SBA Feasibility Study

    SBA Feasibility Study Consultant in Kentucky

    Kentucky SBA lenders and CDCs approved $310.1 million in 7(a) and 504 loans across 615 loans in fiscal year 2025 (October 1, 2024–September 30, 2025), a record year for the state, according to SBA FOIA loan-level data. Hotels and restaurants drew more SBA dollars than any other sector. We prepare independent, lender-ready feasibility studies for Kentucky hotels, distilleries, childcare centers, c-stores, car washes, self-storage and owner-occupied 504 projects, written to the current SBA rules in SOP 50 10 8.1.

    Prepared and signed by David Jones, MAI, CCIM, author of more than 4,300 feasibility studies.

    Request a fixed-fee proposalSee fees and delivery times

    $310.1M

    Kentucky SBA 7(a) + 504 approvals, FY2025

    SBA FOIA data (615 loans)

    6,680

    Jobs supported by Kentucky's FY2025 SBA approvals

    SBA FOIA data

    $76.7M

    Accommodation & food services, Kentucky's top SBA sector, FY2025

    SBA FOIA data (80 loans)

    93 of 120

    Kentucky counties more than 50% rural, Census 2020

    Kentucky Association of Counties, Nov. 26, 2024

    0%

    FY2027 upfront SBA fee on qualifying 7(a) loans of $700,000 or less

    SBA, effective Oct. 1, 2026

    4,606,864

    Kentucky population, July 1, 2025

    U.S. Census Bureau, Vintage 2025

    SOP 50 10 8.1FY2027 SBA feesMAI, CCIM4,300+ studiesAll 120 Kentucky counties

    Kentucky SBA lending at a glance

    Kentucky's 7(a) and 504 approvals rose from about $244.6 million in FY2024 to $310.1 million in FY2025 (615 loans, 6,680 jobs supported), per SBA FOIA loan-level data. That was about 0.69% of the record $44.8 billion SBA delivered nationally in FY2025 (84,400 loans: $37 billion in 7(a), $7.8 billion in 504), per SBA's September 30, 2025 release. In a December 12, 2025 release, SBA Kentucky District Director Robert Coffey described FY2025 as a record-setting year, with more than $312 million in SBA loans disbursed across the Commonwealth.

    The 504 program is underused in Kentucky. The SBA Kentucky District reported 29 504 loans totaling $23.6 million through seven CDCs in FY2024, against 519 7(a) loans totaling $217.1 million (Kentucky Today, Jan. 2, 2025). That put 504 at under 10% of Kentucky SBA dollars. Nationally, 504 was about 17% of SBA dollars in FY2025. For owner-occupied real estate, such as hotels, medical buildings, distilleries and childcare facilities, a 504 structure often lowers the equity requirement and fixes a long-term rate on the CDC portion.

    The SBA Kentucky District Office, at 600 Dr. Martin Luther King Jr. Place, Suite 188, Louisville, serves all 120 Kentucky counties. 504 CDCs active in Kentucky in SBA FOIA data include Capital Access Corporation (Louisville), Community Ventures (Lexington), Alloy Development Co. and the Purchase Area Development District. Community Trust Bank received the SBA Kentucky District's Gold Lender Award as the top-volume 7(a) community bank lender for FY2025, its 17th consecutive year, with 60 Kentucky 7(a) loans totaling $12,596,200 (Community Trust Bank release, Dec. 12, 2025).

    SBA FOIA loan-level data, FY2025 (Oct. 1, 2024–Sep. 30, 2025)
    SectorLoansApprovalsJobs supported
    Accommodation & food services80$76.7M1,332
    Health care & social assistance64$47.7M966
    Construction93$37.9M590
    Other services80$35.4M945
    Retail trade69$24.3M544
    Manufacturing35$19.4M506
    Wholesale trade19$14.0M316
    Professional services53$12.4M282
    Administrative services29$8.1M419
    Arts & entertainment23$7.5M155
    SBA FOIA loan-level data, FY2025
    CountyLoansApprovals
    Jefferson171$89.4M
    Fayette59$29.0M
    Oldham25$21.4M
    Kenton41$19.0M
    Hardin14$15.0M
    Daviess9$11.3M
    McCracken19$9.2M
    Boone22$8.1M
    Jessamine6$7.3M
    Warren25$7.0M

    Oldham's $21.4 million on 25 loans and Hardin's $15.0 million on 14 loans point to larger-ticket projects in the Louisville exurbs and the Elizabethtown–Fort Knox corridor.

    Kentucky had 393,860 small businesses in the SBA Office of Advocacy's 2025 state profile, 99.3% of all firms, employing 710,613 people (42.6% of private-sector employment).

    Current SBA rules that shape a Kentucky study

    Every study we deliver is written to the SBA rules in force today. SOP 50 10 8.1 was issued under SBA Information Notice 5000-880695 on August 14, 2026. It applies to 7(a) and 504 loans that receive an SBA loan number on or after October 1, 2026. FY2027 fees took effect October 1, 2026.

    FY2027 SBA fees

    For FY2027, SBA set a 0% upfront guaranty fee on 7(a) loans of $700,000 or less made to manufacturers (NAICS 31–33), listed food-supply-chain businesses and businesses in a rural area (SBA Information Notice 5000-881797, published Sept. 3, 2026). Other 7(a) loans with maturities over 12 months pay 2% of the guaranteed portion up to $150,000, 3% from $150,001 to $700,000, and 3.5% of the guaranteed portion up to $1 million plus 3.75% above that for loans from $700,001 to $5 million. The lender's annual service fee is 0.55% and cannot be passed to the borrower. On 504 loans, SBA waives both the upfront and annual fees for the same three categories. Other 504 loans pay a 0.50% upfront fee and a 0.203% annual service fee (SBA Information Notice 5000-881796).

    What "rural" means for Kentucky borrowers

    For FY2027 fee relief, SBA defines a rural area as a county the Census Bureau classifies as at least 30% rural. The Kentucky Association of Counties reports that 93 of Kentucky's 120 counties are more than 50% rural under Census 2020, and 54 are entirely rural, so at least 77.5% of Kentucky counties clear SBA's 30% test. Census 2020 urban and rural counts put these counties below 30% rural: Jefferson (1.6%), Fayette (2.9%), Kenton (6.7%), Boone (11.5%), Campbell (17.1%), Daviess (26.0%) and Warren (27.3%). Hardin (33.5%) and Madison (36.2%) qualify despite their growth. Every study we prepare confirms the project county against the Census County Classification Lookup Table, so you know whether the fee waiver applies before the lender quotes the deal.

    Change-of-ownership standards (SOP 50 10 8.1, Appendix 15)

    Transaction typeMinimum debt service coverageQuality of Earnings report
    Initial Acquisition1.25xRequired when the business purchase price is $3 million or more
    Business Expansion1.15xRequired when the business purchase price is $3 million or more
    Owner Buyout1.25xNot required
    ESOP or cooperative1.25xNot required

    Coverage is measured on the last fiscal year or the average of the last two years, using historical or adjusted historical results, not projections. SOP 50 10 8.1 also requires an independent business valuation on change-of-ownership loans.

    504 equity

    A standard 504 project needs 10% borrower equity (50/40/10). Equity rises to 15% for a new business (operating two years or less) or a limited- or special-purpose property, such as a hotel or a car wash, and to 20% when both apply (13 CFR 120.910).

    Other rules in force

    • Since March 1, 2026, SBA loan applicants must be 100% owned by U.S. citizens or U.S. nationals, with owners' principal residence in the United States or its territories (SBA Procedural Notice 5000-876626).
    • Since July 4, 2026, a borrower can combine up to $5 million in 7(a) and $5 million in 504 financing (SBA Policy Notice 5000-879058). SBA's guaranteed exposure per borrower stays capped at $3.75 million ($4.75 million for qualifying export loans).

    Kentucky capital that stacks with SBA

    KSBCI loan participation and collateral support

    KY Innovation, within the Kentucky Cabinet for Economic Development, manages Kentucky's $117 million State Small Business Credit Initiative (SSBCI 2.0) allocation, announced February 27, 2023. Thirty percent of it goes to loan participation and collateral support through participating lenders. Under the Kentucky Loan Participation Program, the state can buy up to 20% of a small business loan. Under the Kentucky Collateral Support Program, it can pledge cash collateral of up to 20% of the loan. As of June 30, 2026, KSBCI had 59 participating lenders (Cabinet for Economic Development, July 2026). Collateral support can close a collateral shortfall on a 7(a) deal. Loan participation can reduce the bank's hold on a 504 first lien. Our studies show lenders how the KSBCI layer changes the capital stack.

    Kentucky Tourism Development Act (KTDA)

    Under KRS 148.853, as amended effective April 27, 2026, an approved tourism project can recover up to 25% of approved costs over 10 years from the sales tax the project generates. Certain lodging projects can recover up to 50% over 20 years. Attraction projects need eligible costs above $1 million, or above $500,000 in a heritage county. They must be open at least 100 days a year and, after the third year, draw at least 25% of visitors from outside Kentucky. Lodging projects need eligible costs above $5 million, rising to $6 million when the hotel is integral to a major convention or sports facility and to $10 million at 500 or more rooms. From the first year, lodging projects must draw at least 25% of visitors from out of state. After preliminary approval, the Tourism, Arts and Heritage Cabinet engages an independent consultant, paid for by the applicant, to review the application under KRS 148.855. Five tourism development projects received final approval in 2025, representing an estimated $118 million in investment and about 298 jobs (Office of the Governor, Jan. 15, 2026). We build the visitor-origin, ADR and sales-tax projections that a KTDA application and the SBA lender both rely on.

    What Kentucky lenders stress-test by asset class

    Sources and dates appear in each row
    Asset classKentucky market evidence (dated)What the study must show
    HotelsLouisville: 63% occupancy, $132.59 ADR, ADR and RevPAR down year over year (Q3 2025, Matthews/CoStar). Lexington: 61% occupancy, $125 ADR on about 9,200 rooms (CY2025, VisitLEX). U.S.: 62.3% occupancy, $160.54 ADR (CY2025, CoStar). Kentucky lodging spending: $2.4B (2025, Kentucky Tourism)Stabilized occupancy in the low 60s, a market-specific comp set, new downtown Louisville supply netted out, and Derby, Keeneland and UK football weekends treated as upside, not base case
    Bourbon and craft distilleriesRecord 16.1M aging bourbon barrels and $75M in barrel taxes (inventory as of Jan. 1, 2025, Kentucky Distillers' Association, Oct. 2025). Jim Beam paused distillation at its main Clermont distillery starting Jan. 1, 2026. Kentucky Bourbon Trail: 2.7M visitors, flat with 2024 (2025, KDA)Debt service covered by tasting-room, retail, event and hospitality income. No credit for aged inventory or bulk-barrel sales. Barrel tax modeled near full rate (96% for 2026 assessments under HB 5 of 2023)
    C-stores and fuelState gasoline tax 26.4¢/gal and diesel 23.4¢/gal, held at those rates for FY2027 by emergency regulation 103 KAR 43:341E. A temporary 10¢ reduction under Executive Order 2026-235 took effect May 11, 2026 and, in 33 communities, was extended through June 30, 2026Radius competitor census, fuel-margin sensitivity, and Phase I and UST compliance review
    Car washesAt least 110 car-wash locations in Louisville, at least 70 of them express (Courier Journal count, Dec. 2022)Every existing and permitted wash within 3–5 miles, and a capture-rate model rather than citywide averages
    ChildcareUp to 56,000 Kentucky children lack access to formal care (Kentucky Chamber/Buffett Early Childhood Institute, Aug. 2025). 79 of 120 counties are childcare deserts (Kentucky Youth Advocates, 2024)A 12–24 month enrollment ramp, staffing ratios, payer mix, and break-even without one-time grants. A Kentucky child care license cannot be sold or transferred, so an acquisition needs a new license application approved before closing (CHFS Division of Regulated Child Care)
    Self-storageLouisville: 7.5 sq ft per capita, 92 facilities, about $90/month for a 10x10 (StorageCafe, 2026)3- and 5-mile supply per capita, pipeline and lease-up at current street rents
    RV parks, campgrounds and marinasKentucky drew 81.1M visitors in 2025 (Kentucky Tourism)A seasonal (May–September) cash-flow stress test, and for Corps of Engineers lakes, a lease or concession term that runs past loan maturity
    Restaurants and QSRVisitors spent $2.7B on food and beverage in Kentucky (2025, Kentucky Tourism)Trade-area growth from Census Vintage 2025 and escalating utility costs
    Medical, dental and veterinaryFastest-growing counties 2020–2025: Warren +10.6%, Allen +9.5%, Madison +9.3%, Scott +8.2%, Jessamine +7.7% (Census Vintage 2025 via KACo)Household growth in the trade area and, for medical, payer-mix sensitivity
    Assisted living and personal careKentucky administers Certificate of Need through the CHFS Office of Inspector GeneralConfirmation of whether the bed type needs a Certificate of Need before demand is underwritten
    LaundromatsLG&E gas rates rose 11.09%, and Kentucky Power customers received a 5.87% first-year increase (Kentucky PSC final orders, Feb. 2026)Utility costs escalated and modeled by rate class
    Manufacturing and truckingFord and SK On dissolved BlueOval SK in Dec. 2025. The Glendale (Hardin County) plant's WARN notice listed 1,518 affected employees, with layoffs beginning Feb. 14, 2026. Ford announced plans for battery energy storage production there, with about 2,100 positions and shipments targeted for late 2027Customer-concentration risk, plus a base case that does not depend on any single employer's announced hiring

