SBA 7(a) Hotel Feasibility Study in Oregon

Oregon lodging that borrows less than the nation

Lodging in Oregon under 7(a) is defined by a lower ticket than the country sees. The median loan of $1.7 million is 0.78x the national 7(a) median for lodging, even though the state's 150 approvals over FY2017 to FY2026 come to $291.0 million and the class holds third place among Oregon's 39. The middle of the distribution spans $942,250 to $2.7 million. By count Oregon is 20th among states, so this is a middling market in volume with a lower ticket than most. Brands do figure in the file: 40.0% of loans carry a franchise.

Holders and places

SBA lists Readycap Lending, LLC and Columbia Bank at 15 loans each, though Readycap's $30.8 million dwarfs Columbia's $10.1 million. Celtic Bank Corporation holds 14 worth $37.1 million, the largest dollar total on the list. At 9 loans each are Commonwealth Business Bank ($23.8 million) and, with $13.3 million, United Midwest Savings Bank National Association. Geography is a tour of the coast and the interior rather than the Portland area: Jackson County leads with 25 loans, Lincoln follows with 14, Clatsop with 12, Douglas with 11, Lane with 10, Baker and Klamath with 8 each, while Multnomah has only 6. A sponsor weighing a Willamette Valley site and one on the coast are drawing on very different local precedent.

Cancellations and an unusually clean cohort

Between FY2017 and FY2024, cancellation after approval ran at a floor of 9.7%, rising to a ceiling of 10.5% once loans still undisbursed are included. Of the loans from the early years, 88 reached funding and carry 0.00% for charge-offs to date and for the five-year view alike. That is a floor, not a guarantee, because open loans have time left, and lodging tends to be tested by a downturn in travel. Yearly volume shows the swing, from 29 loans and $64.2 million in FY2017 to 20 and $43.2 million in FY2021 and 16 and $26.8 million in FY2026.

What an Oregon hotel study has to test

A study for an Oregon lodging loan under 7(a) must treat seasonality as a first-order issue. Lodging demand is rarely flat through the calendar, so monthly occupancy and rate have to be modeled through the weak season and debt service shown against the thin months, not the annual average. It should identify competing supply within the drive market, the brand's required property improvements, and renovation or acquisition cost relative to a ticket near $1.7 million. An appraiser will value the hotel as a going concern, so each revenue line in the forecast has to be defensible. On coding, SBA does not distinguish limited-service from full-service lodging, so this page speaks to hotels and motels as one group.