A Wyoming boutique hotel — 28 rooms in a mountain resort community — was for sale at a price that made sense given its performance. The seller had strong trailing financials: occupancy averaging 68% annually, ADR above the market comp set, solid RevPAR. The property had a minor brand flag from a regional hospitality group and a loyal returning guest base built over 14 years of operation.
Two SBA lenders declined the application. Both cited the same concern: significant revenue variance between peak ski season (December–March) and shoulder months (May and October). One lender characterized the seasonal pattern as "insufficient year-round cash flow stability." The other simply passed without detailed explanation.
What neither lender had done was normalize the annual performance against industry standard methodologies for seasonal resort properties. In mountain resort markets, 65–70% annual occupancy with significant seasonal concentration is not a problem — it's the expected pattern for every property in the market. A lender who understands RevPAR analysis knows this immediately.
The buyer sought out a lender whose hospitality team had closed SBA deals on hotel properties in resort markets across the Mountain West. They immediately requested the STR STAR report — the competitive benchmarking data that shows how the property performs relative to its defined comp set. The hotel had outperformed its comp set on RevPAR for four of the past five years.
The specialist lender normalized annual cash flow using trailing 12-month averages — not peak-season snapshots or off-season troughs. This is standard methodology for seasonal properties; the generalist lenders simply hadn't applied it. The DSCR calculation using normalized cash flow came in comfortably above the 1.25x threshold required for approval.
The SBA 7(a) loan financed the acquisition with 10% down on the special-use property (the hotel qualified as an established special-use property, which requires the lower down payment versus a startup). The 25-year term was structured to match the hotel's useful economic life and maximize cash flow by extending amortization. The buyer closed 88 days after engaging the specialist lender.
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