Airbnb owners need to keep up with maintenance and expenses once they purchase the property. They will also be responsible for cleaning costs between guests. An Airbnb business loan can go towards purchasing a vacation rental property, renovating an existing property, or be used for ongoing property-related expenses. This article will help guide you through the Airbnb loan process and explain what to look for in a lender.
Best Airbnb Loans
Airbnb property owners may need a business loan to renovate or update an existing space or purchase a new building. Some of these challenges involved with obtaining a business loan for Airbnbs include meeting the often strict traditional lender requirements set forth.
Written by:Allison Bethell
Our Top Picks for Airbnb Loans
- Multiple loan types available
- Funding in 48h
- Soft credit pull
- Simple application process
- As soon as same day funding
- Open to high-risk industries
- No monthly fees or prepayment penalties
- Same-day or next-day funding
- Best for business lines of credit
How to Choose the Best Small Business Loan for Airbnb
When choosing the best small business loan for an Airbnb, there are some important factors to consider so you’re not overpaying and so you know exactly what you’re getting yourself into. After years of experience, and hours of research, our experts use the following factors to rank the best Airbnb lenders:
- Loan Features: Know the loan terms, repayment optionality, and available loan amounts. If you need an Airbnb loan for $1 million and the maximum loan amount is less, then you need to look elsewhere.
- Application process - What’s the application process like? How invasive and time-consuming is it? Will it affect your credit score or is just a soft credit pull? Does the lender have any distinctive competitive offerings? How long does the application process take and how long until funding?
- Interest rates and fees - Consider fees like origination fees, appraisal fees, notary fees, and be aware of all other lender fees. What will the rates be for an Airbnb loan? These may be higher than rates for a primary residence.
- Qualification process - Be aware of what you will need to present to qualify for a loan. Typically, there is a minimum credit score requirement, as well as proof of income, and the lender may want to see tax returns and/or bank statements from the last couple years. Know if the lender requires a certain time in business or experience in the Airbnb market before applying.
- Customer support - How accessible is customer support? Do they have live representatives and do they offer weekend and evening hours? Is there multi-channel support? Know what supplemental information and tools are available and if there are any specific resources on Airbnbs and vacation rental properties that would be beneficial.
- Online user reviews - Check out reviews on independent review sites like Trustpilot and see what the reviewers like and don’t like. If there are too many negative reviews, you may want to check out a different lender.
- Perks and Bonuses - What does the lender offer its borrowers? Consider specified service offerings like payment flexibility, advertising transparency, affiliate discounts, and advanced technology. Payment flexibility may be important during off seasons when your property is vacant or slower than usual.
Best Small Business Loans for Airbnb - Full Overview
1. Biz2Credit - Best for Interest Only Loans
Biz2Credit offers term loans and working capital loans with fast funding times. You can use these loans to pay for cleaning, repair, and maintenance on your Airbnb. Applying for the loan won’t affect your credit. You can also opt for a real estate loan, if you want to purchase a new property and use it as a Airbnb.
Pros
Cons
Biz2Credit offers term loans with quick turnaround times, often as fast as 72 hours from approval to funding. Some of its Airbnb loans offer interest only options. This makes your payments more manageable especially during a slow season, or if you have excessive repair or cleaning bills that month. In order to qualify for a loan, you need a credit score of at least 575, at least six months in business, and $250,000 in revenue. Loan amounts generally range from $25,000 to $6 million. Interest rates start at 7.99% and go up from there depending on market rates, property type, and borrower qualification.
The Bottom Line
Biz2Credit is a good option if you want an Airbnb loan with some flexibility because some loans allow you to make interest only payments. It’s also good if you’re new to the Airbnb scene because you only need to be in business for six months. Loan amounts provide a nice range from small sums that would help with plumbing repairs to large amounts that could help you purchase a quadruplex.
Try Biz2Credit Read more in the full Biz2Credit review
2. Credibly - Best for Low Credit Score Borrowers
Credibly is a direct lender and a loan marketplace. It has a plethora of Airbnb loans to choose from all on one site. Credibly’s loan eligibility requirements are on the more lenient side when compared to other lenders. There are short-term loans that can be used for repairs and furnishing your Airbnb and long-term loans which can assist in remodeling or purchasing a new property to use as an Airbnb.
