The best hotel financing options will have a combination of low rates, flexible loan terms, easy qualification requirements, and excellent customer service. Funds from the best loans can be used to cover a variety of expenses applicable to hotel financing, such as the purchase or renovation of a building, expenses associated with acquiring business equipment for the hotel, and other operational costs.
We’ve selected different types of loans depending on your intended use of the loan proceeds. This includes Small Business Administration (SBA) loans, commercial real estate (CRE) loans, hard money loans, business lines of credit, and equipment financing.
Here are our picks for the seven best hotel financing options:
- Lendio: Best overall for multiple financing options
- Clarify Capital: Best broker for SBA 7(a) loans
- U.S. Bank: Best conventional lender for commercial loans
- AVANA Capital: Best commercial bridge loan for hotels
- TMC Financing: Best for large loans and expertise in SBA 504 hotel funding
- Smarter Finance USA: Best for equipment financing
- Creditfy: Best flexible terms for a line of credit
Best Hotel Financing Options at a Glance
Loan Type | Estimated Starting APR | Maximum Loan Amount | Maximum Loan Term | Credit Score Required | |
|---|---|---|---|---|---|
 | SBA/CRE | 6.25% to 11.5% | $5 million | 30 years | 650 |
 | SBA 7(a) | 5.75% | $5 million | 25 years | 640 |
 | SBA/CRE | 6.50% | 25 years | 700 | |
 | Commercial bridge | 6% | $30 million | 3 years | 680 |
 | SBA 504 | 5.76% | No stated maximum | 25 years | Not stated |
 | Equipment financing | 6% | $1 million | 5 years | |
 | Line of credit | 6.49% | $2.5 million | 3 years | 600 |
Lendio: Best Overall for Multiple Financing Options
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Rates and Terms | |
Estimated APR | 6.25% to 11.5% and up |
Loan Amount | $250,000 to $5 million |
Minimum Down Payment | 10% |
Repayment Term | 5 to 25 years |
Repayment Schedule | Monthly |
Closing Costs & Fees | Varies |
Funding Speed | 30 to 90 days |
Loan Type | Commercial mortgage, SBA 504, and SBA 7(a) |
Qualifications | |
Credit Score | 600 |
Time in Business | 2 years |
Debt Service Coverage Ratio (DSCR) | 1.25x but may vary |
Annual Revenue | $96,000 |
Why We Like Lendio
We selected Lendio as the best overall pick due to the variety of financing options it offers. As a broker, it has a network of over 75 lenders, and working with Lendio means you’ll be assigned a dedicated funding specialist who will match you with the best financing options based on your qualifications and business needs. For these reasons, Lendio was also selected as one of our best business loan brokers.
Lendio offers commercial mortgages and SBA loans that can be used for financing the repair or acquisition of a hotel. However, you’ll typically need to have strong finances and good credit to qualify. For its SBA loans, Lendio offers the SBA 7(a) program where funds can be used for nearly any day-to-day business-related use, something we detail in our SBA 7(a) guide. Businesses in need of funds for financing fixed assets can consider the SBA 504 program.
To learn more or to submit an application, visit the Lendio website, where applications can generally be completed in under 15 minutes. Once you complete the online application, a member of the Lendio team will reach out to you shortly to discuss next steps, including requesting any supporting documentation to verify your eligibility.
Clarify Capital: Best Broker for SBA 7(a) Loans
| |
Rates and Terms | |
Estimated APR | 5.75% and up |
Loan Amount | $5,000 to $5 million |
Minimum Down Payment | 10% |
Repayment Term | Up to 25 years |
Repayment Schedule | Monthly |
Closing Costs & Fees | Varies |
Funding Speed | 21 to 180 days |
Loan Type | SBA 7(a) |
Qualifications | |
Credit Score | 500 |
Time in Business | 6 months |
DSCR | 1.25x but may vary |
Annual Revenue | $120,000 |
Why We Like Clarify Capital
Clarify Capital is another broker on our list similar to Lendio in that it also has over 75 lenders in its network. Because it advertises low average rates for its SBA 7(a) loan program, we selected it as the best option if you’re looking for an SBA 7(a) loan.
As with most brokers, working with Clarify Capital means you’ll get to work with a dedicated loan advisor. This can be especially helpful for SBA loans due to the heavy paperwork requirements often involved. Clarify Capital’s loan experts can help match you with the best SBA lender suited for your needs, walk you through the approval process, and even assist with gathering and filling out paperwork.
To learn more or to apply, visit the Clarify Capital website. Online applications can be completed in just a few minutes and will not impact your credit score.
U.S. Bank: Best Conventional Lender for Commercial Loans
Rates and Terms | |
Estimated APR | 6.50% and up |
Loan Amount |
|
Minimum Down Payment | 20% |
Repayment Term | Up to 25 years |
Repayment Schedule | Monthly |
Closing Costs & Fees | 2% to 4% of loan amount |
Funding Speed | 30 to 45 days (60 to 90 days for SBA loans) |
Loan Type | CRE and SBA |
Qualifications | |
Credit Score | 700 recommended but may vary |
Time in Business | 2 years recommended but can vary |
DSCR | 1.25x |
Annual Revenue | None |
Why We Like U.S. Bank
For hotel financing, we chose U.S. Bank as the best conventional lender for CRE loans. While other lenders in this guide such as TMC Financing also offer mortgages and SBA loans, we like U.S. Bank for its overall combination of low rates, long repayment terms, and large loan amounts.
