SBA 7(a) Hotel Feasibility Study in Utah

Utah hotels: credit unions, counties and large tickets

Utah's hotels and motels were approved for 83 loans under SBA 7(a), worth $176.7 million, from FY2017 to FY2026. Typical size is $1.7 million at the median, 0.78x the nationwide reading, with a central band from $561,250 to $3.6 million. Franchise flags sit on 48.2% of loans. On a state-by-state table Utah is 30, and hotels are 10 of 39 classes at home. Salt Lake County has 13 loans, Washington County 8, Garfield and San Juan 7 each, Weber 6, and Davis, Iron and Wayne 5 each.

Holders

Mountain America FCU leads with 13 loans worth $24.4 million. Behind it, 5 loans each sit with State Bank of Southern Utah ($1.5 million) and with America First Federal Credit Union ($16.3 million). Two credit unions are among the top holders. These entries record the holder SBA shows today and carry no view of anyone's practices. Approvals peaked at 15 loans and $32.3 million in FY2018, reached $36.1 million on 9 loans in FY2021, then thinned to 3 loans and $5.5 million in FY2023, and to a single loan of $773,000 in FY2026.

Outcomes

At least 7.9% of approvals through FY2024 fell to cancellation, and counting undisbursed loans adds nothing. No charge-off appears among the 55 loans funded early: 0.00% today, 0.00% at five years. Open loans keep these as minimums.

Hotels and motels share one industry code, which leaves Utah's record unable to split select-service inns from full-service resorts; a project should name its own category.

A study for a Utah hotel has to build demand from the generators nearest the site. Seasonality should be tested, so monthly occupancy and room rates should come from comparable properties, shoulder seasons shown explicitly. Franchise fees, brand standards and any required improvement plan belong in the budget. Coverage should be tested at lower occupancy and rate, and the debt service must be met in the weakest quarter's cash flow or through reserves. Appraisal of the hotel will treat it as a going concern, so projections should reconcile with the income approach. Smaller properties need a rigorous demand case. Approval is not implied.