SBA 504 Hotel Feasibility Study in Washington

The biggest hotel loans in this set

Lodging heads Washington's SBA 504 lending, 1 of 39, with 70 loans and $209.4 million gross; nationally the state is 16th for the pairing. The median is the metric that stands out: $3.1 million, or 1.49x the 504 median nationally, and most loans fall from $1.9 million to $4.0 million. Brands are on 61.4% of loans. Tickets of this size indicate new construction or acquisition of full-size properties, funded through the real estate side of the 504 structure.

Evergreen Business Capital holds 24 loans, Northwest Business Development Association 20, Ameritrust CDC 19, and Capital Matrix, Inc. 6. Holder counts here follow SBA's file and pass no verdict on any firm. King and Pierce counties each have 9 loans, Chelan and Snohomish 6, and Skagit, Spokane and Thurston 5. Chelan stands out as a smaller county among the leaders. Annual dollars ran from $8.7 million in FY2021 to $31.5 million in FY2019, with 7 loans and $24.6 million in FY2026.

Cancellation and a clean cohort

At least 8.6% of approvals through FY2024 were cancelled, and 12.1% when loans still undisbursed are added. None of the 34 funded loans appears charged off at the floor, today or by year five (0.00% twice). That is an empty record, which says nothing about the future. Neither measure separated the cell from Washington lending or hotels nationally.

Product, market and schedule

Because hotels and motels share a code, the franchise share and loan size here blend limited-service with full-service inns. A Washington study should specify the product, its brand, rooms and market: urban business travel, airport, tourism or resort. Seasonality and the group base affect occupancy, and the model should show a weak year beside the base case. Construction cost and entitlement timing need a schedule, because interest runs while the building is not open. Appraised value of the real estate, and what another operator might pay if the brand leaves, belongs next to the cost budget. The study should also say what share of the request is land and building and what share is furnishings, since a lender will treat them differently, and it should state which brand approvals and permits are already in hand.