Buying a SureStay franchise: SBA acquisition loan data
Since FY2018, SBA lenders have approved 22 7(a) loans to buy an existing SureStay (classified mostly as Hotels (except Casino Hotels) and Motels), totaling $66.2M. The median loan was $2,875,000, 346% higher than the $645,250 median for all SBA-financed acquisitions. 5 of these loans were approved in the last two fiscal years.
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What this tells a buyer
- Price range to expect. Loan size tracks purchase price. Half of SureStay resale loans landed between $2,065,750 and $4,133,750.
- Lender experience exists. GBank alone has financed 6 SureStay resales.
- Guaranty. The SBA guaranteed 76% of the dollars lent here.
- What the file leaves out. The SBA file does not record franchisor transfer terms or fees.
Financing a SureStay resale
The median SBA 7(a) loan for a SureStay resale was $2,875,000 across 22 loans (FY2018 to FY2026). GBank, Pinnacle Bank and Commonwealth Business Bank have financed the most SureStay resales. Too few of these loans are old enough to measure a charge-off rate; the average for all SBA acquisition loans is 3.5%.
SureStay acquisition loans by year
| Fiscal year | Loans | Total approved | Median loan | |
|---|---|---|---|---|
| FY2018 | 2 | $7.3M | $3,627,500 | |
| FY2019 | 3 | $7.8M | $2,323,000 | |
| FY2020 | 1 | $2.1M | $2,052,500 | |
| FY2021 | 2 | $5.6M | $2,778,250 | |
| FY2022 | 6 | $16M | $2,336,500 | |
| FY2023 | 3 | $13.9M | $4,633,000 | |
| FY2024 | 0 | $0 | - | |
| FY2025 | 3 | $7.5M | $1,800,000 | |
| FY2026 | 2 | $6M | $3,006,000 |
How often do these acquisition loans fail?
Fewer than 20 SureStay acquisition loans are old enough to measure losses reliably, so no charge-off rate is shown. The benchmark across all SBA acquisition loans in the FY2018 to FY2021 cohort is 3.5% by count. Non-acquisition 7(a) loans (every other stated purpose) approved FY2018 to FY2021 charged off at 6.2%.
"Charged off" is the SBA's final loss action on a defaulted loan after collection efforts. It lags default by a year or more, which is why only older cohorts are measured. It is not the same as a delinquency rate, and loans still outstanding can still fail. See charge-off in the glossary.
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Lenders financing SureStay resales
| # | Lender | Loans | Share | Dollars | |
|---|---|---|---|---|---|
| 1 | GBank | 6 | 27.3% | $17.1M | |
| 2 | Pinnacle Bank | 3 | 13.6% | $9.4M | |
| 3 | Commonwealth Business Bank | 2 | 9.1% | $6.7M | |
| 4 | Open Bank | 2 | 9.1% | $6.4M | |
| 5 | Celtic Bank Corporation | 2 | 9.1% | $6.4M | |
| 6 | First Western SBLC, LLC d/b/a Peachtree Group | 2 | 9.1% | $4.6M | |
| 7 | US Metro Bank | 1 | 4.5% | $4.2M | |
| 8 | Centerstone SBA Lending, Inc. | 1 | 4.5% | $4.1M | |
| 9 | Byline Bank | 1 | 4.5% | $3.5M | |
| 10 | First-Citizens Bank & Trust Company | 1 | 4.5% | $2.3M |
States where SureStay units are bought
| # | State | Loans | Share | Dollars | |
|---|---|---|---|---|---|
| 1 | California | 4 | 18.2% | $13.1M | |
| 2 | North Carolina | 4 | 18.2% | $12.5M | |
| 3 | Texas | 4 | 18.2% | $11.4M | |
| 4 | Indiana | 3 | 13.6% | $7.4M | |
| 5 | Washington | 1 | 4.5% | $4.3M | |
| 6 | New Mexico | 1 | 4.5% | $4.2M | |
| 7 | Colorado | 1 | 4.5% | $4.1M | |
| 8 | Kentucky | 1 | 4.5% | $3.2M | |
| 9 | Arkansas | 1 | 4.5% | $2.3M | |
| 10 | Arizona | 1 | 4.5% | $2.1M |
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Questions buyers ask
How much do buyers borrow to buy a SureStay franchise?
The median SBA 7(a) loan for a SureStay resale was $2,875,000 across 22 loans (FY2018 to FY2026). The middle half of loans ran from $2,065,750 to $4,133,750. The loan excludes the buyer's equity and any seller note and may include working capital, so the price is usually higher than the loan.
Which banks finance SureStay acquisitions?
GBank has made the most SBA acquisition loans for SureStay (6, 27% of the total). Pinnacle Bank, Commonwealth Business Bank, Open Bank follow.
What interest rate and term do SureStay acquisition loans carry?
The average initial rate at approval was 6.91% (a blend of fixed and variable loans across several rate environments, so treat it as context, not a quote). The median term was 25 years.
Is a SureStay resale riskier than other SBA-financed acquisitions?
Too few SureStay acquisition loans are old enough to measure. The benchmark for all SBA acquisition loans is 3.5% charged off in the FY2018 to FY2021 cohort.
Where are SureStay units being bought with SBA loans?
California (4), North Carolina (4), Texas (4), Indiana (3), Washington (1). State counts follow where the brand has units and where SBA lending is most active generally; see the state pages for the overall picture.
Seller note standby terms and third-party consents are reviewed before closing.
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Related
- All Hotels (except Casino Hotels) and Motels acquisitions
- California acquisitions
- North Carolina acquisitions
- Texas acquisitions
- GBank
- Pinnacle Bank
- Commonwealth Business Bank
- All franchise brands
Brand name as recorded by lenders in the SBA file: "SureStay - SureStay Studio" (franchise code S2322). Figures are aggregates of public SBA data and are not provided or endorsed by the franchisor.