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Conventional Loans​


Conventional loans are typically offered by a bank close to the property being financed or a national bank that lends nationally. We have relationships with dozens of local and national banks that offer conventional financing for hoteliers across the country. Rates are low, terms are flexible, and there is virtually no maximum loan amount.

Benefits of a Conventional Loan:

  • Low rates
  • Flexible terms
  • No maximum loan amount
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Conventional Commercial Loans

If you are buying a hotel or motel or are thinking of refinancing one, we can help you. We have the years of experience you want in a hospitality lender, and we can offer you our extensive lender relationships for the financing of your hotel or other hospitality business.

Obtaining a loan to purchase a hotel or motel can be a large undertaking.  If you already own or are thinking of investing in a hotel or motel, we can help you find the loan that is just right for you want to accomplish.  One of the types of loans we offer is a conventional hotel loan.

Do Your Homework Before You Invest

Investing in a hotel or a motel is very big undertaking. You want to work with lenders that understand hotel and motel financing.  The hospitality has made a big come back since Covid, so now is the perfect time to apply for a conventional loan for your hotel or motel.

Over the past year, the hospitality industry has experienced record growth. Occupancy rates and room rates climbed to higher levels than pre-Covid.  The US Hospitality industry has continued to be one of the most stable and consistent sectors in the US economy. This translates into a great opportunity right now to secure a business loan for the hotel or motel you are looking to invest in.

Conventional Loans for Hotel Financing

Loans for hotels can be used for a multitude of purposes. In addition to buying an existing hotel or motel, hotel loans can be used to purchase land, or for construction on a new building. Loans are also available to fund renovation projects and cover various other expenses. These loans can be either short-term or long-term.

When you contact our team about a loan, we can show you the benefits of a conventional loan. A conventional loan is typically offered by a bank, close to the property being financed, or through a national lender that offers conventional financing.  We have relationships with dozens of local and national banks, all of which offer conventional financing for hotels and motels across the country. A conventional loan offers you some great benefits including:

  • Low rates
  • No maximum loan amounts
  • Flexible terms

The LTV for a conventional loan for a hotel or motel typically has a maximum of 75%, so borrowers will need to come in with about 25% cash.  The lender will also want to see there is enough post-closing liquidity left to service the debt for a few months after closing.  Typically, a lender wants to see that the borrower has a net worth of close to or greater than the requested loan amount.

Other features of a conventional hotel loan include:

  • Term and Amortization – The term and amortization will depend on the lending institution and the type of property being financed. The term can vary from 3 to 15 years while the amortization will be between 20 and 30 years.
  • Recourse – Conventional hotel loans are typically full recourse.
  • Loan Assumption – A conventional hotel loan may or may not be assumable. Assumption of a loan usually occurs when the borrower sells the property, and another purchaser takes over the loan.
  • Declining (Step-Down) Prepayment Penalty – A declining prepayment penalty can be structured in a variety of ways. It always has the same feature of the prepayment penalty lessening by 1% per step with the last 3-12 months open to prepay or refinance without penalty.

Why Work With Us?

Hotel lending can be challenging. Many borrowers are not prepared for, or do not fully understand hotel finance. You do not want to start something that has no chance of finishing. Our conventional hotel financing will help to put you on the path to hotel or motel ownership. We have a deep understanding of hotel lending, and we only work with lenders who specialize in hotel loans.

There are different financing vehicles that can put you in the driver’s seat when it comes to finding the money you need for your hotel or motel. When you contact our team, our hotel financing experts will be here to answer all of your questions about securing a hotel loan.

Keep in mind that you need to show proof of profitability as well as a viable marketing plan. All business operations, not only hotels, need to show a sustainable business model to lenders right out of the box. Lenders want to know that you know what you are investing in.

Let us match you with the loan that is right for you. Contact us today to learn how a conventional hotel loan can benefit you.

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