Pros
Cons
Loan terms, rates, and criteria do vary by lender and the type of loan. However, you typically need to have a minimum credit score of 500, at least three years of business history, and $180,000 or more in business revenue. Long-term loans offer higher loan amounts that go up to $5 million. Rates typically start at 9.99%. The lender offers different loans for different industries and even works with riskier industries including real estate companies.
The Bottom Line
Credibly is a good option for Airbnb funding if your credit score is on the lower side. It also offers seven different types of loans from a variety of lenders. It’s ideal if you want to be able to compare loans on one site and if you want to get a larger loan to assist with the purchase of an Airbnb.
Try CrediblyRead more in the full Credibly review
3.Fundbox - Best for Fast Funding
Fundbox offers lines of credit and term loans that can be used as Airbnb loans. They specialize in fast funding and a transparent lending process. When you fill out an online application, a soft pull is done, which doesn’t negatively affect your credit score. The application typically takes about five minutes and as soon as six minutes later, you will have an answer if your Airbnb loan was approved or not. If approved, Fundbox asks you to link your business checking account so it can transfer the funds there. It also will automatically debit your account for predetermined payment amounts.
Pros
Cons
With Fundbox, you can choose a term loan or a line of credit, depending on which better works for you. Consider whether you would rather have one lump sum or access to a revolving line of credit. Rates vary but typically start at 10.1% and go up from there. Minimum credit score requirements are usually at least 600 and loans go up to $150,000. You need to have six months or more of time in business and at least $100,000 in business revenue to qualify for most loans.
The Bottom Line
Fundbox is a solid option if you’re looking for a loan to fund part of your Airbnb business. You can get the loan quickly so you can fix the emergency leak before your next guest arrives or you can quickly furnish your studio and put it on the market before peak rental season starts.
Try FundboxRead more in the full Fundbox review.
4. Fora Financial - Best for Hassle Free Application
Fora Financial is a working capital provider that offers loans to small businesses. This lender has been around since 2008 and has delivered over $2 billion in loans to 25,000 small businesses. When working with Fora Financial, you have the option to fund your Airbnb with a small business loan or merchant cash advance.
Pros
Cons
For Financial offers borrowers a hassle-free application process. The application itself can be completed online, requires minimal documentation, and is only one page long. The application process won’t affect your credit score because it’s only a soft pull. Funding can be as quick as 72 hours after an approval. Credit score requirements vary, and business loans can be used for any business including Airbnbs. Loan amounts range from $5,000 to $750,000 and don’t have any use restrictions. Loan terms are offered for up to 15 months. No collateral is required and discounts are offered if you pay off the loan early.
The Bottom Line
Fora Financial is a good option to consider when looking for an Airbnb loan because of its simple, non-invasive application process. It also offers a large range of loan amounts and your approval isn’t solely based on your credit score.
Try Fora FinancialRead more in the full Fora Financial review
5. BlueVine - Best for Competitive Interest Rates
BlueVine offers Airbnb business loans in the form of a line of credit. This gives Airbnb hosts the flexibility of using funds when they need it and only repaying what they use. This can be helpful if an unexpected repair comes up or there are more vacancies than usual during the year. The BlueVine application process and finding times are quick, you may receive an approval as soon as five minutes after finishing the online application.
Pros
Cons
All loans offered by BlueVine are lines of credit. Rates start at 4.8% for well-qualified borrowers. Loan limits typically range from $6,000 to $250,000 which is a good amount to use to renovate the property or to fix a last minute repair that pops up. Loan terms are typically either six or twelve months. You pay back each draw with fixed weekly or monthly payments. You have access to a revolving line of credit which is similar to a credit card. Once you pay down your balance, the funds replenish themselves and you have access to them again.
The Bottom Line
BlueVine is a good option if you already own real estate and want to turn it into an Airbnb or if you just need to make some repairs or use the loan for ongoing maintenance. The line of credit gives you more flexibility than a typical loan structure.
Try BlueVineRead more in the full BlueVine review
Best Airbnb Loans - Features Comparisons
Check out the table below for a quick summary and comparison of lenders and their borrower requirements.
| Company |
Min. Credit Score | Min. Time in Business | Min. Annual Revenue | Loan Amount | Interest Rate |
| Biz2Credit |
575 | 6 months | $250,000 | $25,000 - $6 million | 7.99%+ |
| Credibly | 500 | 3 years | $180,000 | Up to $5 million | 9.99%+ |
| Fundbox | 600 | 6 months | $100,000 | Up to $150,000 | 10.1%+ |
| Fora Financial | Not disclosed | 6 months | $144,000 | $5,000 - $750,000 | Varies |
| BlueVine | 600 | 6 months | $120,000 | $6,000 - $250,000 | 4.8%+ |
How to Use Airbnb Business loans?
