Questions buyers ask
Who prepares a short-term rental feasibility study a bank will accept?
Loan Analytics writes it, under the signature of Daniel Smith, MAI. Its reader is the credit officer deciding the loan, not the investor, the guests or a listing platform, and that reader meets a particular gap with this asset: SBA's loan files hold no class for it. Searching those files for comparable loans, a lender finds two neighbouring classes instead. Hotels and motels are large and seasoned, with 8,942 approvals under 7(a) and 2,885 under 504 in FY2017 to FY2026. Residential lessors are small and fading, with 204 approvals under 7(a) and 11 under 504 over the same years. A study the lender can accept says at the outset that neither class describes a rental cluster, sets out which parts of each carry over and which do not, and then supplies the evidence the record lacks: the rates and monthly occupancy of the listings a guest would weigh against yours, the local rules on nightly letting, a cost budget for units, land and site work, and debt service coverage on stabilised income and in a lean season. It also hands the appraiser the operating figures that the two collateral values depend on. A study that quotes hotel statistics and stops there reads as borrowed authority; one that marks where the hotel record ends and the fieldwork begins gives the credit officer something to underwrite. Because the work serves the lender's decision, it reports the downside case beside the base case, and a reader who sees the slow months tested has reason to trust the rest of the projection.
Why does this page show hotel and residential landlord loans rather than short-term rental loans?
Because SBA records the industry of every borrower by code, and letting homes or cabins by the night has no code of its own in this data. The page reads the classes on either side instead, and each comes with limits the study has to respect. Hotels and motels are filed under a single shared code, which puts limited and full service properties in one count, and the 8,942 7(a) approvals worth $21.54 billion are, for the most part, staffed lodging businesses. Lessors of residential buildings are landlords; the page notes that build-to-rent housing, lacking a code of its own, shares this one, and the class holds 204 7(a) approvals worth $122.1 million. A rental business filed under any other industry is in neither total, so neither figure counts short-term rental lending; both are reference points. Which one fits is the first thing a credit officer settles, and the answer turns on how the cluster is run. Units priced, sold, cleaned and serviced by the night through the owner's own operation look like lodging, and the hotel medians of $2.2 million and $2.0 million, with the low hotel charge-off floors, are the comparison a borrower would choose. Houses held by an investor and handed to a manager look like a landlord's portfolio, and the lessor record, whose floors read 18.4% for cancellation and 4.3% for charge-off, is the comparison a lender will reach for. The study lays out the operating facts that decide which way the file leans, rather than assuming the answer the borrower prefers.
Can a short-term rental property get an SBA loan?
The record says it is rare, and rarer each year, for anything a lender reads as a landlord's business. SBA's programs exclude passive businesses, and SBA treats most landlords as passive, which is why the residential lessor class is so small: 204 approvals under 7(a) and 11 under 504 from FY2017 to FY2026. The yearly columns show the exclusion taking hold. 7(a) lessor approvals moved between 17 and 41 a year from FY2017 to FY2023, then dropped to 1 in FY2024 and 3 in FY2025 before 5 in FY2026; the 504 column reads 0 in each of those last years. A cabin owner who hires a manager to deal with guests is usually treated as passive. The hotel record shows what an operated lodging business can still do: 814 hotel approvals under 7(a) and 264 under 504 in FY2026 alone. Whether a given cluster qualifies is for the lender and SBA to decide, not the study, and nothing on this page settles it for an individual project. The study's part is to put in front of the lender the facts that the eligibility review turns on: who takes bookings and sets the nightly price, who cleans and maintains the units between stays, who the guests deal with during a stay, and what share of the projected income is earned from stays counted in nights rather than leases counted in months. Where those facts describe passive income property, the study is scoped for a conventional bank loan from the start, the route taken by the cabin cluster in the site's New York worked example.
What happened to SBA lending to residential landlords after FY2023?
