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Airbnb Loans: Best Options for Airbnb Hosts
Airbnb property owners may need a loan to renovate or update an existing space or purchase a new property. Here, we’re taking a look at the best financing options for Airbnb investments.
Reviewed by: Sarah Brooks, Personal Finance Writer and Editor
Running an Airbnb investment property can be lucrative, but it also comes with a wide array of expenses. You’ll first need to find and purchase the property, then you’ll need to fully furnish it. Once that’s done, you’ll need to continually maintain the property, pay rental listing fees, and hire a cleaner in between guests.
Our Top Picks for The Best Airbnb Loans
- Biz2Credit - Best for Interest-only Airbnb Loans
- Fora Financial - Best for Hassle-free Application
- Fundbox - Best for Fast Funding for Airbnb Loans
- Bluevine - Best for Competitive Interest Rates for Airbnb Loans
- Credibly - Best for Low Credit Airbnb Loans
An Airbnb business loan can go towards purchasing a vacation rental property, renovating an existing property, or paying for ongoing property-related expenses. While loans specifically for Airbnb’s do not exist, there are plenty of other small business loans that can be used to meet your needs. Keep in mind, to qualify for a small business loan, you need to have an income-producing business that’s been in place for at least six months. You can then use the funds from the business loan toward your Airbnb expenses.
Best Small Business Loans for Airbnbs - Full Overview
1. Biz2Credit - Best for Interest-only Airbnb 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 and you’ll have access to a dedicated funding specialist to help you apply and choose the right you for you.
Pros
Cons
Biz2Credit offers term loans and working capital 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 575, at least six months in business, and $250,000 in annual revenue. Term loan and working capital amounts generally range from $25,000 to $2 million. Interest rates start at 7.99% and go up from there depending on market rates, property type, and borrower qualifications.
The Bottom Line
Biz2Credit is a good option if you want an Airbnb loan with some flexibility, since some loans allow you to make interest-only payments. 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. Fora Financial - Best for Hassle-free Application
Fora Financial is known for its easy application process and large loan amounts. You can use Fora Financial for small and large real estate projects to spruce up your property and make it Airbnb ready. The company considers your entire financial profile when making a funding decision, instead of looking solely at your credit score.
Pros
Cons
Fora Financial offers borrowers a hassle-free, one-page application process that requires minimal documentation. Funding can be as quick as 72 hours after an approval. Credit score requirements are just 500, and business loans can be used for any business, including Airbnbs. Loan amounts range from $5,000 to $750,000 and terms are offered from four months 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 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
3. Fundbox - Best for Fast Funding for Airbnb Loans
Fundbox offers lines of credit and term loans up to $150,000 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.
Pros
Cons
With Fundbox, you can choose a term loan or a line of credit from $1,000 to $150,000. Rates for term loans start at 8.33% for 24 week terms. Rates for lines of credit start at 4.66% for 12 week terms.. Minimum credit score requirement is 600, you need to have six months or more in business, and you need at least $100,000 in annual revenue to qualify for a loan or line of credit from Fundbox.
The Bottom Line
Fundbox is a solid option if you need fast funding and a smaller loan amount. You can use the loan or line of credit to make repairs on your Airbnb property or pay employees.
Try FundboxRead more in the full Fundbox review.
4. Bluevine - Best for Competitive Interest Rates for Airbnb Loans
Bluevine offers Airbnb business loans in the form of a line of credit up to $250,000. 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 funding times are quick, and there are no penalties for paying early.
Pros
Cons
All loans offered by Bluevine are lines of credit. Rates start at 4.8% for well-qualified borrowers and loan limits range from $5,000 to $250,000. Loan terms are either six or twelve months and are paid back weekly or monthly. Once you pay down your balance, the funds replenish themselves and you have access to them again. To qualify, you need a minimum credit score of 625, six months in business, and $10,000 or more per month in revenue.
The Bottom Line
Bluevine’s line of credit is a good option if you already own real estate and want to turn it into an Airbnb or if you need to make repairs on an existing property. The line of credit gives you more flexibility than a typical loan structure.
Try BlueVineRead more in the full BlueVine review.
