25 Nov Hotel Loans: 5 Ways to Get Hotel or Motel Financing
Are you looking into hotel financing options?
Here’s what frustrates many people:
When you look for options for hotel or motel loans online, you run into a lot of companies with just one product to push.
Would you rather:
- Have a (biased) company tell you why their product salesperson convince you that their motel financing product is what you need, or…
- Work with a company that has dozens of ways to help you solve your problems?
That’s a no-brainer, right?
The truth is, there are many ways to finance a motel or resort, and which is “best” will really depend on what you are trying to finance and your situation.
Here are a few ways you can acquire loans for your hotel, motel, or resort…
SBA 7(A) or 504 Loans for a Hotel
For some hotel owners, an SBA loan might be the right choice.
SBA loans generally require:
- Good credit
- Blanket liens covering all business assets
- A personal guaranteenrss
- Cash flow (profit) sufficient to cover the payments
While it is generally difficult to qualify, and the process is time consuming, rates are very low, in the 5%-8% range.
Depending on which product is used, SBA-backed resort or motel loans can be used for real estate, equipment, or working capital.
Real Estate Financing for Your Hotel or Resort
Some people contact us looking for funds to build or acquire a hotel or resort.
Borrowers seeking hotel or resort loans often need 3 things:
While an SBA loan can cover the entire transaction, often times the SBA is not the right choice.
If you need motel or resort financing, you’d probably like to have the entire solution as one package with one financing provider.
Trying to shop for 2 or 3 different companies to coordinate a solution can really be a headache…
(We can help you with all three parts and coordinate it as one solution to help solve this problem for you).
Equipment Leasing and Financing for Motels
When talking about equipment leasing, most people think of heavy trucks or machinery.
Did you know that all the furniture and fixtures in your hotel can be leased?
In many situations, the tax advantages of leasing are huge.
Some hotel owners find that after the tax savings, the financing costs are close to zero. In some cases, the costs are actually negative once taxes are considered.
Hotel equipment financing or leasing won’t be the best option for everybody. When we work with you, we’ll show you all your options.
(We’ll go over the positives…. but we’ll also show you the negatives of each option so that you may make the best decision for your business…)
Setting up Lines of Credit for Your Hotel
Most business owners seeking financing need to have a line of credit.
If you’ve tried to get a line of credit at the bank, you know the pain, right?
Often, bank lines aren’t as big as you’d like them to be, or they want to put a lien on your entire business just to give you a small amount of breathing room.
There are many other ways to get a credit line. Depending on your business, we can help you look at:
- Asset based lines of credit
- Cash flow based lines of credit
- Conventional credit lines
The rates and payments of these options range from very reasonable (single digit interest rates) to very high, depending on the “riskiness” of lending to you.
Resort or Motel Loans for Working Capital
Did you know…
If you need a loan for your hotel, there are literally dozens of options.
- Short term loans (2 years or less)
- Long term loans (2-15 years)
- Daily, weekly, or monthly payment loans
- Low interest rate loans
- High interest rate loans
The simple fact is, there is no “one-size” fits all solution.
When we consult with our customers, we find that some want very short term financing, while others prefer to have longer terms (and lower payments).
In some cases, we can help you qualify for very conventional financing (low interest rates and payments).
Sometimes, (like if you have a 500 credit score) the options can be less favorable.
In all cases, you can count on us being totally transparent with you regarding your options, with no “gotchas” or hidden fees.
If you need motel or hotel financing, your best bet is to work with someone who can help you discover multiple solutions and pick the best option for you.
We can help you look at all your options, and will present you with multiple choices let you decide which solution makes the most sense for your business.
To learn more, please click below or call us at 619-795-3123.