SBA 504 IN ACTION ON MAIN STREET: HOSPITALITY INDUSTRY
Summer is right around the corner which means a lot of people are making plans to get away…and that includes finding a place to stay. If you are in that category and it seems like you have more hotel options than ever, you’re not wrong! Nationwide, the US Small Business Administration provided SBA 504 financing to nearly 600 hotel projects last year alone. This is no small feat because properties of this size usually have a very long lead time from concept to completion, with multiple moving parts along the way. Over the years, Bay Area Development has brought funding expertise and insight to several hospitality clients throughout California. Here is a snapshot of three recent projects.
A client who owns and operates a number of hotels throughout California came to us because he wanted to continue expanding his portfolio. He identified an existing Holiday Inn Express that was for sale in the North Bay and leveraged SBA 504 funding to purchase the property. The project resulted in a win-win because it preserved existing jobs at the hotel and allowed our client to achieve his company’s growth goals.
The SBA 504 program can also be used to finance ground up construction of brand new hotel properties. One of our Southern California-based clients did just that and built a 51,000+ square foot, 109-room Tru by Hilton filled with amenities for guests to enjoy. This project created a beautiful new hotel with an internationally recognized brand that the community can be proud of and brought 50 new jobs to the area as well.
In the “coming soon” category, we have a client who is just breaking ground on a SpringHill Suites in Yuba City, funded with an SBA 504 loan. Slated for completion in the fall of 2026, the 91-room hotel will bring an estimated 20 new jobs to the community as well as offer a centrally located home base to the region’s visitors. Consistent with the SpringHill Suites brand, the Yuba City location will offer a number of amenities and the owners have also chosen to incorporate solar energy to reduce its environmental impact.
Hospitality projects are exciting because they typically bring a high volume of new jobs into the community. Upon completion, hotels also generate additional revenue on an ongoing basis because they attract more visitors to an area, and more visitors means more money spent not just on lodging but on shopping, dining, and other leisure activities. It’s this kind of ripple effect that has a long-lasting, meaningful impact and that’s exactly why we are so proud to do the work we do. By delivering access to optimal funding, we power small business owners’ dreams so they can grow and achieve their goals.
