SBA 7(a) Hotel Feasibility Study in Wisconsin

Lodging loans that run below the national median

Wisconsin lodging under SBA 7(a) comes to 158 loans and $280.3 million in gross dollars for FY2017 through FY2026. The state is 19th for this program and class, and hotels and motels hold the 8 of 39 position in Wisconsin's asset mix. The median is the one distinctive measure: $1.5 million, or 0.67x the national 7(a) median for hotels. Half of the loans sit between $356,900 and $2.6 million. Franchised properties account for 56.3% of loans, a majority but a slim one.

GBank tops the lender table with 16 loans and $41.6 million; Shoreham Bank is next with 15 loans and the larger total of $42.9 million. Millennium Bank has 8 loans and $20.5 million, IncredibleBank 6 and $8.5 million, The Stephenson National Bank and Trust 6 and $6.7 million. Read these as SBA's holder-of-record counts, not as evidence of any bank's appetite or terms. The county map is scattered for a lodging market: Milwaukee leads with 12 loans, Sheboygan follows at 10, and Brown, Jefferson and Kenosha each show 8. Dane County shows only 6.

Cancellations, charge-offs and the cycle

Cancelled approvals reach at least 9.5% in Wisconsin's hotel book for FY2017 through FY2024; the ceiling, which also counts loans still undisbursed, stays at 9.5%. In the cohort of 73 loans that funded in FY2017 to FY2021, the floor for charge-offs reads 0.00% today, and 0.00% again at the five-year mark. A floor of that kind says none had been recorded when SBA's file was cut, not that none will occur. Approvals swelled to 32 loans and $53.2 million in FY2021, shrank to 8 loans in FY2023, and came back to 19 in FY2025. A study should say whether its project is arriving in a high or a low year of approvals.

Testing a Wisconsin inn

Because hotels and motels share one NAICS code, limited-service and full-service inns merge in these figures, and the franchise share blends them. A study should therefore define the product itself: brand, room count and the demand segments that fill it. A study should also test seasonality, the group and corporate base, brand fees set against brand benefit, and any renovation the franchisor demands. Cost should be tested against a median under the national one. Debt service coverage belongs on an occupancy ramp with a downside case, because the appraisal values a going concern and revenue per available room has to withstand review.