Hotel Loans and Financing Programs
We make hotel loans easy.
Financing a hotel starts with the right loan type. We structure, underwrite, and place hotel loans across SBA, conventional, bridge, CMBS, USDA, construction, preferred equity and mezzanine programs, along with life insurance, FF&E and capital lease, and C-PACE financing, and match each deal to a lender that fits it.
Do you need a loan to build, buy or refinance a hotel property?
If so, you’ve come to the right place.
We know your time is valuable, and we don’t want to waste it. We are committed to matching your deal to the right loan type and the right lender, and to being straight with you about what it will take.
Not sure which kind of lender fits your deal? Start with how to choose a hotel lender.
See our recent funded transactions.
Our 5-step funding process
- Free consultation We discuss your project and goals to see how we can add value.
- Viability review You provide initial documents, and we determine if the project is financeable.
- Formal engagement We become your trusted partner, gathering the deeper details needed to craft a bulletproof lender proposal.
- Underwriting & matching We identify the exact loan type to accomplish your specific goals, then take your project directly to our network of proven lenders.
- Term sheet to closing We secure your term sheet and stay actively engaged to guarantee a smooth closing.
Conventional
Think banks and credit unions. Typically priced below government-backed loans like SBA and USDA. Conventional loans are typically offered by a bank close to the property being financed or a national bank that lends nationally. 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.
Benefits of a Conventional Loan:
- Competitive rates
- Flexible terms
- Loan amount set by the lender and the deal
Questions about Conventional Financing? Speak with a hotel financing expert
SBA
An SBA loan can be used to build, refinance, or purchase a hotel, and it typically needs less equity than other loan types. SBA financing can reach up to 85% of total project cost — which includes the acquisition price, PIP, closing costs, and SBA guarantee fees. The property’s cash flow must support the debt at that leverage, so the loan amount is ultimately governed by performance.
Many people feel SBA loans require too much paperwork and take a long time to close. Here is how we keep the process moving:
- We work with lenders experienced in hotel loans.
- We work with PLP (preferred) lenders. These lenders have the authority to make the final credit decision on your loan and do not have to wait for the SBA to approve your loan request, which takes a step out of the process.
- We package your SBA loan request for you.
- We manage the entire process for you – from start to finish.
Types of SBA loans
- SBA 7(a) — the general-purpose program, used most often for acquisition, refinancing, and PIP work. A bank makes the loan and the SBA guarantees a portion of it, which is what allows the longer terms and lower equity contribution.
- SBA 504 — pairs a bank loan with a debenture from a Certified Development Company. It is used where the project centers on real estate or major equipment rather than working capital.
Questions about SBA financing? Speak with a hotel financing expert
Ground Up Construction
We place financing for ground-up hotel construction. Although most construction loans are made by local banks close to the construction site, we work with national construction lenders that specialize in financing for hotels.
Benefits of Construction Financing:
- Up to 85% of total project cost with SBA 504
- Bank construction: typically 60% to 65% of cost, with a monthly variable rate commonly tied to reference rates over SOFR
- Debt fund construction: 65% to 75% of cost, typically 7.5% to 10.0% interest
- Lenders who know hotel construction
- National footprint
Building from the ground up? Our guide to hotel construction loans explains how lenders fund a build and manage cost risk.
Questions about Construction Loans? Speak with a hotel financing expert
CMBS
CMBS stands for Commercial Mortgage Backed Securities. It is a type of security backed by commercial properties that are “securitized” into a pool and then transferred to a trust. The trust issues a series of bonds that are sold to investors.
Sound confusing? Don’t worry, we’ll help you determine whether a CMBS loan is right for your hotel transaction.
Benefits of a CMBS Loan for the Purchase or Refinance of a Hotel Property:
- Fixed-rate terms
- Non-recourse
- 25–30 year amortization
- CMBS loans are assumable
- Larger loan amounts
A CMBS cash-out refinance can pull out excess equity at closing, with the proceeds held in a lender-controlled escrow to fund a PIP.
