SBA 7(a) Hotel Feasibility Study in Mississippi

A hotel book defined by franchise flags and few cancellations

Mississippi hotel and motel lending under SBA 7(a) is led by flagged properties: 75.7% of loans carry a franchise affiliation. The state approved 136 loans from FY2017 to FY2026 for $292.2 million, ranking 25 among states, yet hotels place 2 of 39 among Mississippi's asset classes, which tells you how heavily the state's program activity leans on lodging. At $1.9 million, the median loan is 0.86x the nationwide figure, with the central loans ranging $1.3 million to $2.8 million. Our distinctness tests picked out the cancellation rate as the measure that sets this cell apart.

Cancellations, losses and why they matter

Only 1.8% of approvals through FY2024 were cancelled at least, and 2.7% when loans not yet disbursed are counted. Few approved hotel projects here fell away. Across the 74 early funded loans, the charge-off floor stands at 0.00% today and at 0.00% across the opening half-decade. A cautious reader will note that hospitality losses can arrive with a downturn that this window did not fully include, and that open loans keep every figure a floor.

Holders and geography

Peoples Bank carries the most, 34 loans worth $71.6 million on SBA's holder list, and GBank carries 18 worth $50.9 million. Readycap Lending, LLC holds 6 worth $12.0 million, and Customers Bank holds 5 worth $12.4 million. Those are holder entries only. Hinds County leads with 21 loans, Jackson County has 15, Harrison and Lee 11 each, and DeSoto 10. Yearly approvals peaked at 20 loans and $41.3 million in FY2019 and have been 10 loans and $15.5 million in FY2025.

One code covers hotels and motels alike, so this record cannot tell a select-service inn from a full-service resort; the study has to declare which kind the project is.

A study for a Mississippi hotel has to test demand from the specific generators around the site: highway traffic, casinos, the universities and the state government in Jackson, hospitals and industry. Occupancy and daily rate should be built from comparable properties rather than from statewide averages, with a franchise fee burden and any property improvement plan included in costs. Debt service coverage must hold under a lower occupancy case, and the appraisal will rely on a going-concern valuation of the hotel, so the study's projections need to agree with it. A seasoned flag adds distribution but also fees and brand standards.