Getting a Loan for an Extended Stay Property

Getting a Loan for an Extended Stay Property

Did you know that business travelers account for nearly 75% of airlines’ profits? With so many people traveling for business or pleasure, there’s a demand for quality lodging. If you’re hoping to open a hotel, there’s never been a better time — but you’ll need the right financing to make it happen.

First, you’ll need to explore the options. You can start by learning about getting a loan for an extended-stay property,

Look into SBA Hotel Loans

If you’re trying to purchase or renovate an extended stay property, SBA loans are one of the more affordable options. SBA 504 hotel loans can help you acquire a building or land and build a hotel property. You can even use the loans to finance machinery.

SBA loans require that you qualify as a small business and work toward making a profit. The flexible and manageable terms can reach 25 years, making repayment less of a burden.

Consider a Hotel Bridge Loan

As you investigate hotel financing, you might find relief with a bridge loan. These tend to be short-term loans that can help during the property acquisition process or construction. If another form of financing hasn’t been secured, a bridge loan can offer the needed cash flow.

Think of a bridge loan as a form of interim cash to tackle capital improvements. While you may need to pay a higher interest rate on these loans, you’ll be able to get a bridge loan quickly. This can help you snatch up a popular property, make necessary upgrades, and seek out less expensive financing. 

Check Conventional Loans

Look into conventional loans as another way to gain funding for an extended-stay property. You’ll get lower interest rates on these loans, and you can work with a bank to determine the terms. 

National and local banks are ideal lenders, and if you’re planning to invest in a property near a bank, that could incentivize them to work with you on the loan.

Try Private Capital

You also could pursue a private capital loan from an individual or group. You’ll need to work with the financer to understand the terms of the loans.

If you’re investing in an in-demand property like an extended-stay hotel, it may be easier to find willing investors. More families want the perks of added space and a kitchenette when they hit the road. An extended-stay property offers just that, making it an attractive investment.

Explore Commercial Real Estate Loans

As another option, investigate commercial real estate loans. When you’re looking for hotel construction loans, these loans offer flexible loan terms. They also offer variable interest rates. 

Lenders will investigate your credit score and the value of the potential property during the application process. It’s also to your benefit if you have a track record of business success.

Finance a New Extended Stay Property

Acquiring a new extended-stay property can be an exciting venture, but you’ll need to get your finances in order. SBA loans offer an accessible and affordable route to hotel financing. Bridge loans, private capital, and commercial real estate loans also are viable options to consider. 

When you’re ready to get a hotel loan, contact us so we can help.

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