It nearly stopped. Up to FY2023 the 7(a) lessor column shows a small but steady flow: 41 approvals in FY2017, 28 in FY2018, 19 in FY2019, 17 in FY2020, 37 in FY2021 worth $33.8 million, 24 in FY2022 and 29 in FY2023 worth $24.3 million. FY2024 then records 1 loan for $150,000, FY2025 3 loans for $195,000 and FY2026 5 loans for $322,300. The note beneath the table puts this down to SBA regarding most lessor businesses as passive, and so ineligible. Dollars show the break more sharply than counts. In FY2020, 17 loans carried $14.7 million; in FY2026, 5 loans together carried $322,300, less than the 504 lessor median of $461,000 for one loan. The lessor loans had also been growing before the break: FY2021's 37 approvals carried $33.8 million where FY2017's 41 carried $12.7 million. The 504 column was always slight, at most 5 loans for $5.0 million in FY2022 and 2 for $6.3 million in FY2023, and it is empty from FY2024. For a rental cluster this cuts two ways. The class's summary floors, 18.4% cancelled and 4.3% charged off, describe loans SBA has largely stopped making, so they tell a lender how residential lessor credit behaved, not what a new approval would face. And a borrower hoping to fit a cluster into that channel should not plan on it. Since FY2024 the record points to a conventional bank loan, and a study written for that lender's tests from its first page saves a rewrite when the SBA route proves closed.
How do loss and cancellation rates on hotel loans compare with those on residential landlord loans?
The residential lessor class is weaker on both. Its 7(a) cancellation floor, 18.4%, sits above both hotel cancellation floors, the 13.1% of 504 and the 8.8% of 7(a), and its 7(a) charge-off floor, 4.3%, stands far above the hotel floors of 0.99% and 0.55%. For the 504 lessor loans no rate can be shown: with 11 loans in the class, its cohorts fall short of the 30 a printed rate requires, and an unreported rate says nothing either way about how those loans fared. The hotel figures split by program in a telling way. 504 hotel approvals show the higher cancellation floor, 13.1% against 8.8%, yet 504 hotel loans that funded carry the lower charge-off floor, 0.55% against 0.99%. Failing to close and failing to pay are different risks, and the record keeps them apart. A rental cluster study answers each separately. On the cancellation side the lender asks whether the deal survives the months between approval and funding: the zoning and registration position, firm construction or purchase prices, an appraisal that supports the request, and equity in place. On the charge-off side it asks whether nightly income carries the debt once the units are open, through every season. A file that claims the hotel floors must show the cluster earns and runs like lodging. If it cannot, the lender will read it against the lessor floors, and the study then has to show what in the project's structure, reserves or equity keeps it clear of the outcomes those floors record.
What do this page's cancellation and charge-off floors actually measure?
Each is the lowest the rate can be, not an estimate of where it will settle. The cancellation floor takes approvals made from FY2017 to FY2024 and counts those cancelled; the charge-off floor takes loans disbursed from FY2017 to FY2021 and counts those written off so far. Loans that fail later are not yet in the count, so the true rates can only be equal or higher, and below 30 loans in a cohort the page withholds the rate. Those windows fall differently on the two classes. For hotels, the charge-off window closes with FY2021, the year 7(a) approvals peaked at 1,361 worth $3.32 billion, so loans from the busiest year of approvals have had the least time to show losses, and the 0.99% floor should be read as young. The same window takes in the 504 hotel low of 199 approvals, so the 504 floor of 0.55% leans toward that program's earlier, larger approval years, 372 in FY2017 and 272 in FY2018, which have had longest to season. For residential lessors, both windows cover the years when the class was still active, plus FY2024's 1 approval in the cancellation count, and they say nothing about the handful of loans since. A study cites these figures as floors, names the window behind each, and never presents a withheld rate as zero. A lender that sees the cohort years stated beside a rate reads the comparison as fair; one that finds them missing will look them up and wonder what else was left out.
How large are SBA loans in the classes closest to a short-term rental?
