SBA 7(a) Hotel Feasibility Study in Idaho

Franchise flags and million-dollar tickets

Hotels dominate the dollars in Idaho's SBA 7(a) record even though the count is modest. Idaho's tally for FY2017 through FY2026 is 52 hotel and motel approvals and $120.7 million in gross dollars; the $2.0 million median defines the class and sits at 0.93x the national level. The middle half of loans extends from $868,875 to $4.0 million. Franchise brands appear on 63.5% of loans, meaning most Idaho hotel borrowers are buying into a flag. The state is 35 among states by number of loans, and hotels rank 11 of 39 among Idaho's own asset classes.

A front-loaded decade

Annual figures fall steeply after the early years. FY2017 and FY2018 each show 11 loans, at $28.0 million and $20.2 million, and FY2021 reaches 8 loans and $25.4 million. By contrast FY2023 and FY2025 each record a single loan, at $1.2 million and $1.5 million. FY2026 shows 3 loans and $8.6 million. A borrower should not assume today's market resembles the years that built the totals. Ada County has 9 loans, Bannock and Kootenai 8 each, Bonneville and Nez Perce 4 each, and Boundary, Canyon, Clearwater, Shoshone and Twin Falls 2 each, so lodging lending is spread across the state, not packed into one metro.

The lender and the outcome floors

Celtic Bank Corporation is the only lender listed, with 6 loans and $22.7 million, an average far above the median. SBA reports the institution that holds each loan now, so this identifies a holder and not a rule about whom it will finance. Idaho hotel approvals through FY2024 carry a cancellation floor of 12.5%; adding undisbursed loans leaves the ceiling unchanged at 12.5%. Of 32 hotel loans in the early disbursed group, no charge-offs appear to date (0.00%), and the within-five-years rate is 0.00% as well. With a cohort that small and lodging exposed to cycles, the reader should view both as floors.

What an Idaho hotel study has to test

The class mixes limited-service and full-service properties under one code, so a study must say which one is proposed and compare it with the correct competitive set. Demand is the main test: room nights from business travel, tourism, events and through traffic, with seasonality shown month by month, since Idaho's visitor flows are uneven. The study should set occupancy and average daily rate for the new property against operating peers and then test the margin after franchise fees and brand standards, which a flagged hotel must meet. Construction cost or purchase price must be reconciled with the appraised value, and debt service must be covered in a downturn case. Lenders reading it will want to know what happens if a flag is lost or a competing property opens nearby.