Senior Writer & Content Strategist | Small business, business banking, business loans
Randa Kriss is a senior writer and NerdWallet authority on small business. She has nearly a decade of experience in digital content. Prior to joining NerdWallet in 2020, Randa worked as a writer at Fundera, covering a wide variety of small-business topics and specializing in the lending and banking spaces. Her work has been featured by The Washington Post, The Associated Press and Nasdaq, among others. Randa earned a bachelor's degree in English and Spanish at Iona University (formerly Iona College).
Senior Writer & Content Strategist | Small business, business banking, business loans
Randa Kriss is a senior writer and NerdWallet authority on small business. She has nearly a decade of experience in digital content. Prior to joining NerdWallet in 2020, Randa worked as a writer at Fundera, covering a wide variety of small-business topics and specializing in the lending and banking spaces. Her work has been featured by The Washington Post, The Associated Press and Nasdaq, among others. Randa earned a bachelor's degree in English and Spanish at Iona University (formerly Iona College).
Sally Lauckner has over a decade of experience in print and online journalism. Before joining NerdWallet, Sally was the editorial director at Fundera, where she built and led a team focused on small-business content. Her prior experience includes two years as a senior editor at SmartAsset, where she edited a wide range of personal finance content, and five years at the AOL Huffington Post Media Group, where she held a variety of editorial roles. She has a master's in journalism from New York University and a bachelor's in English and history from Columbia University. Email: slauckner@nerdwallet.com.
Sally Lauckner has over a decade of experience in print and online journalism. Before joining NerdWallet, Sally was the editorial director at Fundera, where she built and led a team focused on small-business content. Her prior experience includes two years as a senior editor at SmartAsset, where she edited a wide range of personal finance content, and five years at the AOL Huffington Post Media Group, where she held a variety of editorial roles. She has a master's in journalism from New York University and a bachelor's in English and history from Columbia University. Email: slauckner@nerdwallet.com.
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Senior Writer & Content Strategist | Small business, business banking, business loans
Randa Kriss is a senior writer and NerdWallet authority on small business. She has nearly a decade of experience in digital content. Prior to joining NerdWallet in 2020, Randa worked as a writer at Fundera, covering a wide variety of small-business topics and specializing in the lending and banking spaces. Her work has been featured by The Washington Post, The Associated Press and Nasdaq, among others. Randa earned a bachelor's degree in English and Spanish at Iona University (formerly Iona College).
Senior Writer & Content Strategist | Small business, business banking, business loans
Randa Kriss is a senior writer and NerdWallet authority on small business. She has nearly a decade of experience in digital content. Prior to joining NerdWallet in 2020, Randa worked as a writer at Fundera, covering a wide variety of small-business topics and specializing in the lending and banking spaces. Her work has been featured by The Washington Post, The Associated Press and Nasdaq, among others. Randa earned a bachelor's degree in English and Spanish at Iona University (formerly Iona College).
Sally Lauckner has over a decade of experience in print and online journalism. Before joining NerdWallet, Sally was the editorial director at Fundera, where she built and led a team focused on small-business content. Her prior experience includes two years as a senior editor at SmartAsset, where she edited a wide range of personal finance content, and five years at the AOL Huffington Post Media Group, where she held a variety of editorial roles. She has a master's in journalism from New York University and a bachelor's in English and history from Columbia University. Email: slauckner@nerdwallet.com.
Sally Lauckner has over a decade of experience in print and online journalism. Before joining NerdWallet, Sally was the editorial director at Fundera, where she built and led a team focused on small-business content. Her prior experience includes two years as a senior editor at SmartAsset, where she edited a wide range of personal finance content, and five years at the AOL Huffington Post Media Group, where she held a variety of editorial roles. She has a master's in journalism from New York University and a bachelor's in English and history from Columbia University. Email: slauckner@nerdwallet.com.
NerdWallet's content is
fact-checked for accuracy, timeliness, and relevance by humans.
It undergoes a thorough review process involving writers and editors to ensure
the information is as clear and complete as possible. Learn more by checking
our
Editorial Guidelines.
