SBA Lending Helping to Fuel Hospitality Industry
Jan 8, 2015

Access to capital in the United States has helped small businesses, including hotels and motels, since the early days of the Great Depression, when loans were offered to help alleviate the crisis.

The hospitality industry has stayed true to its mission over the last century, and longer. When there were travelers seeking a safe and clean place to stay the night, innkeepers were there to provide that service—and even a hot meal. The only thing that’s changed from that equation today is who travels and why, and their demands and expectations.

Our hotels and motels help bolster neighborhood retail corridors, which help create jobs and economic growth. When a small hotel or motel is given a loan, often with the help of a commercial lender, it can mean a local economy gets a needed jump-start or a long-awaited boost. It gives a neighborhood the opportunity to attract new consumers.

This idea, the idea of getting an equal opportunity to develop our talents, is driving America’s economy. Access to capital, much of it via small business loans, is how small businesses employ one out of two workers in this country. We reward our country’s entrepreneurs who take risks by giving them access to capital and the risks pay off.

Small Business Administration loans are becoming a primary tool for hospitality businesses looking to grow and prosper. For example:

  • Middletown Hotel Management (MHM) is using such financing to build a new hotel and conference center that is expected to create up to 135 new full- and part-time jobs and will feature a full-service Holiday Inn with 130 rooms, an Event and Banquet Center that can entertain up to 650 guests, Johnny’s Italian Steakhouse restaurant (the “First in Ohio”), and a “Blue” Lounge. It will be an anchor for the township and a county tourism draw for years to come.
  • Our firm helped an underperforming hotel saddled by operating costs in an oil-rich Wyoming city. The prospective owners of the Ramada Plaza Riverside Hotel & Conference Center wanted to take full advantage of the economic boom taking place in Casper. We were able to provide an SBA Real Estate Advantage Loan (SBA 504) solution of $4.7 million.
  • In Rocky Point, Fla., AVANA Capital was able to structure an SBA 504 ‘Green Loan’ solution so the borrower could purchase the property without adding to his cumulative SBA eligibility limit, allowing him to purchase multiple properties under this loan program. The hotel is once again an integral component of the thriving Tampa business and tourism scene.
  • Everyday, hospitality entrepreneurs turn to lenders to help realize their dream. Whether it’s an owner wanting to expand and develop a property, or an entrepreneur trying to finance a motel, a small business loan can help a dreamer succeed.

    And right now is a great time for dreamers. The economy is adding jobs and more hospitality businesses are seeking to borrow money.

    In a speech given in May in Florida, SBA Administrator Maria Contreras-Sweet told the National Association of Guaranteed Government Lenders Annual Meeting:

    “Right now, the Mars Rover Curiosity is exploring the surface of another planet in our solar system designed, in part, by five small businesses that received SBA funding. We’re helping small businesses go to outer space, so I believe it’s time for the SBA to be as innovative as the companies we serve – to make it easier for borrowers to borrow and lenders to lend.”

    Contreras-Sweet’s outer space reference is in keeping with entrepreneurs dreaming big and taking risks. To borrow, well, cannibalize, a famous astronaut’s quote: if a hospitality business loan is one small step for an entrepreneur, it’s one giant step for the entrepreneur’s community.