SBA loans for bed-and-breakfast inns

What lenders check

Each lender sets its own checklist. SBA sets the basic eligibility tests.

A lender reviewing a loan to bed-and-breakfast inns looks at the business's numbers and these items for the trade:

• Local zoning and lodging permits, since towns often cap rooms, guests and signs at inns in residential neighborhoods
• Health department rules for serving breakfast, which vary by state and can limit the menu or require a licensed kitchen
• Bookings by season, direct versus online travel sites, and guest review scores, plus tax records that separate inn income from the owners' household

Common uses of the money

Businesses like these use SBA loans for:

• Buying an inn with its antiques, linens, guest list and online review history
• Restoring porches, roofs, plumbing and period details on an older building
• Adding rooms with private baths, a commercial kitchen, or a barn or garden for weddings and events

Collateral

The building and land carry the value, often an older or converted home appraised partly as the owners' residence, with furnishings adding little.

How much they borrow

36% of these loans were $500,000 or less, the range where SBA Express is available.

The median loan was $900,000, larger than the $150,300 median for all SBA 7(a) loans. Half of the loans fell between $225,000 and $1.7 million. The most common size band was $500,001 to $1,000,000.

By business age, 47.5% had operated for more than 2 years and 15% for 2 years or less. 21% were startups opening with the loan, and 16% paid for a change of ownership.

How the money comes

18% of the loans went through SBA Express and 11.5% were lines of credit. The median term was 25 years.

Across all industries, 36% of loans went through SBA Express and 28% were lines of credit. Express counts here include Export Express.

The median term of 25 years (300 months) fits real estate. For real estate, SBA's maximum term is 25 years, plus any reasonable construction or renovation period. Source: SOP 50 10 8.1: App. 17, Para. A.3 (p. 390); 13 CFR § 120.212(c).

Where the loans are

California had the most loans from October 2019 to June 2026, 23 of 219 (11%).

Location is the state of the business, not of the lender.

Compare every state on SBA loans by state.

How often these loans went bad

Fewer than 5 of 133 seasoned loans were charged off, against 3.6% of all SBA 7(a) loans.

Fewer than 5 of the 133 loans approved October 1, 2019 to September 30, 2022 were charged offcharged offThe lender wrote the loan off as a loss because it was not being repaid. by June 30, 2026. We show no rate, because a rate beside a group of known size would give the count away.

SBA size standard

NAICS 721191 has its own size standard.

For NAICS 721191, SBA's size standard is $9 million in average annual receipts. A business at or under the standard is small for SBA's purposes. To qualify, a business must fit the size standard for the applicant's primary industry in 13 CFR 121.201, measured in annual receipts or employees. SBA measures size on the date the application is accepted for SBA processing, or for delegated loans the date the lender approves the loan.

A business over the standard can still qualify under the alternative standard: tangible net worth of $20 million or less and average net income after federal income taxes of $6.5 million or less over the prior two fiscal years. Source: SOP 50 10 8.1: Sec. A, Ch. 1, Para. D.1 (p. 14); Sec. A, Ch. 1, Para. D.2 (p. 14); 13 CFR § 121.301(b)(2).