SBA 7(a) Hotel Feasibility Study in Nebraska

Nebraska hotels: franchised and large

Hotels and motels in Nebraska are overwhelmingly flagged properties: the franchise share is 70.4%, and a $2.3 million median comes to 1.04x the nationwide 7(a) level. The central loans run widely, from $461,000 to $4.8 million, so the class mixes small independent motels with large new builds. The record holds 27 approvals worth $65.9 million. Nebraska ranks 42 among states by loan count, and hotels place 10 of 39 in the state. Our test for distinctness comes back empty.

Cities, years and gaps

Lancaster County has 7 loans, Douglas 5, Hall 4 and York 3, so Lincoln, Omaha and Grand Island carry the class, with the interstate corridor towns of York, Cheyenne, Buffalo and Keith adding single or double loans. Approvals fell to none in FY2018 and a single loan in several later years, but reached 7 loans and $14.8 million in FY2017, 4 loans and $15.1 million in FY2025 and 6 loans and $11.9 million in FY2026. No lender table is printed for this cell.

Nebraska hotels show no cancellation or charge-off result, the loans being few. No reader should convert the gap into zero.

What a Nebraska hotel study must prove

Since the lodging code lumps hotels with motels, limited service and full service blend in these totals; the study must define the product and its room count, and the amenities that justify its rate. The demand mix differs across the state: Lincoln and Omaha draw business and university visitors, while interstate towns depend on highway traffic and events. Competing properties, rate history and occupancy by month should be assembled for the exact submarket. Because flagged hotels dominate, the study should state brand fees, the property improvement plan and whether the franchisor has approved the site. Construction and renovation costs, furniture and equipment, and pre-opening costs are large, and under 7(a) the loan can include working capital, which should be sized with care. Coverage must hold in a weak year. The appraisal will separate real estate from brand and operating business, so the study should do the same and show how stabilised occupancy is reached, with a month-by-month schedule of rooms sold and a reserve for replacing furniture and fixtures.

The wide band from $461,000 to $4.8 million means a Nebraska hotel study cannot borrow assumptions from the average. It should specify the exact property type, the room count, the brand if any, and the investment per room, and compare those with sales of similar properties in the same part of the state.