Its loan offerings include commercial real estate mortgages, SBA 7(a) loans, and SBA 504 loans. It also offers programs like its Quick Loan (acts as a term loan) and its Cash Flow Manager (is a line of credit), which may be applicable based on your financing needs.
It’s recommended that you have a credit score of 700, at least two years’ time in business, and a DSCR of at least 1.25x. Although its SBA loans can have lower down payment requirements of 10%, you may be expected to have 20% or more depending on the lender’s overall evaluation of your loan application.
This provider is a preferred lender with the SBA. This means that it has the authority to issue SBA loan decisions on its own. In contrast, lenders that do not have this designation must obtain a separate approval, which can add several days or weeks to the process.
To start the application process, you’ll need to call or complete the lender’s online form for a callback.
AVANA Capital: Best Commercial Bridge Loan for Hotels
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Rates and Terms | |
Estimated APR | 6% to 11% |
Loan Amount | Up to $30 million |
Minimum Down Payment | 25% |
Repayment Term | 12 to 36 months |
Repayment Schedule | Monthly, interest-only available |
Closing Costs & Fees | Varies |
Funding Speed | 10 to 30 days |
Loan Type | Commercial bridge loan |
Qualifications | |
Credit Score | 680 is recommended |
Time in Business | 3 years recommended |
DSCR | 1.4x recommended |
Annual Revenue | Varies |
Why We Like AVANA Capital
AVANA Capital’s core expertise is in the area of hospitality financing. Although it offers many different types of loans for hotels, we recommend it specifically for short-term bridge loans. This is because its bridge loans have competitive rates, fast closing speeds, and low interest-only payments that can help alleviate potential cash flow concerns.
Its commercial bridge loans are designed to allow you to acquire or fund a renovation project while simultaneously looking for permanent long-term funding. While AVANA Capital’s funding products are targeted for those in the hospitality industry, it can also finance healthcare facilities, retail stores, restaurants, and more.
One downside is that the company does not provide much information about qualification requirements on its website. It also does not allow you to apply online. Rather, you’ll need to provide your phone number in order to request the next steps if you’re interested in getting the process started.
TMC Financing: Best for Large Loans and Expertise in SBA 504 Hotel Funding
| |
Rates and Terms | |
Estimated APR | 5.76% and up |
Loan Amount | No stated maximum |
Minimum Down Payment | 10% |
Repayment Term | Up to 25 years |
Repayment Schedule | Monthly |
Closing Costs & Fees | $2,500 attorney fees plus 2.5% to 3% of the loan amount |
Funding Speed | 30 to 60 days |
Loan Type | SBA 504 |
Qualifications | |
Credit Score | Not stated |
Time in Business | 2 years recommended |
DSCR | 1.25x |
Annual Revenue | Varies |
Why We Like TMC Financing
TMC Financing makes our list as a provider that specializes in SBA 504 loans. While many SBA 504 lenders have a maximum funding amount of $5.5 million, TMC Financing has no stated maximum (when combined with its other financing options). Having also financed over $14 billion in SBA projects, it’s a good provider if you’re looking for an experienced company to walk you through the process. While other providers like U.S. Bank also offer SBA 504 loans, TMC Financing is an expert and one of the leading SBA 504 lenders nationwide.
If you get an SBA 504 loan from TMC Financing, loan payments will be fully amortized, so you won’t have any balloon payments to worry about. No additional collateral outside of the property being acquired is needed, and you also have the option to finance certain closing and other soft costs. However, in addition to closing and origination fees associated with getting the loan, a prepayment penalty will apply if the loan is paid off in the first 10 years.
Other requirements to qualify include the need to occupy at least 51% of the property within one year of funding for existing real estate. New construction, however, requires a 60% occupancy rate. The tangible net worth of your business also must not exceed $15 million. Check out our SBA 504 loan guide to learn about other requirements that apply to this program.
To apply, you can visit the TMC Financing website. Those located in Arizona, Hawaii, California, Nevada, or Oregon can get a complimentary pre-qualification analysis even before a property is identified.
Smarter Finance USA: Best for Equipment Financing
 | |
Rates and Terms | |
Estimated APR | 6% and up |
Loan Amount | $10,000 to $1 million |
Minimum Down Payment | 0% to 35% |
Repayment Term | 24 to 60 months |
Repayment Schedule | Weekly, monthly, seasonal, and deferred |
Closing Costs & Fees | $2,500 attorney fees plus approximately 2.65% of loan amount |
Funding Speed | 2 to 4 days |
Loan Type | Equipment financing |
Qualifications | |
Credit Score | None but 600 is recommended |
Time in Business | None |
Annual Revenue | None |
Why We Like Smarter Finance USA
Along with being one of our top picks for this guide, Smarter Finance tops our list of the best equipment financing companies as well. It is another broker like Lendio and Clarify Capital and has over 37 lenders in its network. Itt specializes in equipment financing, offering loans and leases for a variety of equipment, including vehicles, heavy equipment, and construction.
