Hotel Loans 101

Hotel Loans 101

Hotel financing is a strategic plan when a borrower wants to take their hotel to the next level, or start up a hotel business, among other many reasons. 

What Is a Hotel Loan?

A hotel loan is a type of business loan granted explicitly by a lender for a particular hospitality property. Other hospitality property types that may need a loan include RV parks, resorts, and bed & breakfast. Mortgagers can acquire hotel loans for different purposes, including:

• Hotel refinancing 

• Funding of the construction of a new hotel 

• For hotel expansion or development  

Why Is a Hotel Loan Necessary?

In most cases, borrowers get a hotel loan to either purchase a new hotel or refinance an already acquired hotel mortgage. While those are the key purposes why most borrowers get hotel loans, there are several other specific reasons why one would get a hotel loan:

• For stabilization of the hotel business 

• Save money for other uses 

• Add on available cash  

What Are Common Types of Hotel Loans?

Different mortgagers borrow different types of loans according to their needs and preferences. Several factors considered include the cost, size, and time frame of their awaiting projects or based on the hotel loans’ underlying guidelines. Bearing in mind hotel loans come in various varieties, here are some common types of hotel loans.

• Hotel financing rates from 6.99% to 12% 

• SBA 7(a) loans 

• Hard money  

Get yourself a lender that will match your hotel financing needs just by filling in your loan details in the lender search above.

What Is a Hotel Hard Money Loan?

Hotels hard money loans are mortgages offered by non-banks or private creditors that accrue to quite a few pros, such as fast-funding (between a few days to a few weeks) at lower LTVs and need less documentation compared to other lenders. Nonetheless, they require repayment within a few years and have high-interest rates. Use the Hard Money Lender Search Engine to get the precise hard money loan for your hotel financing.

What Is a Hotel Construction Loan?

Although it is a less common form of hotel financing, hotel construction loans are offered for borrowers planning to build a hotel. Hotel construction loans vary depending on the borrower’s needs. Here are some of the common types of hotel construction loans.

• Construction take-out loan 

• 12 to-month loans while under construction 

• SBA hotel construction loans  

Use the construction lender Search Engine to find a lender with the best loan type that aligns with your project needs.

Do Many Lenders Offer Hotel Loans?

Well, YES! Many banks, non-bank and private lenders offer hotel different hotel financing options with relatively low rates. If you require any hotel financing services, we as DrawBridge Capital are here to offer you advisory services to link you to the best lender. Feel free and contact us today.