Content was accurate at the time of publication.
Why trust NerdWallet
250+ small-business products reviewed and rated by our team of experts.
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NerdWallet's small-business loans content, including ratings, recommendations and reviews, is overseen by a team of writers and editors who specialize in business lending. Their work has appeared in The Associated Press, The Washington Post, MarketWatch, Nasdaq, Entrepreneur, ABC News, MSN and other national and local media outlets. Each writer and editor follows NerdWallet's strict guidelines for editorial integrity to ensure accuracy and fairness in our coverage.
Advertiser disclosure
You’re our first priority.
Every time.
We believe everyone should be able to make financial decisions with
confidence. And while our site doesn’t feature every company or
financial product available on the market, we’re proud that the guidance
we offer, the information we provide and the tools we create are
objective, independent, straightforward — and free.
So how do we make money? Our partners compensate us. This may influence
which products we review and write about (and where those products
appear on the site), but it in no way affects our recommendations or
advice, which are grounded in thousands of hours of research. Our
partners cannot pay us to guarantee favorable reviews of their products
or services. Here is a list of our partners .
You can get hotel financing from a variety of sources, including lenders that specialize in lodging and hospitality. Hotel loans can be used for working capital, to buy or renovate an existing hotel, to build a new hotel or to purchase equipment, furniture and supplies.
The best hotel financing will be the most affordable small-business loan you can qualify for that meets your needs.
Why trust NerdWallet
250+ small-business products reviewed and rated by our team of experts.
80+ years of combined experience covering small business and personal finance.
50+ categories of the best business loan selections.
NerdWallet's small-business loans content, including ratings, recommendations and reviews, is overseen by a team of writers and editors who specialize in business lending. Their work has appeared in The Associated Press, The Washington Post, MarketWatch, Nasdaq, Entrepreneur, ABC News, MSN and other national and local media outlets. Each writer and editor follows NerdWallet's strict guidelines for editorial integrity to ensure accuracy and fairness in our coverage.
How much do you need?
We’ll start with a brief questionnaire to better understand the unique needs of your business.
Once we uncover your personalized matches, our team will consult you on the process moving forward.
Must meet job creation or public policy goals to qualify.
Longer processing times than online lenders.
SBA 504 loans are an affordable option for funding equipment and real estate purchases. These SBA loans offer low interest rates, long repayment terms and large funding amounts. 504 loans also have a fairly low down payment requirement compared to other equipment or real estate loans. To qualify, however, you’ll likely need to be an established business with good credit.
Be a for-profit U.S. business.
Net worth of less than $15 million.
Average net income of less than $5 million for the two years prior to your application.
Financial qualifications determined by individual lender.
Must meet job creation or public policy goals to qualify.
Longer processing times than online lenders.
SBA 504 loans are an affordable option for funding equipment and real estate purchases. These SBA loans offer low interest rates, long repayment terms and large funding amounts. 504 loans also have a fairly low down payment requirement compared to other equipment or real estate loans. To qualify, however, you’ll likely need to be an established business with good credit.
Be a for-profit U.S. business.
Net worth of less than $15 million.
Average net income of less than $5 million for the two years prior to your application.
Financial qualifications determined by individual lender.
Flexible repayment options: monthly, quarterly, annually or semiannually.
Cons
Charges an origination fee.
Triton Capital stands out as an online equipment lender for borrowers with lower credit scores. Triton Capital can finance new or used equipment in a variety of industries. The lender offers competitive interest rates, long repayment terms and flexible payment options. You may be able to get approved and receive funding in as fast as one business day.
Flexible repayment options: monthly, quarterly, annually or semiannually.
Cons
Charges an origination fee.
Triton Capital stands out as an online equipment lender for borrowers with lower credit scores. Triton Capital can finance new or used equipment in a variety of industries. The lender offers competitive interest rates, long repayment terms and flexible payment options. You may be able to get approved and receive funding in as fast as one business day.
Not available in North Dakota, South Dakota or Nevada.
Rates can be high compared with traditional lenders.