The two classes sit far apart. Hotel and motel approvals have medians of $2.2 million in 7(a) and $2.0 million in 504. A residential lessor loan has a median of $152,500 under 7(a) and $461,000 under 504, the latter on only 11 loans. A rental cluster's request may fall anywhere in the wide space between, and neither median describes it. That has a practical consequence for the study. A lender comparing the request with hotel loans sees a small loan for the class and may conclude the project lacks the scale of a staffed property; a lender comparing it with lessor loans sees a large loan for a landlord. The study states where the request sits against both medians and explains the distance from each in terms of the project: the number of units, their size and finish, the land, the site work and the furnishing that a hotel spreads over many rooms and a single rental home does not need. The hotel columns also show loan size moving inside the window. FY2026's 814 7(a) hotel approvals carried $2.33 billion, the same total that 1,037 approvals carried in FY2018, so recent hotel approvals carry more dollars apiece than those of FY2018. In 504 the pattern repeats: FY2022's 323 hotel approvals carried $757.7 million, more than FY2017's 372 at $751.6 million. On the lessor side the few recent approvals are small, 5 loans for $322,300 in FY2026. The middle ground a cluster occupies is unrecorded on both sides, and the study fills it with the project's own budget.
How has SBA 7(a) hotel lending moved since FY2017?
It has run through a peak, a slump and a partial recovery. Approvals stood at 1,128 for $2.28 billion in FY2017 and 1,037 for $2.33 billion in FY2018, eased to 889 and then 836 in FY2019 and FY2020, and jumped to 1,361 for $3.32 billion in FY2021, the high point of the window in both count and dollars. The next two years gave that back and more: 848 in FY2022, then 613 for $1.56 billion in FY2023, the low point on both measures. Since then the count has risen each year, to 652 in FY2024, 764 in FY2025 and 814 in FY2026, and dollars have come back faster than count: FY2026's $2.33 billion matches FY2018 and trails only FY2021, on fewer approvals than any year from FY2017 to FY2022. Two readings matter for a rental cluster offered as lodging. First, hotel credit through 7(a) is active and growing again, so a lender who accepts the cluster as an operating lodging business is working in a live segment, not a closed one. Second, the segment swings hard from year to year, and a lender reading this column will want to see the cluster's coverage hold when demand softens. The study's weak-season case is where that is shown: occupancy and nightly rates taken from the slowest months of comparable listings, expenses held at their full level, and coverage stated on that basis beside the stabilised one, so the credit officer can see both numbers on one page.
How has SBA 504 hotel lending moved, and does that route suit a rental cluster?
504 hotel approvals took a different path from 7(a). They fell every year from 372 in FY2017 to 199 worth $330.9 million in FY2021, the low of the window, in the same year that 7(a) hotel lending peaked. They then rose to 323 in FY2022, dipped to 268 in FY2023, and climbed to 349 worth $850.7 million in FY2024 and 382 worth $1.03 billion in FY2025, the largest total in the column and the only one printed in billions, before easing to 264 worth $739.6 million in FY2026. In this window, then, 504 hotel lending was at its weakest when 7(a) was at its strongest, and at its strongest while 7(a) was still rebuilding. For a cluster that runs as lodging, 504 has stayed a working channel, at a median of $2.0 million, close to the 7(a) median of $2.2 million. Two cautions follow from the page. The 504 hotel cancellation floor, 13.1%, is the higher of the two hotel programs, so a 504 cluster loan, above all one tied to construction, needs its budget, its permits and its equity settled early. And the 504 route is practically shut for a cluster read as a landlord's holding: the residential lessor class drew 11 504 loans in the whole window, none from FY2024 on. Which route fits is the lender's call; the study's task is to describe the operation clearly enough that the choice rests on facts rather than labels.
Which states have the most SBA hotel and motel loans?
Texas leads with 1,327 loans worth $3.73 billion, and California follows with 1,180 worth $3.06 billion; together they stand well apart from every other row, since Georgia, in third place, has 717 worth $1.84 billion. Florida (577 loans, $1.60 billion), North Carolina (522, $1.33 billion) and Ohio (472, $1.17 billion) complete the group of states whose hotel totals are printed in billions. Below them the table tightens into a band where Colorado has 366 loans, Washington 368, New York 369, Indiana 377 and Illinois 406, followed by Michigan 318, Pennsylvania 313 and South Carolina 303. For a rental cluster, the row for its state shows the lender how much operated lodging credit is already on local books, and so how much hotel evidence it can lean on. In the top rows the local hotel record is deep, and a cluster that claims to run like lodging will be held to that standard: rate, occupancy, staffing and reserves laid out as a hotel's would be. Lower down, where a state's hotel row is short, the lender has less to compare with, and the study itself must build more of the market case, from comparable listings and local rules rather than from a deep file of lodging loans. The state rows on this page give counts and dollars only, with no state median or floor; the state hotel pages linked beneath the table carry each state's own record, and the study reads the row for the cluster's state before it chooses how to frame the comparison.