    Sources and dates appear in each row. We update the market evidence for each engagement with current comps for the specific site.

    Kentucky market conditions

    Tourism

    Kentucky tourism set its fourth straight record in 2025: $14.6 billion in economic impact, 81.1 million visitors, $10.4 billion in visitor spending and nearly 97,000 jobs (Kentucky Tourism, Arts and Heritage Cabinet and Office of the Governor, June 10, 2026). Louisville Tourism estimates the Kentucky Derby and Oaks bring about $411 million in revenue to the region each year (WAVE, Apr. 30, 2026).

    Population and growth corridors

    Kentucky's population reached 4,606,864 on July 1, 2025, up about 0.5% from a year earlier (U.S. Census Bureau Vintage 2025; Census QuickFacts for Kentucky). Growth is concentrated along I-65 and I-75. Warren County (Bowling Green) reached 149,375 residents, up 10.6% since 2020. Allen, Madison, Scott and Jessamine follow. Kentucky recorded 64,042 business applications in 2025, up 18.3% from 2024 (Census Business Formation Statistics).

    Labor market

    Kentucky's seasonally adjusted unemployment rate was 4.7% in July 2026, with a civilian labor force of 2,103,837, according to the Kentucky Center for Statistics (KYSTATS July 2026 report). Kentucky's minimum wage follows the federal $7.25. Our studies model payroll at local market wages, not the minimum.

    Taxes and utilities

    Kentucky's individual income tax is a flat 3.5% for 2026 and stays at 3.5% for 2027 because the FY2025 revenue trigger was not met. The corporate rate is 5% and the sales tax is 6%. Motor fuel tax rates are published by the Kentucky Department of Revenue (Kentucky motor fuels tax). The FY2027 rates are set in 103 KAR 43:341E. In its February 16, 2026 final orders, the Kentucky Public Service Commission approved residential increases of 6.54% for KU and 4.73% for LG&E electric, plus 11.09% for LG&E gas. LG&E and KU agreed not to file another rate case before 2028. Studies escalate utility lines accordingly.

    Natural hazards and insurance

    Kentucky received federal major-disaster declarations for February 2025 flooding (DR-4860), April 2025 flooding (DR-4864), the May 16, 2025 EF4 tornado in London and Laurel County (DR-4875), the January 2026 winter storm (DR-4913) and June 2026 storms and flooding (DR-4937). After the July 2022 eastern Kentucky floods, flood-insurance take-up across the 12 flooded counties was about 1.2% (Resources for the Future). Our studies include a flood-zone determination, a review of flood history beyond the FEMA map, and bound insurance quotes in the operating budget.

    Fees and delivery

    Every engagement is quoted as a written fixed fee before work begins, so you know the cost and the delivery date before you commit.

    Fees from $4,900, fixed in writing before work begins

    Standard delivery: 10–15 business days

    Hotels: 12–20 business days

    Send us the project details and you'll receive a written fixed-fee proposal within one business day.

    Request a fixed-fee proposal

    About your consultant

    David Jones, MAI, CCIM, has prepared more than 4,300 feasibility studies. Each Kentucky study is prepared and signed by David personally. It is written so that SBA lenders, CDCs and credit committees can underwrite directly from it, with every market figure sourced and dated.

    Talk with David about your project

    Frequently asked questions

    Does my Kentucky project qualify for the 0% SBA upfront fee?

    For 7(a) loans approved from October 1, 2026 through September 30, 2027, the upfront fee is 0% on loans of $700,000 or less to manufacturers, listed food-supply-chain businesses and businesses in a county the Census Bureau classifies as at least 30% rural. At least 93 of Kentucky's 120 counties meet that test. Jefferson, Fayette, Kenton, Boone, Campbell, Daviess and Warren do not. 504 loans in the same three categories pay no upfront or annual SBA fee.

