Conventional Hotel Loans
Conventional
Conventional hotel loans are typically offered by a bank close to the property being financed or by a national bank that lends across the country. We work with local and national banks that offer conventional financing for hotel owners across the country. Rates are competitive, terms are flexible, and loan amounts are set by the lender and the deal, not by a program cap.
Is a conventional loan right for me?
Conventional may fit if:
- the hotel is stabilized with consistent cash flow;
- you can bring around 35–40% equity;
- you are an experienced hotel owner looking for a balance-sheet bank loan rather than an SBA or CMBS loan.
Benefits of a Conventional Loan:
- Competitive rates
- Flexible terms
- Loan amount set by the lender and the deal
Speak with a hotel financing expert
Call 866-994-6835 or complete the form to speak with a hotel financing expert. We will talk through your deal and review your documents at no charge, with no obligation — and you do not need to have it all organized first.
Conventional (balance-sheet) hotel loans
If you are buying a hotel or motel or are thinking of refinancing one, we can help you. Hotel financing is all we do, and we take your deal to lenders who finance hotels and other hospitality businesses.
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 what you want to accomplish. One of the loan types we place is a conventional hotel loan.
Do Your Homework Before You Invest
Investing in a hotel or a motel is a very big undertaking. You want to work with lenders that understand hotel and motel financing.
Hotel lending conditions move with the wider credit market, and what a lender will consider today is not necessarily what it would have considered a year ago. We track where conventional lenders are actively placing hotel debt and take your deal to the ones whose appetite fits it.
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 work with local and national banks that offer conventional financing for hotels and motels across the country.
Conventional hotel lending currently sits around 60–65% LTV, occasionally reaching 70% where there is a long-standing lender relationship and a strong, stabilized property — so borrowers should plan on roughly 35–40% equity. This is what lenders like to see rather than a fixed requirement; every transaction is different, and the property’s cash flow ultimately governs the loan amount. 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.
For the metrics behind these requirements, see how hotel lenders underwrite a loan.
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. We can help put you on the path to hotel or motel ownership with conventional financing. We understand hotel finance, and we take your deal to lenders who know hotels.
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.
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.
Last reviewed: October 2026