Why do states with similar numbers of hotel loans show such different dollar totals?
The table shows the gaps without explaining them. Maine's 74 hotel loans total $75.7 million while Maryland's 75 total $232.9 million. New Hampshire and Montana each have 64, for $61.6 million and $123.5 million. Connecticut and Idaho each have 78, for $229.2 million and $169.5 million. Minnesota's 182 carry $227.3 million and New Jersey's 180 carry $390.1 million; Wisconsin's 254 carry $429.6 million and Virginia's 259 carry $685.5 million. One code covers both limited and full service lodging, so a row cannot show whether the property mix, land and building costs or the choice between 7(a) and 504 drives the difference. What the gaps do show is how far a rental cluster's request can sit from the local hotel norm. The page describes a rental cluster as smaller than most hotels. In states whose hotel lending runs to smaller sums for the count, such as Maine, New Hampshire, Vermont with 39 loans for $51.6 million, or South Dakota with 81 for $106.5 million against Nevada's 84 for $192.5 million, a cluster's request lies closer to the lodging loans local lenders already make, and the hotel comparison holds up better. In states where hotel dollars run high against the count, Maryland, Connecticut or New Jersey among them, the same request looks slight beside local hotel loans, and the lender may slide it toward the lessor side of the record. The study reads the state row and says which comparison the cluster can honestly claim.
What if my rental cluster is in a state missing from the table or near its foot?
Alaska, Delaware and Hawaii are absent from the table, and its foot holds Puerto Rico (27 loans and $25.3 million), Rhode Island (31 loans and $63.6 million), Vermont (39 loans and $51.6 million) and North Dakota (47 loans and $98.2 million). The links to state hotel pages stop at Vermont, so Rhode Island and Puerto Rico have no linked state hotel page. In these places the state's hotel row is short or missing, too slight a base to set a cluster against, and a study that tries will mislead. The national record does the work instead: the hotel medians ($2.2 million for 7(a), $2.0 million for 504), the cancellation floors of 8.8% and 13.1%, the charge-off floors of 0.99% and 0.55%, and the residential lessor figures for the passive case. The rest of the evidence has to come from the ground: the listings a guest would compare, their nightly rates and occupancy by month, the count of competing units, the local rules on nightly use, and the costs a builder in that place will actually quote. Absence from the table is not evidence of a weak market, and a short row is not evidence of a strong one. It means only that the state's SBA hotel record cannot stand in for the cluster's own evidence. In such a state the study makes the market case from the cluster's surroundings rather than from loan files, and the scope reflects that fieldwork.
How does New York's hotel record bear on the cabin cluster in the site's worked example?
New York sits in the crowded middle of the hotel table with 369 loans worth $866.3 million, just below Indiana's 377 worth $867.3 million and just above Washington's 368 worth $989.3 million. Among the states that border it, New York leads: Pennsylvania has 313 hotel loans worth $775.0 million, New Jersey 180 worth $390.1 million, and the New England neighbours fewer still, Massachusetts 107, Connecticut 78 and Vermont 39. New York's hotel record is therefore deep enough to show a lender what a staffed property looks like on paper. Even so, the cluster in the worked example is financed through a community bank's construction-to-permanent loan on conventional terms, not through SBA. That fits the pattern on this page: a cluster owned by an investor and run by a manager reads as income property, and the residential lessor channel through SBA had all but closed by the record's last years. A construction-to-permanent loan also asks two things of the study at once. The construction phase needs a budget for land, units, furnishing and site work that the bank can draw against, with the local rules confirmed before the first draw. The permanent phase needs stabilised income after a ramp, coverage in a lean season, and the two collateral values, as rentals and as houses. The worked example sets out the study a lender would read for that New York project; a study for another cluster follows the same order on its own facts and its own state's row.
