SBA 7(a) Hotel Feasibility Study in New Jersey

Cape May and Atlantic carry the story

New Jersey's hotel and motel lending under the 7(a) program is a shore story. Of 143 approvals between FY2017 and FY2026, worth $295.4 million, Cape May County alone accounts for 36 and Atlantic for 24, with Burlington at 15, Camden at 13 and Monmouth at 9. That concentration, together with a median loan of $1.7 million at 0.76x of the nationwide 7(a) hotel median, is what this cell shows that the state's general record and the national hotel book do not. Lodging stands 12 of 39 within New Jersey's financed classes, and the state ranks 22 among states for this program and class. Half of all loans sit between $597,250 to $3.5 million, and 35.0% carry a franchise flag.

Lenders and what their holdings reveal

Hanover Community Bank stands out, holding 25 loans and $61.0 million. Sturdy Savings Bank follows with 12 loans and $14.6 million, Peapack Private Bank and Trust has 11 and $23.4 million, and the 9 loans at Fulton Bank, National Association total $27.3 million, whereas the same count at TD Bank, National Association totals just $410,000, so a holder count and a holder dollar total do not always move together. All of this comes from SBA's records of the current holder; it describes the book, not any bank's practices.

Cancellations and charge-offs

Cancellations took at least 13.6% of the early-period approvals, and the harsher ceiling that also writes off loans not yet paid out comes to the very same 13.6%. Of 81 loans that disbursed in the earlier five-year window, none shows a charge-off, a 0.00% reading both today and across the first five years. Open loans remain exposed, so read them as minimums, yet the record so far is clean.

Testing a New Jersey lodging project

A feasibility study for a 7(a) hotel loan in New Jersey has to settle the seasonality question first. A shore property earns most of its year in a short window, so the work must chart monthly occupancy and rate, debt service coverage in the off-season and a case for the shoulder months. Inland sites in Burlington, Camden or Morris depend instead on business, airport and regional travel, a different demand source needing its own evidence. Because loans here are smaller than the national median, the cost per key should be benchmarked against what comparable projects financed. Brand standards and fees belong in the budget for the franchised share. A data limit: lodging is filed under one heading for every service tier, so a boutique, select-service or full-service plan cannot be told apart, and none should lean on these averages alone.