Bluevine stands out for its fast funding speed and flexible qualification requirements. To get a line of credit, you can apply quickly online and receive funding in as little as 24 hours. Newer businesses and borrowers with bad credit may be able to qualify. Bluevine also offers a larger credit line maximum compared to some competitors and doesn’t charge draw or account maintenance fees.
Not available in North Dakota, South Dakota or Nevada.
Rates can be high compared with traditional lenders.
Bluevine stands out for its fast funding speed and flexible qualification requirements. To get a line of credit, you can apply quickly online and receive funding in as little as 24 hours. Newer businesses and borrowers with bad credit may be able to qualify. Bluevine also offers a larger credit line maximum compared to some competitors and doesn’t charge draw or account maintenance fees.
SBA 7(a) loans stand out as an affordable option for businesses that can’t qualify for bank financing, but still have good credit and finances. 7(a) loans offer low interest rates, long repayment terms and large funding amounts. These loans can also be used for a variety of purposes, including working capital, business expansions or purchasing equipment and supplies.
For-profit U.S. business.
Unable to access credit on reasonable terms from nongovernment sources.
Financial qualifications determined by individual lender.
SBA 7(a) loans stand out as an affordable option for businesses that can’t qualify for bank financing, but still have good credit and finances. 7(a) loans offer low interest rates, long repayment terms and large funding amounts. These loans can also be used for a variety of purposes, including working capital, business expansions or purchasing equipment and supplies.
For-profit U.S. business.
Unable to access credit on reasonable terms from nongovernment sources.
Financial qualifications determined by individual lender.
Cash can be available within the same business day (does not apply in California or Vermont).
Accepts borrowers with a minimum credit score of 625.
Streamlined application process with minimal documentation required.
Can be used to build business credit.
Cons
Cannot fund North Dakota-based businesses.
Requires frequent (daily or weekly) repayments.
Interest rates can be high compared with traditional lenders.
Charges origination fee.
OnDeck’s short-term loan is a good option for making one-time investments in your business, such as opening a new location or renovating your space. This loan offers fast funding (sometimes as quickly as the same day) for borrowers who may not qualify for more traditional financing options. OnDeck’s short-term loan can also be used to establish and build business credit — as the lender reports your payment history to the three commercial credit bureaus.
Cash can be available within the same business day (does not apply in California or Vermont).
Accepts borrowers with a minimum credit score of 625.
Streamlined application process with minimal documentation required.
Can be used to build business credit.
Cons
Cannot fund North Dakota-based businesses.
Requires frequent (daily or weekly) repayments.
Interest rates can be high compared with traditional lenders.
Charges origination fee.
OnDeck’s short-term loan is a good option for making one-time investments in your business, such as opening a new location or renovating your space. This loan offers fast funding (sometimes as quickly as the same day) for borrowers who may not qualify for more traditional financing options. OnDeck’s short-term loan can also be used to establish and build business credit — as the lender reports your payment history to the three commercial credit bureaus.
Minimum credit score: 625.
Minimum time in business: 12 months.
Minimum annual revenue: $100,000.
Must have business bank account.
What is hotel financing?
Hotel financing refers to loans that are designed to help businesses in the hospitality industry. These loans can provide funding for hotels, motels, resorts and bed-and-breakfasts, among other accommodation properties.
You can use a hotel loan to:
Purchase a hotel.
Build a new hotel.
Renovate or improve your property.
Refinance an existing hotel loan.
Cover day-to-day expenses.
Purchase hotel equipment and machinery.
Hire staff.
Fund marketing or advertising campaigns.
Where to get hotel financing
Bank and SBA lenders
Banks and SBA lenders — which are typically banks and credit unions themselves — usually offer low interest rates, long repayment terms and large business loan amounts.
To qualify, however, you’ll generally need a strong credit history, solid financials and multiple years in business. You may need to provide collateral to secure your loan. SBA and business bank loans also have a lengthy application process and can be slow to fund.
Still, businesses with strong credentials may want to consider these lenders to get hotel financing with the most competitive rates and terms.
