it against the right set of competitors. Demand is the heart of the work: the study has to build the room-night case from the actual generators near the site. With over half of borrowers using a franchise, the study should also test the brand's fees, property improvement plan and territorial protection against projected revenue. Debt service coverage should hold in the off-season, and the appraiser should capitalize stabilized net operating income instead of reaching for replacement cost.