Hotel Feasibility Study in Vermont

Cancellations and small loans mark Vermont

Hotel lending here departs from the national record on two metrics at once. SBA approved 39 hotel and motel loans between FY2017 and FY2026, worth $51.6 million, with a median of $918,000 that is only 0.42x the national median for the class. Vermont cancelled at least 22.6% of hotel approvals made up to FY2024, and counting loans still undisbursed gives the same ceiling. Those two measures, median and cancellation, are the ones on which this cell stands apart from both Vermont lending overall and hotels nationally. The central half of loans lies between $352,500 and $1.8 million.

Rank and weight

Vermont ranks 46 of 53 for hotel loans, a low position that reflects the state's size, yet hotels are the third largest of the 39 asset classes in the state itself, and a location quotient of 1.09x puts them slightly above their national weight. Franchise loans are 17.9% of the cell.

A 504 market with one dominant company

Program use leans to 504, 24 loans against 15 for 7(a). The only development company to reach the table is Granite State Economic Development Corporation, carrying 15 loans and $26.3 million, a large part of the cell's dollars, and no 7(a) lender reaches the listing line. Bennington and Windham counties have 8 loans each, Rutland has 6 and Lamoille has 5. Dollars have grown lately: FY2025 recorded 8 loans and $17.7 million, FY2022 recorded 7 loans and $8.0 million, and FY2026 has none. No loss rate is shown for Vermont, whose early cohort is under 30 loans.

What a Vermont lodging study has to settle

Given that more than one approval in five has not funded, the study should show why this project will close. Occupancy and average rate must be modelled by month, because ski, foliage and summer seasons are separated by weak periods, and coverage has to hold across the whole year. Demand evidence should come from the town: attractions, event calendars, competing inns and short term rentals. Cost should be tied to a property of the size the median implies, probably an inn or small motel, with renovation scope, code compliance and furniture itemised. Franchise fees, if any, belong in the operating budget. The 504 structure ties the loan to real estate, so an appraisal on both income and replacement cost is a central document.

A coding limit

Hotels and motels share a single code, which means limited service and full service properties are pooled in this cell.