CMBS hotel loansQuestions about CMBS Loans? Speak with a hotel financing expert
Bridge
A bridge loan provides temporary financing while some obstacle is overcome or rectified allowing long-term financing to be put in place. These types of loans are usually short-term and are excellent for purchasing turnaround properties. One of the main benefits of a bridge loan is that they can be closed very quickly as compared to long-term financing.
Benefits of Bridge Loans
- Closes fast
- Excellent for turnaround properties
- Provides short-term financing until long-term financing can be achieved
At Hotelloans.com we have extensive resources for bridge financing with lenders that specialize in this type of financing for hotels.
Hotel bridge loansQuestions about Bridge Loan financing? Speak with a hotel financing expert
Preferred Equity
Preferred equity sits between the senior debt and the equity in the capital stack, as mezzanine financing does. The main difference is that preferred equity is an investment in the ownership stake of the entity that owns the property. Mezzanine financing is structured as a loan that is secured by a pledge of the ownership interests in the entity that owns the property, not by a lien on the property itself. Preferred equity receives prioritized dividend repayments, typically 11% to 14%, ahead of common equity.
There are varying types of preferred equity investments which can affect the underwriting of the senior debt. Whether it’s Mezzanine or preferred equity, it’s best to reach out and discuss your project so we can identify the loan program that fits your project.
Questions about Preferred Equity? Speak with a hotel financing expert
Mezzanine Financing
Mezzanine financing can add debt to a transaction and reduce the capital needed to close. It is secured by a pledge of the ownership interest rather than a lien on the property, and together with the senior loan can bring total leverage to roughly 80% to 85% of cost. It is expensive capital, usually 12% to 18% interest. This can often mean the difference between getting a deal done and not. We work with mezzanine lenders and bring them in when this type of financing benefits the deal.
Hotel mezzanine financingQuestions about Mezzanine financing? Speak with a hotel financing expert
REITs
A REIT or Real Estate Investment Trust is an entity that owns, operates, or finances income producing real estate. We primarily work with REITs that focus on financing and not owning real estate to prevent a conflict of interest in competing markets.
REIT financing can work well for a hotel project because terms are flexible, and these types of trusts are actively looking for investment opportunities. Generally, REIT financing is used in larger hotel financing transactions.
Benefits of REIT Financing:
- Competitive rates
- Flexible terms
- Loan amount set by the lender and the deal
Questions about REITs? Speak with a hotel financing expert
Private Capital
Private Capital is a loan or equity that comes from a private individual, groups of individuals, or a company. This type of financing is usually used when a short-term need arises, but it can also be used as a long-term solution.
The benefit of using private capital is that these lenders can be more flexible with their lending guidelines, especially if they like the borrower or the asset. They can also offer more flexible loan terms.
Questions about Private Capital? Speak with a hotel financing expert
More Ways to Finance a Hotel
Life Insurance Companies (Life Cos)
Long-term, fixed-rate capital from life insurance companies for high-quality, stabilized hotels. Life insurance companies are selective on asset quality and sponsor strength, and lend at lower leverage than most senior lenders.
FF&E Financing & Capital Leases
Targets Furniture, Fixtures, and Equipment specifically.
- Offered by specialized hospitality lenders.
- Amortized over the useful life of the assets (typically 3 to 10 years).
- Keeps senior debt clear of short-term cosmetic capital encumbrances.
C-PACE (Commercial Property Assessed Clean Energy)
Funds energy-efficiency, water conservation, and renewable energy upgrades.
- Covers PIP-mandated HVAC systems, roofing, lighting, and plumbing insulation.
- Repaid via a voluntary property tax assessment over 20–30 years.
- Can legally scale to fill up to 20% of the total capital stack.
Questions about these options? Speak with a hotel financing expert
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.