5. Credibly - Best for Low Credit Airbnb Loans
Credibly is both 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. Credibly offers working capital loans, long-term business loans, SBA loans, business lines of credit, and more. Loans can be used for repairs, maintenance, or paying for cleaners for your Airbnb property.
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 six months of business history, and $180,000 or more in business revenue. Long-term loans offer higher loan amounts that go up to $5 million. Factor rates start at 1.09. 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. Offering eight different types of loans, it’s ideal if you want to be able to compare loans on one site or if you want to get a larger loan to assist with your Airbnb business.
Try CrediblyRead more in the full Credibly review
How to Choose the Best Small Business Loan for an Airbnb
When choosing the best small business loan for an Airbnb, there are many important factors to consider. Our financial experts used the following criteria to rank the best Airbnb lend
- Loan features - Know the loan terms, repayment options, 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 origination fees, appraisal fees, notary fees, and any other fees a lender may charge. We also looked at rates for different types of loans that can be used for an Airbnb.
- Qualification process - Typically, there is a minimum credit score requirement, as well as proof of income. The lender also may want to see tax returns and/or bank statements from the last couple years.
- 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 independent review sites like Trustpilot to see what previous customers like and don’t like. If there are too many negative reviews, you may want to check out a different lender.
- Perks and bonuses - Consider specified service offerings like payment flexibility, advertising transparency, and advanced technology. Payment flexibility may be important during off seasons when your property is vacant or slower than usual.
Main Features of the Best Airbnb Loans
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 - $2 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 | Term loans: 8.33% and up Lines of credit: 4.66% and up |
| Fora Financial | 500 | 6 months | $144,000 | $5,000 - $750,000 | Varies |
Bluevine
| 625 | 6 months | $120,000 | $5,000 - $250,000 | 4.8%+ |
How to Use Airbnb Business Loans
Airbnb business loans can be used in a variety of ways. Below, we highlight some ways that our experts suggest using these loans:
- Fix up an existing property: Make it Airbnb ready with new flooring, a kitchen remodel, and updated bathrooms.
- Furnish and accessorize: Buy furniture, home decor, and art work to spruce up your space.
- Turn empty space into an Airbnb rental: Fix up your neglected empty bedroom, studio, or mother-in-law suite, and start making rental income from spaces you already have.
- Sublease your space: Rent out your space when you’re out of town and use the Airbnb business loan to paint, make 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: If you’re looking to purchase a brand new Airbnb property, you’ll most likely have to look into alternative forms of financing, such as a second mortgage, a home equity loan, or a personal loan.
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? If not, 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 and taxes: Due to the popularity of Airbnb’s 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 provisions for mortgage payments, maintenance fees, and other expenses during the off-seasons.
- Airbnb occupancy: The number of nights your Airbnb is booked versus 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’s are 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 to 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?
Airbnb can definitely pay for your mortgage. The amount of
rental income you receive from your Airbnb will depend on the area your
property is located in, nearby attractions, on-site amenities, and how
frequently the property is rented.
How do I get funding to start Airbnb?
You can obtain funding to start an Airbnb from money you
have saved, from friends or family, or from a loan, which is the most popular
option. You can get a loan from a bank or credit union, or use an online
lender. You may choose a collateral loan such as a mortgage, a personal loan,
or a business loan.
Does an Airbnb count as a small business?
Since you are actively managing the rental and offering a
service in exchange for money, you are technically running a self-employed
business. You can also set up an LLC, which is recommended to help keep your
personal and business assets separate.
Can you get a business loan for an Airbnb?
Yes, there are many loans available to supplement your
Airbnb, including lines of credit, merchant cash advances, and general small
business loans.
Can you get an SBA loan for a rental property?
No, SBA loans are not an option for investment properties,
including single-family homes, apartment complexes, and Airbnbs. SBA loans are
strict about usage requirements, and the funds must be used for business
expenses only.
Written by: 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 and Business. She also holds several graduate certificates in early childhood development, screenwriting, and contract law.
More about me
Reviewed by: Sarah Brooks
Sarah Brooks is a personal finance writer and editor with more than 10 years of experience. She specializes in personal and business loans, mortgages, auto loans, and credit cards.
More about me