Airbnb business loans can be used in so many different ways that you may not have even considered. Below, we highlight some ways that our experts suggest using these loans:
- Fix up an existing property: Make it Airbnb ready with furniture, kitchen gadgets, linens, new appliances, and bathroom basics.
- Furnish and accessorize: Buy furniture, home decor, and art work to spruce up your space.
- Turn empty space into an Airbnb rental: Fix up that neglected empty bedroom, that studio, or mother-in-law suite, and start making rental income from spaces you already have.
- Sub-lease your space: Rent out your space when you’re out of town and use the Airbnb business loan to paint, do any repairs, clean, and maintain the space. Make sure you get the landlord’s permission first.
- Use the loan to landscape: Add grass or pavers, build a sun deck, add a fire pit, or have a hot tub installed to give potential guests the amenities they’re looking for. Airbnbs that offer amenities typically rent more often and for higher prices than those without amenities.
- Purchase a new property:This new place is solely intended to use as an Airbnb rental. In this case, the loan will cover the majority of the cost of the property. This property could be any type of dwelling that permits Airbnb rentals, such as a condo, townhome, single family house, or a multi family building. You may purchase a property in an area that is popular for Airbnbs so you get the best return on your investment.
What To Consider Before Buying An Airbnb Property
Airbnb rentals have become globally popular, with tourists preferring them over hotels. Still, your success isn’t guaranteed. Here are a few things to consider before purchasing:
- Reputation: Airbnb’s success relies heavily on host involvement with guests. Online reviews can make or break your Airbnb business.
- Maintenance: Will you be able to handle the constant cleaning and maintenance of your property? Or do you have the resources to hire a property manager?
- Location: You might find a beautiful property, but if it’s not in the right location, you won’t have many bookings. Before purchasing an Airbnb property, do your homework. Check for amenities for tourists such as restaurants, entertainment, public transportation, and more.
- Legality & Taxes: Due to the popularity of Airbnb and pressure from the hotel industry, some cities have created burdensome regulations for short-term rental properties. Check with the municipality to learn about regulations, licensing, and tax requirements before investing in the property.
- Airbnb Rental Income: Airbnb income can vary from month to month. According to research, the average Airbnb host earns around $924 a month. Keep in mind that you will more likely earn a larger income in peak seasons than during the off-season. You will need to make provision for mortgage payments, maintenance fees, and other expenses during the off-seasons.
- Airbnb Occupancy: The number of nights your Airbnb is booked vs. the number of days available will give you an occupancy rate. A good rate depends on the real estate market, the time of year, and your listing position in the Airbnb market. The occupancy rate helps determine how successful your Airbnb will be.
- Capitalization Rate: The CAP rate is a metric used to measure investment return on your rental property. You can calculate this rate by dividing your Airbnb's net operating income by the current market value.
- FICO Score: This score will help lenders determine how likely you are to pay back a loan. A good FICO score is 670 and up. If your score is lower, don't let it deter you from investing in Airbnb since many lenders will still assist you even with a 500 credit score.
Conclusion
Airbnb is a popular vacation trend that doesn’t seem to be going away anytime soon. In order to capitalize on this growing market, you may need to obtain an Airbnb loan to help cover some of the associated costs. These loans can be used to help you remodel and furnish existing properties or purchase real estate to use as Airbnb rentals. Keep your budget in mind, think about location, accessibility, and how easy it will be to manage the property. And then when you choose a lender, keep in mind their rates, terms, fees, and qualifications to make sure you’re getting the loan that best fits you and your needs.
Frequently Asked Questions (FAQ)
Can Airbnb pay a mortgage?
How do I get funding to start Airbnb?
Does Airbnb Count as a Small Business?
Can you Get a Business Loan for Airbnb?
Can you get an SBA loan for a rental property?
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About the Author
Allison Bethell
Allison Bethell is a content writer, real estate investor, small business owner, and consultant. She has a B.A. from Villanova University in Sociology an