Hotel Feasibility Study in South Carolina

Hotels are central to South Carolina's SBA book

South Carolina leans on hotel lending heavily. The location quotient is 2.47x, and hotels and motels hold rank 2 of 39 in South Carolina's own class table, while the state is only 14 of 53 by hotel loan count. South Carolina approved 303 hotel loans for $780.1 million over FY2017 to FY2026.

Measured against the distinctness margin, the cell is not an outlier: the South Carolina median loan of $2.5 million is 1.13x the national hotel median, and neither outcome floor separates the state's hotels from its all-asset lending and from hotels nationally by enough to count. The middle half ran from $1.4 million to $3.5 million. Franchise brands are on 79.9% of loans, so the typical deal is a flagged property and the franchise agreement is part of the collateral story.

A geography beyond the coast

Horry County, home to Myrtle Beach, holds 24 approvals, but Lexington and York hold 22 each, Orangeburg 21, Richland 20, Colleton 18, and Florence and Jasper 17 each, while Charleston and Greenville have 14. The pattern is broad rather than resort-led, which matters for how demand is measured. On the lender side GBank is the current holder of 60 loans worth $167.7 million, far ahead of PromiseOne Bank with 16, The Huntington National Bank with 15 and Peoples Bank with 14 worth $48.4 million. Provident Business Financial Services, Inc. leads the 504 side with 13 loans. SBA 7(a) carried 267 approvals and SBA 504 carried 36.

South Carolina hotel outcomes have been strong. Charge-offs among South Carolina's 166 hotel loans funded FY2017 to FY2021 are 1.2% at minimum, and 0.00% inside five years. For South Carolina hotel approvals of FY2017 to FY2024, cancellation sits between a floor of 9.8% and a ceiling of 10.2%. Volume has been uneven, from 45 approvals worth $122.0 million in FY2017 to 19 in FY2024 and 35 worth $108.8 million in FY2025.

What a South Carolina hotel study must test

Demand should be traced to the specific generator, whether highway traffic, a resort season, a university or an employer, since the approvals show every kind of location. Cost must include any property improvement plan the brand requires on a sale. Debt service coverage on a $2.5 million median loan should be tested at the market's own rate and occupancy history, and the appraisal must separate real estate, business value and the franchise. The class cannot separate limited-service from full-service properties, because one code covers hotels and motels.