Hotels and Motels: SBA business acquisition loan data
2,310 SBA 7(a) loans since FY2018 financed the purchase of an existing business classified as Hotels (except Casino Hotels) and Motels (NAICS 721110), totaling $6.5B. Median loan $2,621,250, 306% higher than the all-acquisition median. 75% of these deals were franchised units.
SBA acquisition counsel, nationwide. Free consultation.
The median SBA loan to buy hotels and motels was $2,621,250 across 2,310 acquisition loans (FY2018 to FY2026), 306% higher than the $645,250 median for all SBA-financed acquisitions. GBank, First Western SBLC, LLC d/b/a Peachtree Group and Open Bank made the most of them. Of 1,127 seasoned loans (FY2018 to FY2021), 0.8% were charged off, 77% lower than the 3.5% average for all SBA acquisition loans.
Reading this industry's numbers
- Deal size. The loan excludes the buyer's equity and any seller note and may include working capital. A loan request far above $4,100,000 would be in the top quarter of SBA acquisition loans in this industry.
- Share of all acquisitions. This industry is 4.7% of all SBA-financed business purchases, ranking #2 of 300 industries tracked.
- Geography. Texas leads with 268 loans; the top five states account for 37% of the industry's acquisitions.
- Jobs. Lenders reported 26,291 jobs supported across these loans, about 11.4 per acquisition, a rough proxy for the size of business changing hands.
Hotels and Motels acquisitions by year
| Fiscal year | Loans | Total approved | Median loan | |
|---|---|---|---|---|
| FY2018 | 234 | $614M | $2,450,000 | |
| FY2019 | 291 | $675M | $2,100,000 | |
| FY2020 | 247 | $643M | $2,400,000 | |
| FY2021 | 355 | $943M | $2,475,000 | |
| FY2022 | 274 | $787M | $2,597,500 | |
| FY2023 | 177 | $498M | $2,710,000 | |
| FY2024 | 244 | $761M | $2,907,500 | |
| FY2025 | 266 | $861M | $3,200,000 | |
| FY2026 | 222 | $722M | $3,195,750 |
How often do these acquisition loans fail?
Of the 1,127 Hotels and Motels acquisition loans approved from FY2018 to FY2021 (the seasoned cohort, every loan at least about five years old), 9 have been charged off by the SBA, a rate of 0.8% by loan count and 0.4% by dollars. 664 have already been paid in full.
For comparison, the charge-off rate across all SBA 7(a) acquisition loans in the same cohort is 3.5%, so Hotels and Motels is 77% lower than the acquisition-loan average. 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.
M&A counsel for SBA and franchise acquisitions. Free consultation.
Top states
| # | State | Loans | Share | Dollars | |
|---|---|---|---|---|---|
| 1 | Texas | 268 | 11.6% | $840M | |
| 2 | Georgia | 153 | 6.6% | $456M | |
| 3 | California | 150 | 6.5% | $509M | |
| 4 | North Carolina | 147 | 6.4% | $444M | |
| 5 | Ohio | 145 | 6.3% | $427M | |
| 6 | Illinois | 103 | 4.5% | $276M | |
| 7 | Florida | 97 | 4.2% | $322M | |
| 8 | Indiana | 90 | 3.9% | $259M | |
| 9 | Virginia | 88 | 3.8% | $251M | |
| 10 | South Carolina | 83 | 3.6% | $217M |
Most active lenders
| # | Lender | Loans | Share | Dollars | |
|---|---|---|---|---|---|
| 1 | GBank | 509 | 22.0% | $1.6B | |
| 2 | First Western SBLC, LLC d/b/a Peachtree Group | 167 | 7.2% | $369M | |
| 3 | Open Bank | 114 | 4.9% | $369M | |
| 4 | Celtic Bank Corporation | 85 | 3.7% | $231M | |
| 5 | United Midwest Savings Bank National Association | 76 | 3.3% | $191M | |
| 6 | Shoreham Bank | 67 | 2.9% | $229M | |
| 7 | The Huntington National Bank | 64 | 2.8% | $174M | |
| 8 | US Metro Bank | 59 | 2.6% | $173M | |
| 9 | Bank of Hope | 56 | 2.4% | $169M | |
| 10 | Centerstone SBA Lending, Inc. | 49 | 2.1% | $126M |
Purchase agreement, escrow and consents. Free consultation.
Franchise brands in Hotels and Motels
75% of acquisition loans in this industry involved a franchised unit. Brands with the most SBA-financed resales:
| # | Brand | Loans | Share | Dollars | |
|---|---|---|---|---|---|
| 1 | Quality Inn | 187 | 10.7% | $575M | |
| 2 | Super 8 | 140 | 8.0% | $294M | |
| 3 | Days Inn | 128 | 7.4% | $320M | |
| 4 | Motel 6 | 116 | 6.7% | $322M | |
| 5 | Best Western | 109 | 6.3% | $377M | |
| 6 | Red Roof Inn | 102 | 5.9% | $289M | |
| 7 | Comfort Inn | 80 | 4.6% | $313M | |
| 8 | Baymont | 69 | 4.0% | $179M | |
| 9 | Econo Lodge | 67 | 3.9% | $115M | |
| 10 | La Quinta | 66 | 3.8% | $266M | |
| 11 | Rodeway Inn | 62 | 3.6% | $148M | |
| 12 | Sleep Inn | 54 | 3.1% | $190M | |
| 13 | Holiday Inn Express | 46 | 2.6% | $203M | |
| 14 | Country Inn and Suites by Radisson | 39 | 2.2% | $147M | |
| 15 | Travelodge | 35 | 2.0% | $80.6M |
Questions buyers ask
How much is a typical SBA loan to buy a business in Hotels and Motels?
Median $2,621,250 across 2,310 acquisition loans (FY2018 to FY2026); the middle half ran $1,644,250 to $4,100,000. That is 306% higher than the $645,250 median for all SBA-financed acquisitions.
Which lenders finance the most Hotels and Motels acquisitions?
GBank (509), First Western SBLC, LLC d/b/a Peachtree Group (167), Open Bank (114), Celtic Bank Corporation (85), United Midwest Savings Bank National Association (76).
Are businesses in Hotels and Motels often franchised?
Yes, often. 75% of SBA acquisition loans in this industry financed a franchised unit. Top brands: Quality Inn, Super 8, Days Inn, Motel 6, Best Western.
How risky are SBA loans for buying a business in Hotels and Motels?
Of 1,127 seasoned loans (FY2018 to FY2021), 0.8% charged off, 77% lower than the 3.5% benchmark for all SBA acquisition loans.
What loan terms are common for Hotels and Motels acquisitions?
Median term 25 years, average initial rate 7.11% at approval (blended across years and fixed/variable structures). Terms longer than 10 years usually indicate real estate was included in the purchase.
SBA 7(a) acquisitions, nationwide. Free consultation.
Advertise on this site: lenders, brokers, valuation and insurance firms. See options