SBA 7(a) Hotel Feasibility Study in Arizona

Arizona hotels: Navajo and Coconino alongside Maricopa

Arizona's hotel record is not a Phoenix story alone. Maricopa County leads with 46 loans, but Pima has 24, Navajo 23 and Coconino 22, then Mohave 14, Cochise 12, Pinal 10, Gila and Yavapai 8 each, and Yuma 5. Navajo and Coconino lie in the north, so the file reflects more than the metropolitan areas. The loans total $445.1 million over 180 approvals in FY2017 to FY2026, and Arizona ranks sixteenth among states on count, with hotels seventh on its list of 39 classes.

Sizes and brands

The median is $2.3 million, 1.04x the program's median for hotels nationally, and the middle half runs from $1.2 million to $3.7 million. Branded properties account for 62.2% of loans. Annual approvals ran from 21 in FY2017 and FY2018 to 31 in FY2021, then fell to 7 in FY2024 and recovered to 14 in FY2025 and FY2026.

Light losses in a cyclical sector

Lapsed approvals from FY2017 to FY2024 start at 11.2%, and that does not move if undisbursed loans are counted. Of 100 loans disbursed in FY2017 to FY2021, 1.0% stand written off today, and 0.00% inside five years. These are minimums, but low, and hotels remain cyclical.

Lenders and the coding limit

Poppy Bank holds 17 loans worth $48.9 million, Bank of Hope 14 worth $33.9 million, Celtic Bank Corporation 13 worth $27.8 million, Summit State Bank 12 worth $36.1 million and Open Bank 9 worth $31.9 million. The spread among five lenders is even, so no one bank sets the pattern for Arizona hotel credit, and a sponsor can compare several lenders with hotel experience. These are portfolios, and say nothing about how any lender decides. Arizona's record lumps limited-service and full-service properties together under one hotel and motel code.

What an Arizona hotel study has to test

A hotel study in Arizona must identify the demand drivers for the exact property: interstate traffic, gateway tourism, seasonal visitors, events in the metropolitan area or business travel. Seasonality can be sharp in Arizona, so the monthly cash flow tells more than a yearly total. Project occupancy, daily rate and revenue per room through a slow ramp, using the actual competitive set. Franchise fees and the required improvement plan come off income. Weigh the cost against a $2.3 million median, and justify anything near $3.7 million. Repayment must survive occupancy well below the stabilised case.