What will my lender want a short-term rental feasibility study to show?
Four things, in an order set by the risks this page records. First, the right to operate: whether the units may be let by the night under current registration, cap and zoning rules, and what a change by the town board would do, because on land zoned for houses a single vote can end the income. Second, demand: nightly rates, occupancy month by month, review scores and the number of competing units, drawn from the listings a guest would actually compare, not from hotel averages. Third, cost and expenses: land, construction or purchase, furniture, site work and the opening ramp, with cleaning, management, platform commission and lodging tax carried as the expenses they are. Fourth, coverage and collateral: debt service tested on stabilised income and again in a lean season, and the two values the appraiser must reach. The record sets the tone of each test. A file read against the hotel class meets a 7(a) cancellation floor of 8.8% and a charge-off floor of 0.99%; a file read against the residential lessor class meets 18.4% and 4.3%. The lender will ask which comparison the study claims and why, so the study names it and shows the operating facts behind it. Conventional terms often mean a larger equity share and a shorter amortisation schedule than SBA terms, so the coverage test is run on the terms the lender has actually proposed, not on terms the borrower hopes for.
How does the study handle local rules that could end nightly renting?
It reads them before it projects a single night of income, because a rule change can take the income away and the record on this page shows what is left when it does. The study establishes whether the units may be let by the night where they stand, whether each needs a registration or permit and whether that permit passes to a buyer, whether a cap limits how many may operate, how the zoning classes the use, and what change is under discussion locally. Each answer is sourced to the rule itself. Then the study runs the fallback the lender will run. If nightly letting ends, the units become ordinary rentals or houses for sale, and the cluster moves from the operated side of this page to the passive side. That side is the residential lessor record: a 7(a) median of $152,500, a cancellation floor of 18.4%, a charge-off floor of 4.3%, and SBA approvals that fell to 1 in FY2024 and stood at 5 in FY2026. A cluster that loses its nightly permit, in other words, cannot count on refinancing into SBA residential credit; its exit is long-term rent or sale. The study states the income on long-term rents, sets it against debt service, and gives the appraiser the evidence for the house-sale value. A lender that sees the downside costed can size the loan to it, and the borrower learns before closing how much equity the fallback demands.
Why does the appraisal of a rental cluster need two values?
Because the lender has two ways to be repaid. The first is the cluster running as intended, and the value behind it is the one the units earn as nightly rentals on stabilised income. The second is the units sold or let on long leases if nightly renting stops, and the value behind it is what the cabins or cottages would fetch as houses. The hotel floors on this page, 0.99% under 7(a) and 0.55% under 504, describe loans to lodging businesses whose collateral is lodging. A rental cluster on land zoned for houses has a residential exit as well, and its lender will size the loan with that exit in view. The study supports both answers. For the income value it supplies the operating evidence: nightly rates and occupancy by month from comparable listings, the ramp from opening to a stabilised year, and expenses including cleaning, management, platform commission and lodging tax. For the residential value it reports the local rules that could force the change and the long-term rent the units would earn as ordinary rentals. The spread between the two values tells the lender how much of the loan rests on the right to rent by the night. A wide spread is likely to bring a request for more equity or a smaller loan, and the study lets the borrower see that before the appraisal arrives, while the structure can still be changed.
How much does a short-term rental feasibility study cost?
For prices, this answer relies only on the 2026 fee survey that Loan Analytics keeps on this site, a record of the ranges feasibility providers post, which labels those ranges directional and notes that the SBA does not fix or cap the fee. It sorts studies into three tiers. A standard special-purpose property studied at a single site falls in a band whose floor is $5,000 and whose ceiling is $12,500. Complex work, the tier covering multi-site studies, unusual concepts and construction delivered in phases, has a floor of $10,000 and a ceiling of $25,000 in the survey. For the USDA tier, meaning a study that a Business and Industry lender reads against 7 CFR Part 5001, the survey's low end is $7,500, and its high end, $18,750, is open above. The survey names no short-term rental tier, so the fit depends on the project. Buying an operating cluster on one parcel, with its own booking history and statements, sits closest to the first tier, because the demand case begins from the property's record. Building a cluster from bare land, especially in phases, carries the marks of the second: a construction budget to check, a ramp to build from comparable listings, and local rules to confirm before any income is counted. Homes spread across several sites, each with its own permit and its own competing listings, are multi-site work, which the survey also places in the complex tier. The survey names three things that move a price within its tier: scope, asset class and program. For a rental cluster, what moves the fee most is the number of units and sites, whether the project is built or bought, the state of the local rules, and whether the lender wants both appraisal values supported in the study. Loan Analytics quotes its own fee once the scope request describes the cluster.
