SBA 504 Hotel Feasibility Study in New York

New York hotels: franchise flags and a single development company

In New York, SBA 504 hotel and motel lending is both large and strikingly concentrated in who services it. Between FY2017 and FY2026 SBA approved 108 such loans, totalling $233.8 million, which ranks the state 5 among states by count and places hotels and motels 2 of 39 among New York's asset classes. The median loan is $1.7 million, a ratio of 0.82x to the 504 midpoint nationwide for the class, while the middle of the distribution spans $791,000 to $3.5 million. Franchised properties account for 45.4% of the loans, so nearly half of New York's borrowers operate under a brand. Those are the marks that set New York hotels apart from the full New York record and from hotel lending elsewhere.

A map of the Adirondacks and beyond

Warren County leads with 15 loans, Essex has 9, Onondaga 6, and Clinton, Niagara, Orange, Saratoga and Ulster 5 each, so the loans reach well beyond the largest cities. Because 504 packages couple a bank loan with a development company's second loan, the holders below are companies of that kind: Empire State Certified Development Corporation holds 97 loans worth $200.8 million, while Trenton Business Assistance Corporation holds 5 for $20.8 million. What the rows record is who services these loans today; they carry no statement of policy by anyone named.

Cancellations, losses and annual swings

The cancellation floor is 12.0% for approvals from FY2017 through FY2024, rising to 13.3% when undisbursed loans are added. Among the 42 hotel loans that funded in the early cohort, no loss has been recorded, the charge-off figure standing at 0.00% both now and at year five, a clean result that still counts as a floor because open loans can fail. Annual dollars bounce widely, from $39.0 million in FY2018 to $8.1 million in FY2021 and back to $39.1 million in FY2026, which warns against reading any single year as a trend.

Testing a New York hotel project

A single industry code covers every hotel and motel, which hides any split between select-service and full-service properties; the New York proposal has to define its own product, room count, amenities and flag. Demand work should use the specific destination: seasonal occupancy patterns, event and leisure drivers, competing properties within the market, and the supply that is under construction. With nearly half the borrowers franchised, the study needs the franchisor's fee schedule, property-improvement plan and brand standards laid against the budget. Cost estimates must include furniture, fixtures and equipment alongside the building, and the forecast has to show the loan payment covered through the low season. The appraisal of a hotel values a going business, so the study should lay out average rate and occupancy assumptions the appraiser can test. A request much above the middle half, which tops out at $3.5 million, should explain what drives the extra scale.