Finimpact

Hotel Financing

Although hotels can make a lot of money, especially during peak season, owners also need lots of cash to get them up and running. Hotel loans can help business owners finance the construction of a new hotel and purchase or renovate an existing one.

Hotel Financing
Katie Oelker
Written by:Katie Oelker
Personal Finance Expert

To operate or run an existing hotel, a business owner may need a business loan for expenses such as buying land, purchasing an existing building, starting new construction, and making renovations. The options for lending may seem overwhelming, which is where this roundup comes in handy. Each company we reviewed caters to a particular need, helping make business lending less confusing and more accessible to current or prospective hotel owners.

Our Top Picks for Best Hotel Financing

biz2credit review
  • Multiple loan types available
  • Funding in 48h
  • Soft credit pull
credit score
Min. Credit Score 600+
loan amount
Loan Amount $25K - $6M
loan repayment
Loan Repayment 12-36 months
forafinancial
  • Ideal for plenty of industries
  • Approval not solely credit based
  • Early payoff discounts
Credit Score
Min. Credit Score 550+
Loan Amount
Loan Amount $5K-$750K
Loan Repayment
Loan Repayment 4-15 months
credibly
  • Simple application process
  • As soon as same day funding
  • Open to high-risk industries
Credit Score
Min. Credit Score 500+
Loan Amount
Loan Amount $5K-$400K
Loan Repayment
Loan Repayment 6-18 months

How to Choose the Best Hotel Financing Company?

There are several factors to consider when researching the best hotel business loan. Our experts used these factors to rank leaders and determine how hotel business loans stack up.

  • Loan Features: Loan features include what the loan terms are, including repayment optionality, and the amount of a loan that can be taken out
  • Application process - Another important factor to consider is how invasive the application process is, including whether there is a hard-pull or soft-pull credit score impact. How long it will take to receive the funding and any distinctively competitive offerings should also weigh in.
  • Interest rates and fees - When taking out debt, it’s important to consider what the hotel financing rates and fees are, as this will impact the total amount of money owed back.
  • Qualification process - In order to obtain a loan for hotel business, each company may have their own minimum credit score, annual revenue, and business history requirements.
  • Customer support - Customer support is important to consider, as you may want to talk to a live representative and will need to make sure the company includes it. Also important is whether they have online portal or chat functionality, as well as the availability of supplemental information and tools.
  • Online user reviews - Make sure the company you choose for hotel construction loans has positive user reviews. Independent review sites, such as Trustpilot, are a great resource to check out.
  • Perks and Bonuses - Don’t forget to consider specified service offerings like payment flexibility, transparency in fees, and advanced technology features that may be helpful when financing a hotel purchase.

Best Hotel Financing Companies for 2022 - Full Overview

1. Biz2Credit - Best for Commercial Real Estate loans

Biz2Credit offers commercial real estate secured loans to those looking to acquire new hotels or fund a hotel renovation. Hotel owners can qualify in as little as 48 hours, and have 12 to 36 months to pay back the loan. Interested borrowers can apply online or call Biz2Credit’s hotline at 800-200-5678.

Pros
Quick approval and funding
Support from commercial loan specialist
Apply online or over the phone
High loan amounts
Cons
Must already own commercial property
Longer time in business needed
Higher annual revenue required
Potentially higher interest rates


To obtain a Biz2Credit commercial real estate loan, interested borrowers must have a credit score of at least 660 and have been in business for at least 18 months. They also need to have a minimum of $250,000 of revenue a year. Loan amounts start at $250,000 and go up to $6 million with rates starting at 10%. Repayment options include interest-only and monthly payments, giving the borrower flexibility and predictability during the debt payoff process.

The Bottom Line

Biz2Credit is our choice for commercial real estate loans thanks to their high loan amounts and dedicated specialists helping each step of the way. We also love the ability to use the loans for a variety of reasons, including renovating a hotel or purchasing a new one, as well as the monthly and interest only payment options.

2. Fora Financial - Best for Merchant Cash Advance

Fora Financial offers a merchant cash advance, which gives business owners a lump sum of cash and in exchange remit a percentage of the business’ credit card transactions. Therefore the remittance timeline matches up with the business' sales. This type of funding allows businesses the flexibility to use funds how they see fit.

Pros
Application does not affect credit score
Early payoff discounts
Flexibility in how funds are used
No collateral needed
Cons
Smaller funds available
Must have been in business at least 6 months
Must have $60,000 of annual credit card sales
No set terms


Fora Financial may be a good fit for hotel owners looking for $5,000-$750,000 worth of funds. To qualify, business owners must have at least $60,000 of annual credit card sales and have been in business for at least 6 months. There are no set terms but they do offer early payoff discounts. Hotel owners can use funds for a variety of reasons such as renovating a hotel or upgrading technology systems or equipment. Applying for a merchant cash advance will not affect your credit score.

The Bottom Line

Fora Financial is our choice for merchant cash advance loans for hotel owners. With no restrictions on how funds can be used, as well as no collateral needed to obtain funds, the Fora Financial merchant cash advance can be a solid option for hotel business loans.

3. Credibly - Best for Hotel Equipment Financing

Credibly offers an equipment financing loan, perfect for hotel business owners. Applying for equipment financing only takes 10 minutes, and it’s possible to get approved in as little as four hours. Hotel owners can expect funds to be deposited into their bank account the same day. Equipment financing can also help hotel business owners increase their tax efficiency through a Section 179 tax deduction.

Pros
No annual revenue required
Quick approval and funding
Potential tax deduction
No credit score required
Cons
Can only to be used for equipment financing
If repairs needed debt can increase
Equipment can be collected as collateral
Some information not available online


Credibly’s equipment loan is typically easier to obtain as the new machinery will be used as collateral. Their equipment loan does not require a minimum credit score or minimum annual revenue to qualify. On the downside, if you can no longer repay the loan that equipment will be collected. Borrowers can obtain $10,000 to $10,000,000 depending on the type of business with rates starting at 1.09%. The amount of time needed in business to qualify is not specified, so speaking with a loan specialist may be necessary.

The Bottom Line

With low interest rates and flexible terms Credibly equipment loan can be a good option for hotel business owners. The opportunity to receive funding with no credit score or minimum annual revenue required also helps Credibly stand out among its competitors.

Try Credibly

4.Torro - Best for Hotel Startup Loans

Finding funds as a hotel startup can be difficult, and Torro understands that better than most. Without a business history, excellent credit history, or a large amount of assets, new hotel businesses are a risky investment. Unlike other lenders, Torro doesn’t require a business appraisal or an asset verification. With little to no paperwork needed to apply, Torro makes it easy for startup hotel businesses to obtain funding.

Pros
Proprietary funding system speeds up the process
Same day funding possible
No need for business history
No certain level of assets to qualify
Cons
Lower terms for fixed term loan
Potentially higher rates
Smaller loan amounts compared to competitors
Shorter term payoff time


Torro offers hotel businesses two types of financing to meet their needs: fixed term funding and open ended funding. With fixed term funding the limit is $575,000 with payoff set from 3 months to 24 months. There is no penalty for paying debt off early. The open ended funding option gives more flexibility and has a $125,000 loan limit. As borrowers dip into the funds their payment is adjusted. The more funds they use, the higher their payment and vice versa.

The Bottom Line

Because Torro doesn’t require a business appraisal or asset verification they make an excellent choice for hotel startups. That combined with paperwork to apply makes Torro an easy choice for those looking to obtain funding for their new hotel business.