Hotel Loans in America

Like any other industry in the US, the hotel industry has enjoyed great success in the 2008 financial crisis. The Americans had no consumable income, which meant they did not have the money to get on the road, provoking the need to invest in a hotel. Apart from business travelers, the hotel industry barely recorded sales.

In 2014, there was $ 3,645. Hotel pipeline projects in the pipeline representing more than 460,000 hotel rooms – the highest level in six years and five consecutive double-digit growth quarters (compared to the previous year). For the consecutive five year, Americans spend the US $ 137 per night on hotel rooms in the US. Due to the right prospects in the hotel industry, more hotel investment made this year in the purchase, construction, and conversion of hotels/motels than in the previous year, since the financial crisis of 2008 was no longer an issue

Trends that Impact the Need for Financing:

  • Mobile devices and new apps are in high demand in the hotel industry. In today’s society, more than ever, consumers want a personalized guest service that can only achieve through technological advances. Almost all business travelers and tourists think accessing information, booking hotels, and providing quality service from their smart phones is essential, resulting in more than 50 percent of online hotel bookings in 2016. However, it’s not easy or cheap to afford the upfront costs of creating mobile device platforms and applications, especially if you want to build a quality app. If you want to keep up with the new technology trends, consider the different financing options for your hotel business below.
  • Effective marketing is another technological trend that currently dominates the hotel industry. Effective marketing, also known as Omni channels, for the hotel industry involves displaying prices, room availability, and hotel information in real-time through a variety of online marketing channels. It is challenging to learn how to use the Omni channel options available to hotel companies and how to use them effectively and efficiently. Checking the hotel financing options available to your hotel business is critical to staying one step ahead of the competition in this diverse industry.
  • Social media engagement is critical in any industry today, and hotel companies that are not focusing on their social media see a significant decline in profitability over the next few years. Looking at various hotel loans and financing options can be helpful if you visit different hotel marketing agencies or social media specialists.
  • Wage and emergency situations are inevitable in the hotel industry. If I Consider various financing options, it may be helpful to understand how cash advances from hotel retailers work, as this provides a quick approval process coupled with immediate access to resources for these emergencies.
  • An extension or renovation of your hotel business could be possible shortly as these positive statistics and trends emerge. It is not easy, however, to find the starting capital needed to finance a hotel expansion or renovation. A review of the various hotel financing options for your business might be helpful.

Hotel Bank Loans

The traditional financing of bank hotels, such as loans and credit lines, for hotels, is always the first option a hotel company should consider when it needs financing. Traditional bank loans typically offer the lowest (fixed and adjustable) interest rates for hotel companies and the most favorable repayment terms for all hotel lenders. While traditional bank loans are the best option, not every hotel company has the time to wait for the lengthy process of financing traditional bank hotels. Another problem that some hotel entrepreneurs face is the lack of personal and business credit to receive traditional banking hotel financing. While traditional bank loans are the ideal option, there are other forms of financing that a hotel owner can obtain.

Prices: 5-10%

Duration: 1-25 years

SBA Hotel Loans

SBA hotel loans are always a good option for small hotel companies if this hotel owner cannot obtain a traditional bank loan for hotels. SBA hotel financing is more comfortable to obtain for a small business owner as the small business administration agrees to provide some of the hotel financings should the hotel owner fall into arrears. For small hotel companies, the SBA 7 (a) program and the SBA 504 program are always an option. The SBA 7 (a) program offers hotel owners financing options of up to $ 5 million with a maximum credit value of 85 percent. The SBA 504 program allows hotel companies to buy land or existing hotels, improve land, build new hotels or modernize and refurbish existing hotels. However, not every hotel company qualifies for an SBA loan because of the need for adequate credit and the time it takes to raise funds.

Prices: 6-8%

Duration: 3-25 years

Hotel Alternative Business Loans

For hotel companies struggling to obtain traditional bank loans and SBA hotel financing, alternative hotel loans may be the best option. Alternative hotel loans are also referred to as mid-prime business loans. With the financing of mid-prime hotel deals, hotel owners can still get a reasonable rate and run time and get approval and funding within a week. Mid-prime hotel lending still requires reasonable credit from a hotel company but is more flexible than traditional bank-hotel financing.

Prices: 8-25%

Duration: 1-5 years

Asset-Based Hotel Loans

For hotel owners who own their commercial or personal property and need reasonable working capital, it is possible to use the equity of their property as collateral for the financing. Liable asset lenders are prepared to offer up to 75% of the equity of the property as a term loan or as a line of credit.

Prices: 10-20%

Duration: 1-5 years

Hotel Merchant Cash Advance

Hotel advances are an excellent way to finance hotel contractors who need quick capital and hotel contractors who do not attain good credit for business. A hotel‘s merchant cash advance is the sale of the hotel‘s future bank deposits in return for a one-off financing sum. It is not real credit but has similar benefits for hotel companies as the approval rate for merchant cash advances is much higher than a traditional bank or SBA hotel credit.

Factor rates: 1.16-1.50

Duration: 4-24 months

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