Here are two lenders you might consider:
Bank of America
Bank of America offers commercial real estate financing starting at $25,000 that can be used for purchasing property or refinancing an existing loan. These loans are available with terms up to 15 years and interest rates starting as low as 5.5%
Bank of America business loans also include both SBA 7(a) and CDC/504 loans. You can get a 7(a) loan up to $5 million, with terms up to 25 years for commercial real estate and up to 10 years for all other purposes. For 504/CDC loans, you can get a loan of $400,000 or more. Repayment terms are up to 25 years for commercial real estate and up to 10 years for machinery or equipment.
Celtic Bank
Celtic Bank is a digital bank that focuses on small-business financing and SBA loans. It is one of the largest processors of SBA 7(a) loans in the country — approving nearly $2 billion in loan volume for the 2024 fiscal year
In addition to 7(a) loans, Celtic Bank offers SBA CDC/504 loans and, according to its website, has over 20 years of experience funding hotel acquisitions, purchases and construction.
Celtic is also an SBA Preferred Lender, which helps expedite the funding process. Unlike many SBA lenders, the bank allows you to start and manage your application online. Depending on your loan type and business credentials, you could qualify in as little as 10 minutes and once approved, receive your funds within 48 hours.
Plus, Celtic Bank offers more than just SBA financing. You can explore other hotel loan options, including equipment financing, construction financing and working capital loans.
Compared to banks and SBA lenders, alternative lenders usually provide quick funding, with streamlined online applications. These lenders may have looser qualification requirements, but they also tend to offer smaller loan amounts, shorter repayment terms and charge higher interest rates for financing.
If you need a hotel loan fast, you might consider these lenders.
Triton Capital
Triton Capital is an online lender that specializes in equipment financing, offering loans of up to $250,000. Hotel financing from Triton Capital can be used for equipment such as fixtures, beds, furniture, chairs, ice machines, security systems, smart appliances, room service tables or luggage carts.
You can apply for a loan online and receive approval within two to four hours. If you’re approved, you can access funds within one to two days after signing your loan agreement.
To qualify for equipment financing from Triton, you’ll need at least 24 months in business, a minimum credit score of 580 or higher and at least $250,000 in annual revenue.
Bluevine
Bluevine offers a business line of credit of up to $250,000. This line of credit allows you to draw funds as needed and make payments on a fixed schedule. As you repay, your credit line replenishes automatically. Because of this structure, the Bluevine line of credit can be a good option to cover your hotel’s ongoing working capital needs.
You can apply for a line of credit online and receive approval in as fast as five minutes. After approval, you can make a draw from your line and get funds in as little as 24 hours.
To qualify for a Bluevine line of credit, you must have at least 12 months in business, $120,000 in annual revenue and a credit score of 625 or higher.
OnDeck
OnDeck’s short-term loan is available in amounts up to $250,000. Repayment terms are available for up to 24 months. This short-term business loan can be useful for covering immediate financing needs for your hotel. It can also be a good option for bridge financing.
Bridge financing is a short-term business loan that you use to cover expenses while you wait for longer-term financing. If you need to pay for project expenses while you’re in the process of getting an SBA loan, for example, this financing may help.
You can apply for an OnDeck loan in minutes and once approved, receive funds as soon as the same day. To qualify, you’ll need at least 12 months in business, annual revenue of $100,000 and a credit score of 625 or higher.
ARF Financial
ARF Financial is an alternative lender that provides fast business loans to hospitality companies, including hotels, motels and bed-and-breakfasts. You can use a hotel loan from ARF for a range of purposes, including opening a new location, renovating or remodeling, expanding your services or offerings, and marketing or advertising your business.
Hotel financing is available in amounts up to $750,000 with terms up to 36 months. You can complete and submit the online application in about 10 minutes, and if approved, you can get access to funds in as little as three business days.
To qualify for a loan from ARF Financial, you’ll need a minimum annual revenue of $100,000 and at least one month in business. ARF does not require a minimum credit score, but its website states the lender considers a variety of criteria, including but not limited to your credit history, when making an underwriting decision.