    Which SBA rules apply to my loan?

    SOP 50 10 8.1 applies to 7(a) and 504 loans that receive an SBA loan number on or after October 1, 2026. FY2027 fees apply to loans approved from October 1, 2026 through September 30, 2027.

    What debt service coverage does SBA require to buy a Kentucky business?

    Under Appendix 15 of SOP 50 10 8.1, initial acquisitions, owner buyouts and ESOP or cooperative transactions need at least 1.25x, and business expansions need 1.15x. Coverage is measured on historical or adjusted historical results. Initial acquisitions and business expansions with a purchase price of $3 million or more also require a Quality of Earnings report.

    Can I combine KSBCI with an SBA loan?

    Yes. Through participating banks, credit unions and CDFIs, Kentucky's KSBCI programs can buy up to 20% of a loan or pledge cash collateral of up to 20% of it. As of June 30, 2026, 59 lenders were participating.

    Does a KTDA hotel or attraction project still need its own feasibility study?

    Yes. Under KRS 148.855, the state engages an independent consultant to review your KTDA application, and you pay for that review. Your SBA lender will still require its own feasibility study to underwrite the loan. We build the visitor-origin and revenue projections that both reviews depend on.

    How much does a Kentucky feasibility study cost and how long does it take?

    Fees start at $4,900 and are fixed in writing before work begins. Standard delivery is 10–15 business days, and hotels take 12–20 business days. You'll receive a written fixed-fee proposal within one business day of sending your project details.

    Who signs the study?

    David Jones, MAI, CCIM, who has prepared more than 4,300 feasibility studies.

    Can I buy an existing Kentucky childcare center with an SBA loan?

    Yes. A Kentucky child care license cannot be sold or transferred, so the buyer must submit an initial license application and get it approved by the CHFS Division of Regulated Child Care before taking ownership. Our study accounts for that timing and models enrollment and staffing without relying on one-time grants.

    Sources

    1. U.S. Small Business Administration, Kentucky District Office
    2. Kentucky Cabinet for Economic Development, Kentucky Small Business Credit Initiative (KSBCI 2.0)
    3. U.S. Census Bureau, QuickFacts: Kentucky
    4. Kentucky Cabinet for Health and Family Services, Division of Regulated Child Care
    5. Kentucky Tourism, Arts and Heritage Cabinet
    6. Kentucky Revised Statutes 148.853, Tourism Development Act
    7. Kentucky Department of Revenue, Motor Fuels Tax
    8. 103 KAR 43:341E, motor fuel tax rates for FY2027
    9. Kentucky Center for Statistics (KYSTATS), July 2026 unemployment report

    Other data cited

    SBA FOIA 7(a) and 504 loan-level data (FY2024–FY2025); SBA news release, Sept. 30, 2025; SBA Information Notices 5000-880695, 5000-881797 and 5000-881796, Policy Notice 5000-879058 and Procedural Notice 5000-876626; 13 CFR 120.910; SBA Office of Advocacy 2025 Kentucky profile; Kentucky Association of Counties (Nov. 26, 2024 rural breakdown; Census Vintage 2025 county analysis); Community Trust Bank release, Dec. 12, 2025; Kentucky Today, Jan. 2, 2025; Office of the Governor releases of Jan. 15, 2026 and June 10, 2026; Kentucky Cabinet for Economic Development Title VI Implementation Plan, July 2026; Kentucky Public Service Commission final orders, Feb. 16, 2026; Matthews/CoStar Louisville Hospitality Report, Nov. 7, 2025; VisitLEX 2025 hotel data; CoStar, Jan. 20, 2026; WAVE, Apr. 30, 2026; Kentucky Distillers' Association, Oct. 2025 and Apr. 2026; Kentucky Chamber of Commerce/Buffett Early Childhood Institute, Aug. 2025; Kentucky Youth Advocates, 2024; StorageCafe, 2026; Courier Journal, Dec. 2022; Resources for the Future; FEMA disaster declarations DR-4860, DR-4864, DR-4875, DR-4913, DR-4937; Census Business Formation Statistics, 2025.

    Get a fixed-fee proposal for your Kentucky project within one business day.

    Request a fixed-fee proposal