How long does a short-term rental feasibility study take?
No set turnaround appears here: the time a cluster study needs is fixed by what the scope request reveals. Describe the project and give the lender's date, and the scope that comes back includes a timeline built around it, with the fee. Several things lengthen a rental cluster study in particular. A cluster still to be built has no booking history, so its ramp and its stabilised year are built from comparable listings rather than read from statements. Units on several sites each need their own rules checked and their own competing listings gathered. A local rule under review, a proposed cap or a zoning change, can hold back the conclusion until the position is known, because no lender should take a projection that a pending vote could erase. A construction-to-permanent loan adds a check of the build budget the bank will draw against. Going the other way, the purchase of a cluster already in operation, with a year or more of bookings, statements and tax filings, moves faster: the demand analysis begins with the cluster's own record, and the comparables only have to confirm it. By this page's floors, at least 8.8% of 7(a) and 13.1% of 504 hotel approvals, and 18.4% of 7(a) residential lessor approvals, were cancelled, which is a reason to begin early. Nothing on the page explains those cancellations, yet an early start leaves time to settle a permit, reprice a budget or add equity before the lender's date comes round.
Besides the feasibility study, which reports will a lender order for a rental cluster, and at what cost?
The study is one of several reports in a lender's file, and the site's 2026 survey of published fees prices the others too. The appraisal matters most for a rental cluster, because it has to reach both values, as an operating rental and as houses: the survey prices a standard commercial appraisal between $2,500 and $7,500, and going-concern work on special-purpose property between $5,000 and $15,000. Environmental screening, a questionnaire plus a records search, costs between $300 and $1,500; if the search calls for a Phase I site assessment, that adds $2,000 to $5,000. Recording, title work and the survey add $2,000 to $5,000 between them. When a cluster changes hands as an operating business rather than as land and buildings, an independent business valuation, which the survey ties to SBA changes of ownership, runs $1,800 to $7,000, and a quality of earnings report, lender practice until SOP 50 10 8.1 makes it a requirement when a business sells for $3 million or more, is priced at $10,000 to $30,000. The survey also quotes a lender's closing guide: on an SBA acquisition, third-party reports and closing costs usually total $12,000 to $25,000 before the guaranty fee. For a rental cluster the study feeds the appraisal directly. The appraiser needs the cluster's stabilised income and its full expense load to reach the income value, and the local rules and long-term rents to reach the residential one. Ordering the study first, or alongside the appraisal, lets the appraiser work from the same figures the lender will test, so the two reports reach the credit officer telling one story.
Which loans and lenders finance short-term rentals, going by this record?
This page names no lender for either class; it carries counts, dollars, medians and floors, not a lender table. What it does show is which channels are open and how wide. The hotel channel is open under both SBA programs in every year of the window, with 814 7(a) and 264 504 hotel approvals in FY2026 and medians of $2.2 million and $2.0 million. The residential lessor channel is barely open: 5 7(a) approvals and no 504 approval in FY2026. The worked example on this site follows a third route, a community bank's conventional construction-to-permanent loan, made for a managed cabin cluster owned by an investor in New York. Taken together, the record sorts rental clusters by how they run. A cluster operated as a lodging business, with its own guest service and pricing, can be put before a lender that makes SBA hotel loans, and the study is then written to sit beside that lender's hotel files. A cluster held by an investor and run by a hired manager is more likely to be financed as income property by a bank on its own terms, and the study is written to that bank's underwriting: equity, amortisation, coverage and the residential fallback. One study can serve either reader if the operating facts are set out plainly, but the comparison it leads with should match the lender in the file. Name the lender and the loan under discussion in the scope request, and the study is framed for that reader from its first page.