304 North Cardinal St. Dorchester Center, MA 02124
Hotel financing, Have questions about how to fund a hotel project? Whether you’re thinking about buying, remodeling, refinancing, or any other kind of project. The good news is that hotel financing terms and rates are now in a great spot.
Nevertheless, funding a hotel isn’t always an easy task. Things can get complicated quickly, from different sorts of properties and cash flow issues to your specific business goals and selecting from the many hotel finance providers accessible.
Fortunately, Chicago-based Commercial Lending USA is a reputable nationwide commercial mortgage broker committed to connecting hotel-lending. Customers with the most reliable direct lenders and correspondent lenders. That best suit their requirements for financing alternatives backed by assets. This is never more true than when it comes to financing hotel complexes that are under construction. Already owned, or operating but need renovations or refinancing.
We’ll assist you in locating risk-free rates and your ideal structured financial choices. And even funding for special circumstances like hotel bridges. You’ve come to the right site if you’re wondering how to finance the purchase of a hotel.
We are the hotel mortgage broker to contact if you are a family office. Small- or middle-sized commercial real estate company. Or private investor with plans to invest in hotels anywhere in the United States. See this website for more information about us and our offerings.
How is hotel financing?
The fundamental steps involved in obtaining financing aren’t all that different from those involved in obtaining a mortgage for any other commercial property, despite the apparent complications that come with buying a hotel. When considering the many amounts and formats of hotel loans, depending on the circumstances, this is where things might alter.
Generally speaking, developers and investors can pay for a variety of expenses related to owning a hotel by using hospitality financing. Among them are:
- Finance for the construction of a new hotel
- Moving an existing building
- Motel finance and loans
- Remodeling or renovation
- Acquiring an already-existing structure
- financing operational costs
- obtaining cash out of or refinancing a hotel
- Investing in new machinery for your hotel
Which kinds of hotel loans are most common?
Hospitality financing loans come in a variety of forms, each intended to provide borrowers with particular requirements with the best conditions and advantages. You might be interested in a hotel loan for any of the following purposes, depending on your circumstances:
- Acquiring an already-existing hotel
- Building of hotels
- Refinance or expand and refinance
- PIP funding
You may look for one of the following loan types, depending on your financial background, the goals of your loan, and the required quantity of cash.
- SBA 7a
- SBA 504
- Bridge credit
- Traditional mortgage loan for commercial real estate
At Commercial Lending USA, we’ll collaborate with you to ascertain the finest course of action for your financing objectives, taking into account every aspect of your particular circumstance.
Hotel Financing: Franchised or Independent
Are you thinking about making a hotel investment but are unsure if franchise or independent financing is best for you?
In the United States nowadays, more than half of all hotels are franchises. Investing in a franchise offers you access to the resources, know-how, and assistance of the parent company, but maintaining your independence allows you more influence over every aspect of running your hotel, from operational to strategic choices.
We can provide you with the financial choices you need to succeed, whether your goal is to open your own business or become a franchisee.
How to obtain hotel financing
The best place to start when looking for finance for a project relating to a hotel is with Commercial Lending USA. We will negotiate the best rates, terms, and perks for you depending on your particular needs and asset classes, thanks to our extensive network of loan partners.
hotel Financing Terms for Hotels
Terms and prices for hotel construction financing are always subject to change, but there is some information that we are always pleased to provide to our borrowers. Here are some specifics regarding the terms you might anticipate when obtaining hotel financing with Commercial Lending USA.
- Up to a 75% hotel loan-to-value ratio (80% when using the SBA or USDA)
- Risk-free rates with stable rates for up to ten years
- amortization for up to 30 years
- first places in mezzanine and commercial mortgage
- There are non-recourse loans with adjustable funding alternatives available.
- USDA low-down payment loans, SBA 504 program loans, and SBA 7a loans
- Bridge loans (based on cash flow, with debt service ratios as low as 1:1)
- A traditional business real estate mortgage loan with a decent credit score
- standards for purchases, refinances, PIPs, and building
- Quick underwriting and all loans ranging from $1 million to $50 million or more
- We exclusively make approaches to lenders with expertise in hotel financing.