Its team also has the necessary experience to present your business in the best possible way to secure competitive rates and loan terms. Plus, Smarter Finance has some of the most flexible repayment terms out of all the options in our guide, with options for weekly, monthly, seasonal, and deferred.
Applications are reviewed on a case-by-case basis, and there are no minimum requirements for time in business or revenue. The same is true for your credit score, but it’s recommended that you have at least a 600 to increase your odds of approval. Applications can be completed online in just a few minutes, with access to funds within one to four business days.
Creditfy: Best Flexible Terms for a Line of Credit
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Rates and Terms | |
Estimated APR | 6.49% and up |
Loan Amount | Up to $2.5 million |
Repayment Term | 6 months to 3 years |
Repayment Schedule | Monthly |
Funding Speed | As fast as 24 hours |
Loan Type | Line of credit |
Qualifications | |
Credit Score | 600 |
Time in Business | 6 months |
Annual Revenue | $180,000 |
Why We Like Creditfy
Creditfy is another business loan broker on our list that can offer some of the most flexible loan terms and rates available. In addition to a competitive APR, you can get the longest repayment term and largest loan amount for a business credit line. Additionally, Creditfy can issue funding in as little as 24 hours. For these reasons, it’s our pick for the best flexible line of credit.
It boasts a high loan approval rate of 90%; however, borrowers should keep in mind that the best rates and terms will typically require strong credit and finances in excess of the minimum stated eligibility criteria.
As is the case with many other business loan brokers, working with Creditfy allows you to work with a loan specialist to guide you through the process and present you with financing options based on your company’s unique needs, goals, and qualifications. To give you the best experience, Creditfy requires all of its lending specialists to have at least two years of industry experience, and it also has exclusive partnerships with certain lenders.
To apply, you can visit the Creditfy website and complete an application in as little as a few minutes.
How We Chose the Best Hotel Loans
We considered the following criteria when selecting the best hotel loans:
- Interest rate, fees, and estimated APRs
- Loan terms, such as repayment period and loan amount
- Qualification requirements, such as credit score, time in business, and revenue
- Funding speed
- Type of financing offered
- Ease of application
- Industries served
- Customer reviews and ratings
How to Choose a Loan Provider
There are a few factors to consider before choosing a hotel financing lender and committing to a loan agreement.
- Determine your financing needs. You should prepare accordingly and determine exactly how much funding you’ll need to apply for based on your business goals. Also, have a plan for how you’ll repay the loan, and ensure you have the budget and qualifications necessary.
- Review lender qualification requirements. Eligibility criteria will vary depending on the lender and loan type you’re looking for. It’s best to see to it that you meet the minimum requirements of any lender you’re interested in to better your odds of approval.
- Compare loan rates, fees, and terms. Once you’ve found lenders that may work for you, you should practice due diligence and compare the various loan costs and terms to ensure that you’re getting the best loan for your business needs and budget.
Alternatives to Hotel Loans
If you think the above financing options aren’t the right choice for you or simply want to learn what other options are available, here are some alternatives for you to consider:
- Rollover for business startups (ROBS): A ROBS is not a loan, so this is a good option if you don’t want to pay interest fees. It allows you to access your retirement accounts tax- and penalty-free for business purposes. Our roundup of the top-recommended ROBS providers can help you find an option that fits the bill.
- Personal loan for business purposes: If you don’t need a large amount of funding, a personal loan can be easier to qualify for and could give you a more competitive rate than a business loan. See our recommendations for the best personal loans for business funding.
- Loans from friends or family: Compared with traditional bank loans, loans from friends and family are generally less formal, and you can often get a lower interest rate and more flexible terms. Head over to our guide on raising money from family and friends to fund your business.
Frequently Asked Questions (FAQs)
There are various loan types that can provide you with funding to purchase a hotel. Common loan types include SBA loans, commercial real estate loans, bridge loans, and hard money loans. Once you find a lender that offers these financing options, you should also check to see if it has any restrictions on property types.
Since a hotel loan is secured by the property itself, it can be easier to get than an unsecured loan. For example, it’s possible to get financing with bad credit, but you’ll still need to demonstrate strong finances as proof that you can afford the loan payments. Additionally, many hotel loans require a downpayment between 10% and 25%.
Lenders will have varying requirements. Generally, factors they will take into consideration include credit score, time in business, and annual revenue. That said, the stronger your qualifications, the better your chances of approval and getting favorable rates and terms.
Bottom Line
The best hotel financing options we’ve selected can provide competitive rates and excellent customer service. Since getting business loans for hotels can be a complex process, our guide also includes different types of loans, so you should be able to find one well-suited to your needs. As always, we recommend contacting multiple lenders to ensure you’re getting the best rates possible.
