Hotel Loans
Contact Us
If you’re thinking of owning a hotel, you will need to know about finance and where to get them. Or maybe you’ve been operating a hotel for years, but your property needs a major face-lift? Whatever the requirements, the right Hotel Loans from Commercial Real Estate Loan Pros of Miami are key to the sustainability of the hospitality industry.
What’s a Hotel Loan?
Hotel loans are a group of financial instruments designed to support companies in the hospitality market. These loans range in scale and structure, with various items tailored for smaller hotel companies relative to big multinational hotel chains. Not sure what kind of hotel loan is right for your business? You came to the right spot. Explore various forms of hotel loans, explore the best hospitality lenders, and understand the conditions of the business so that you can make an educated decision.
Popular Forms of Hotel Financing
There are so many choices for hotel financing out there; it can seem daunting at first to find the right one for your company. We’ve broken down the most popular forms of hotel finance so you can conveniently consider the pros and cons of each.
Standard Hotel Loans– These are classic loans with a set loan period and interest rate. You make regular contributions to the lender to compensate some of the principal loan and half of the unpaid interest. This is one of the more popular forms of hotel finance, and it's usually used for upgrades, recruiting new employees, or financing hospitality equipment. Mezzanine Financing – This type of hotel financing combines debt and equity. This means that the lenders would send you both an interest-bearing loan and money in return for equity in your hotel. Mezzanine lenders, which are more agile than conventional lenders, can normally have more capital than banks, albeit at a higher interest cost. This is a strong choice for hotels seeking to grow and provide a good cash flow. Hotel Bridging Loans – These loans help hotel owners cross the cash difference between purchasing a new hotel asset (usually a new building or property) and securing more stable funding (such as a mortgage) to further invest in it. Permanent Loans – This form of loan is for hotel owners to develop their hotel from the ground up. It functions as a hotel development loan in the beginning and turns into a mortgage after the project is complete. This prevents you from needing to apply for and qualify for two separate loans, sometimes from various lenders with different lending conditions. Preferred Equity – Lenders offer credit to hotel owners in return for the preferred shares of their hotels. Preferred shares get a greater degree of preference than popular shareholders if the hotel went bankrupt. In comparison to the standard loan, this form of hotel loan is usually granted as a further cash boost. SBA Hotel Financing—These government-backed small business loans offer a substantial portion of the loan to the lender if the hotel owner defaults. This significantly reduces the risk, making interest rates much lower and more affordable. However, these loans may be difficult to apply for, particularly if your hotel is facing financial difficulties. Standard Hotel Loans
Mezzanine Financing
Hotel Bridging Loans
Permanent Loans
Preferred Equity
SBA Hotel Financing
What is a hotel or motel hard money loan?
Hard money loans for hotels and motels are provided by private or non-bank lenders and have a variety of incentives, such as quick lending (only a few days to a few weeks) for lower LTVs, and needless paperwork from the borrower than the bank will like. In return, these loans are usually repaid within only a few years and arrive at higher interest rates than traditional hotel loans. Hard money loans are equity-based, which ensures that LTVs from 50 to 65 percent are popular.
What is a hotel or motel construction loan?
While far less popular than other forms of hotel and motel mortgages, building loans are available to borrowers planning to develop a new hotel or motel. Hotel construction loan conditions can differ based on the borrower’s situation, so you will see the common forms of construction loans below:
What Would You Use Your Hotel Loan For?
You can use hotel loans to finance almost everything you need to expand your business:
- Purchasing a hotel and financing it
- Refinancing the hotel
- Refinancing a home to bring cash out
- Building a hotel
- Remodeling
- Covering operational expenses
- Adding new hospitality services
- Financing new hospitality equipment
- Relocating
- Hiring more employees
Where can I acquire hotel loans?
Both banks and private lenders are selling hotel-motel loans. Banks typically provide longer maturity terms and lower interest rates, but the first phase (application phase) may be time-consuming, paperwork-heavy, and strong credit score criteria. In comparison, it may take weeks to have the permission and much longer to have the money financed from the business account.
Private non-bank lenders typically provide quicker service, with fewer reporting standards and faster processing times. However, they typically provide shorter maturity terms and higher interest rates, which may be hard to afford.
Choosing the best hotel loan
Like so many common options to utilize hotel loans, there are, of course, unique forms of company loans that would be best tailored to different ventures or purposes. For eg, if the intention is to create a new hotel, then hotel bridge loans would be the best option. On the other side, if it’s a new advertisement plan that you want to roll out, a low-interest asset-based loan may be best tailored to your needs.
Each company has a different financial profile and financial needs. So, at the end of the day, you can evaluate your particular situation closely when applying for hotel loans. Keep reading our complete rundown of the best hotel funding choices open.
What form of loan is correct for me?
If you read this and think, ‘ok, all of these options seem important, and I’m still unsure which funding choice is best for me and my business” – don’t worry! By accessing Commercial Real Estate Loan Pros of Miami, you will be able to view all the lending choices that you can apply for and the individual loan deals from various lenders. When you have all the choices in front of you, you should chat with one of our devoted funding specialists to help you find out what’s right for your needs.
There are so many areas or regions where we offer these services with most of them being cities.
However, if you need any of these services, you need to contact us. The list below comprises the areas where we offer these services.
We service all counties and cities throughout South Florida. However, if you need any of these services in other cities throughout the state of Florida, please contact us. See what services we offer below: