SBA 504 Hotel Feasibility Study in Utah

Utah hotels under 504: franchised, mid-sized, and tourism-driven

Utah hotels and motels account for 82 SBA 504 loans approved between FY2017 and FY2026, worth $180.6 million, and the class stands 3 of 39 inside the state. By loan count Utah is 10 among states. The median loan is $2.0 million, 0.96x the nationwide 504 median, with an interquartile range of $992,000 to $2.9 million, and 56.1% of the loans carry a franchise. In the 504 structure a bank takes the first lien and a certified development company issues a debenture behind it. On our distinctness margin, no figure here separates Utah hotels from the parent records.

Washington County first

The geography is the notable feature: Washington County has 15 loans, ahead of Salt Lake County at 12, Cache at 7, and Duchesne and Garfield and Utah at 6 each. Of the loans, 64 sit with Mountain West Small Business Finance ($138.0 million) and 12 with Intermountain Business Lending, Inc. ($31.3 million). Dollars peaked in FY2025, with 21 loans and $60.2 million, and the earlier years ran between 3 and 10 loans.

For Utah hotel approvals dated FY2017 to FY2024 the cancellation floor is only 3.8%, but the ceiling is 11.3%, a gap showing that many loans were undisbursed when the data were taken and may yet fund or cancel. Among the 31 loans funded in the earlier cohort, no write-off is recorded, at 0.00% both to date and in five years. That is a thin cohort, and the rates are floors.

Testing a Utah lodging request

A single code spans both hotels and motels, so limited-service, full-service and roadside properties cannot be told apart in this record. A Utah study must state the product and test it against its own market. Demand drivers differ between a ski, park or highway location and a city-centre property, and occupancy and rate swing by season, so the study needs monthly projections and a plan for low months. With a franchise on more than half the loans, the brand's property improvement requirements, fees and reservation contribution belong in the projections. Because 504 lends against real estate, the appraisal must value the hotel as property, apart from the business and brand. The sponsor's record running a hotel under the same or a comparable flag deserves a section of its own, with the property improvement plan and its cost shown beside the purchase price.