SBA 7(a) Hotel Feasibility Study in North Carolina

One lender, a very large share of the dollars

North Carolina takes fourth place for hotel and motel loans under the program, by count, and sits third of 39 in its own class list. Its 444 loans over FY2017 to FY2026 total $1.13 billion in gross dollars. The standout fact is GBank, which holds 150 loans worth $470.7 million, a block that dwarfs everyone else in the table. Franchise flags are on 76.1% of loans, and a median loan of $2.3 million is 1.06x the nationwide class median, and the interquartile band is $1.4 million to $3.6 million.

Other holders and counties

PromiseOne Bank holds 29 loans worth $48.5 million, Peoples Bank 23 worth $76.3 million, Centerstone SBA Lending, Inc. 14 worth $32.7 million and HomeTrust Bank 11 worth $31.6 million. SBA's table lists the present holder of each loan, so it describes holdings and not practices. Mecklenburg County has 36 loans, Guilford 30, Cumberland 28, Wake 19 and Forsyth 18. Haywood County, with 14, appears among the leaders too. Yearly approvals dropped to 26 in FY2023 and were 42 in FY2026.

The loss floors are low

Cancellation hit at least 7.6% of the approvals through FY2024, and the ceiling prints the same 7.6%, so loans awaiting disbursement make no difference. Of 224 loans in the funded cohort, 1.3% were charged off to date, and the measure over the first five years prints 0.00%. Treat both as floors. The hotel cycle can turn, and loans still open can fail.

One code, many hotel types

One code serves hotels and motels alike, so a roadside motel and a flagged select-service hotel look identical in these records, as do limited-service and full-service properties.

What a North Carolina hotel study must test

Under a general-purpose guarantee, the study should state what is financed: acquisition, a conversion, a new build or renovation required by the flag. It should measure demand generators, such as business travel, universities, medical centres, highway traffic and tourism in the mountains or on the coast, and test occupancy and average rate against rooms already open or coming. The brand's improvement plan and franchise terms belong in the cost and cash flow. With tickets in the millions, show payment coverage under a weaker occupancy case. Because hotels sell as operating businesses, the study should split the value of the land and building from the value of the operation.