SBA 504 Hotel Feasibility Study in Wisconsin

A single sponsor behind nearly every Wisconsin hotel 504 loan

The defining feature of Wisconsin's hotel lending under SBA 504 is how few institutions stand behind it. WBD, Inc. sponsored 81 of the 96 loans approved between FY2017 and FY2026 and $135.0 million of the $149.4 million total, while Racine County Economic Development Corporation accounts for 10 loans and $10.0 million. SBA's file of sponsors is the source of this table, which rates neither company. Wisconsin sits 7 among states by loan count, and lodging stands second of 39 among Wisconsin's financed classes, a high placing for the class.

Smaller than the national hotel loan

At $1.3 million the median is 0.64x of the nationwide 504 hotel median, and a typical hotel borrower sits between $704,250 and $2.1 million. Borrowers here are building or buying lodging of a more modest scale than the typical 504 hotel project elsewhere. Franchise affiliation is the norm, with 59.4% of loans flagged. Dane County records 10 loans, Milwaukee 8, and Door, Saint Croix and Walworth 5 each, with Columbia, Eau Claire, Racine and Sauk at 4, so no single county holds the book.

The floors

Cancellation is the soft spot: at least 14.5% of approvals made between FY2017 and FY2024 lapsed, and counting loans never paid out lifts the ceiling to 17.1%. By contrast, the 40 loans in the early funded cohort show no charge-offs, 0.00% by both measures. That is only a minimum, resting on a short list of loans that are not all fully seasoned.

What a Wisconsin hotel study has to test

Lodging in Wisconsin lives on seasons, so the study should lay out monthly occupancy and average rate across a full year, with the winter trough clearly visible, and show that debt service is covered in the weakest quarter. Demand sources differ by location: a leisure destination depends on visitors, an urban property on business, events and institutions, a roadside site on passing traffic. Each needs its own evidence, such as counts of competing rooms and nearby demand generators. Franchise fees, property improvement plans and reserves for replacement of furnishings belong in the budget. Since the loan rests on real estate, an appraisal must support the building and land as collateral. Given the cancellation ceiling, the borrower should also show readiness to meet each closing condition. One data caveat: every kind of lodging is filed under the same industry heading, so a select-service plan and a full-service plan look identical here.