DeKalb County - In the case of Peggy Berg, the SBA's 504 Loan Program might be described as a stepping stone for new growth in operating and developing mid-size hotel properties in Georgia. Her new venture is a 121-room Hampton Inn in DeKalb County.

Peggy and her husband, Randy Starnes, plan to use a 504 Loan from Georgia Bank & Trust Co., for their permanent financing on the Hampton Inn Northlake that they bought earlier this year in Atlanta.

This will be the second SBA 504 Loan they have used to buy and renovate a hotel. About a year ago, they refinanced the Comfort Inn they have owned and operated near the Georgia Medical School in Augusta. The refinancing allowed them to pay off the 504 Loan they used in renovating the 100-room hotel almost eight years ago.  It also freed up their 504 capacity to buy their new property, the Hampton Inn Northlake.

The major renovation of the older Comfort Inn a few years ago was financed partially with a $3.8 million SBA 504 Economic Development Loan. "The SBA was terrific to work with," said Ms. Berg. "Our loan's fixed rate reduced our risk and the low down payment was another benefit that made it possible for us to buy the hotel."

Before they bought the hotel, the facility was getting a little thread-bare, and was not an asset to the neighborhood. Now, however, the fully renovated hotel employs about 25 people (about double the number prior to the 504 Loan). The facility has seen its revenues climb as its brightly decorated rooms are rented to the nearby medical community, families of hospital patients and other visitors to Augusta. 

 "We felt like this was a perfect 504 Loan," said Jay Forrester, Senior Vice President of Georgia Bank & Trust Company, the Augusta-based bank that provided nearly 50 percent of Berg's 504 Loan Package. Forrester noted that Berg's background, as a hotel consultant and former CPA, was a major factor in the loan being approved.

Randy Griffin is with Augusta-based CSRA Local Development Corporation, the SBA Certified Development Company that handled Berg's 504 Loan. He agreed with Forrester that Berg's first hotel project was an attractive deal. "Ms. Berg is obviously an expert on the hotel industry," said Griffin. "After we met with her, we were confident that the project would be workable."

Berg was required to put 20 percent down on the 504 Loan while the financing by CSRA came from funds raised through a 100 percent SBA guaranteed debenture.

Berg's Atlanta-based hotel consulting business is Rosedale Enterprises, LLC. Her company does market studies, valuations, lender services and other hotel development activities. A native of Rochester, N.Y., she has been involved with the hotel industry for over 25 years.

With a degree in Hospitality Management from Michigan State University, Berg is a past Chairman of the Georgia Hospitality and Travel Association as well as a founding member of the International Society of Hospitality Consultants.

Berg is also past co-chairman of the American Hotel & Lodging Association's Council of Inns and Suites, and a member of the Advisory Board of the Georgia State University Cecil B. Day School of Hospitality. 

Peggy Berg recently bought a motel near Northlake Mall in DeKalb County.