Owners in the hospitality industry often rely on small business financing because of the constant maintenance required in their hotels and motels. If you are an owner and in the market for a hotel loan, you will be faced with many options. It is important to understand the pros and cons of various motel and hotel loans for your business.
Why Hotel and Motel Funding is Typically Needed:
The leading reasons hotel and motels look for funding is for standard maintenance and for renovations. Whether you are a franchise of a larger flagship or a small boutique shop, it’s necessary to update the interior and exterior of your business every year or two. If you’re considering hotel or motel financing, ask yourself:How often does my punch list require me to update furniture, bathrooms, televisions and lobby?
Hotels and Motels take out loans for a series of other reasons as well:
Expansion: Purchasing a second location takes planning and capital. Many hotels and motels look to grow and take out business expansion and acquisition loans to do so.
Adding New Services: Conference centers and restaurants can improve occupancy rates. Many owners borrow money to build one or both of these into their existing facility.
Investing in Efficiency: The millennial generation is slowly becoming the hospitality industry’s core customer. This means an increased need for speed and efficiency. People in the U.S. book their stays online. Hotels invest in building websites with fast online booking. Many also borrow funds to ensure that customers have free WiFi when staying at their hotels.
Hire a Marketing Manager: Customers frequently decide on hotel stays based on Yelp ratings and Trip Advisor hotel recommendations. Hiring a marketing manager to keep a constant eye on these online channels, alert management to negative reviews and monitor all social media is a common reason to borrow funds in the hospitality industry.
When looking for alternative business financing for your property, you will be faced with many options—and not all these options are created equal.
The rates on your hotel loan will greatly depend on a number of factors: which financing option you choose, what condition your hotel or motel is in, and whether you have or are looking for a commercial mortgage or working capital.
Fundation’s small business loan rates are risk-based. We consider a series of factors when making an offer to a customer, including your personal credit history, your business credit history, the industry you are in, your profitability and your use of proceeds.
There are many reasons that you may need a small business loan for your hotel or motel. Whatever the reason, Fundation is happy to help you get the alternative business financing that is right for you.
The information contained on this page is for general informational purposes only. It is not legal advice and should not be relied upon in making borrowing decisions. Fundation loans are subject to lender approval.
Fundation combines the benefits of a bank loan with the ease and efficiency of an online lender. We offer conventional loans with competitive rates to businesses with varying credit profiles. Our technology allows us to deliver capital in as few as 3 business days through streamlining the collection and evaluation of customer information and conducting the majority of the lending process electronically. As a direct lender, we use our own capital to originate and hold the loans we make, so that we can focus on building relationships with our customers. Our dedicated customer relationship model enables us to understand each unique borrower’s business. This level of service, coupled with our best-in-class products, is why many of our customers come back to us repeatedly for more capital.