- Collaborative Businesses
Are you unsure of the kind of finance we provide? These are the top three hotel loans that we assist our clients in obtaining.
Finance for Hotel Construction
For obtaining real estate or buying an already-existing hotel structure to convert into a hotel
Finance for Hotel Construction
funding for starting from scratch to build a new hotel
Finance for the Purchase of a Hotel
Purchasing an established hotel, whether as a standalone venture or as part of a franchise
Rates for hotel financing
Although market conditions have a constant influence on hotel financing rates, the present trend in the business indicates that rates are at an all-time high! Use the hotel loan estimate calculator below for a more thorough estimation of current rates based on the kind of loan you’re looking for.
Calculator for Hotel Loans
Go to our commercial mortgage calculator to determine hotel loan rates on your own. You may quickly and easily calculate your estimated loan rate with its assistance.
Companies that finance hotels
Borrowers have a plethora of options when it comes to financing a hotel purchase. However, at Commercial Lending USA, we only collaborate with the most reputable brands in the field. Although we have a large network of lenders, these are some of our preferred partners.
- Credit unions and banks
- Life insurance providers
- lenders for CMBS
- financing for private bridges
- USDA and Small Business Administration
Options for Hotel Financing We Offer
We offer affordable hospitality financing that may be tailored to fit both new construction and completed projects, as well as modifications. Our selection of commercial refinancing mortgages will be of interest to hotel businesses that are operationally sound but whose mortgages are maturing or whose interest rates have risen too high. In addition, depending on your needs and circumstances, our commercial mortgage brokers may be able to connect you, as a hotel purchaser, with bridge loans, mezzanine finance, SBA loans, SBA 504 hotel commercial loans, preferred equity, and commercial real estate private equity. Investment structures involving partnerships, trusts, corporations, LLCs, Delaware corporations, estates, and even foreign nationals can be linked to all of the aforementioned.
Case Studies on Hotel Financing
Would you like to watch Commercial Lending USA in action? These three actual case studies highlight the work we’ve done for clients in hotel financing just like you.
Refinancing of Hotels and Cash Out
A hotel owner who wanted to refinance and cash out of a Florida Holiday Inn Express that was already operating under an LLC contacted us. After four years of ownership and a major capital investment in upgrades, he significantly increased the net operating income. When approached, local banks were unable to comply with the LLC’s demands since they went beyond customary bounds. We swiftly structured a $9 million, 10-year fixed-rate loan with a 30-year amortization period, a highly competitive interest rate, and a direct cash-out of more than $3, all while maintaining the loan’s non-recourse status.
Pay off the current mortgage and complete PIP.
A stakeholder in the partnership desired to pay off its current mortgage and then borrow additional funds to execute a non-recourse PIP on a Best Western hotel in North Carolina. Furthermore, because it was unsure of its plans for the property, the borrower did not want to be forced into making a sizable prepayment. However, our $7 million, 70% LTV bridge loan, which generated $2 million for the PIP with low-interest payments, satisfied the managing partner, who expressed great satisfaction with our solutions. The borrower was given a 24-month window to determine whether to sell the property or refinance again with a long-term mortgage.
Commercial Non-Recourse Refinancing
A group of corporate investors approached us to provide funding for a stand-alone hotel that was leased from the US Army. The company wanted to refinance a $20 million commercial mortgage that was about to mature. The refinancing needed to be non-recourse, competitive, have reasonable monthly payments, and handle the complicated ground lease, especially with all of its outs. With interest rates that were more than reasonable, we arranged a 10-year fixed-rate agreement with a 30-year amortization from a life insurance business that was well-versed in ground leases.
Get extremely competitive hotel financing for your properties by working with the best hotel finance broker on the market. We have access to mortgage lenders that provide highly competitive rates and conditions that local banks are unable to provide, enabling us to arrange loans for both independent and franchised hotels across the nation.
There is a lot for your hotel through our company, no matter where it is in the life cycle.