Direct hotel lenders
Direct hotel lenders lend their own money to business owners looking for funding. These companies specialize in the hotel and hospitality industry and offer their expertise in addition to the opportunity to access capital.
You might consider a direct hotel lender if you’re trying to finance a large project and could benefit from an expert working with you from beginning to end. Not all of these companies provide details about interest rates and qualification requirements on their websites, however, so you’ll want to be sure to clarify that information before proceeding.
Avana Capital
Avana Capital has been in business since 2002, offering specialized financing options for hospitality businesses, renewable energy companies and owner-occupied real estate projects.
Avana offers commercial construction loans, SBA 504 loans, bridge loans, as well as conventional loans. Lending specialists can use their expertise in the industry to help you choose the right financing option and customize a loan offer that works with your needs.
If you need a bridge loan, for example, Avana offers interest-only payments for 12 to 36 months, closings within 10 to 30 days and pre-approval in as little as three days. The lender will also finance up to 75% of the as-complete value (the estimated value post-renovation) of the project.
Access Point Financial
Access Point Financial (APF) is a direct hospitality lender that offers several types of hotel loans, including permanent loans, commercial bridge loans, construction loans, preferred equity loans and mezzanine loans, which consist of a combination of equity and debt.
Because APF only issues hotel loans, it can offer unique financing solutions and a streamlined loan process. This lender also assigns each funded borrower with an asset manager who will work with you throughout the loan lifecycle.
Keep in mind that APF focuses on large hotel investments — the lowest minimum loan amount available is $1 million for branded hotel property improvement plans. For all other hotel loans, the lowest minimum amount available is either $5 or $10 million.
How to qualify for hotel financing
Like any small-business lender, hotel lenders will generally consider similar factors — your personal credit score, time in business and annual revenue — when evaluating your loan application.
When applying for hotel financing, however, lenders will likely also consider criteria that are specific to the hotel industry, such as:
Cash flow. Cash flow is the amount of money you have entering your business, minus the amount of money you have leaving your business at a specific moment in time. Positive cash flow can show that your business is financially healthy and able to pay back any potential debt.
Debt service coverage ratio. The debt service coverage ratio (DSCR) compares your business’s cash flow to its potential debt obligations. To calculate DSCR, you’ll need to divide your annual net operating income by the potential annual debt payments you’d make for the hotel loan in question. Some lenders require a DSCR of 1.25 — a higher ratio is better — it means you have enough money coming in to pay your existing debts.
Loan-to-value ratio. If you’re looking for a hotel loan to finance a purchase or construction project, the lender will calculate the loan-to-value ratio (LTV). This ratio is calculated by dividing the loan amount by the value of the property you are looking to buy or renovate. Commercial real estate lenders will typically offer loan amounts with LTVs that range from 65% to 85%, depending on the type of property and your business’s qualifications, among other criteria.
Net operating income. Net operating income is your hotel revenue minus all necessary operating expenses. This number is calculated pre-tax and doesn’t account for any debt payments, capital expenditures or depreciation. Hotel lenders will use your net operating income to determine how efficiently your business runs.
Revenue per available room. Revenue per available room, or RevPAR, is calculated by dividing the total room revenue by the rooms available. It can also be calculated by multiplying the average daily rate by the occupancy rate. In either case, this number represents the revenue generated per available room, whether or not they are occupied. Lenders may use this industry-specific metric to evaluate the success and growth of your hotel.
Debt yield. Debt yield is your hotel’s net operating income divided by the potential loan amount. This number indicates the return a lender would see if they were to have to foreclose on your hotel from day one. Debt yield helps lenders assess the risk of issuing a loan to your business.
Branding. Hotel lenders may consider the name of your hotel as they underwrite your loan application. If you’re operating under a well-established brand, the company’s reputation may make it easier for you to qualify for financing. Although small or boutique hotels may not benefit from brand reputation, those businesses can look for lenders that specialize in their part of the industry instead of those that typically work with larger brands.
Frequently asked questions
How are hotels financed?
Hotels can be financed with bank loans, SBA loans, commercial real estate loans, equipment loans, bridge loans or hard money loans. You can get these types of financing from traditional and alternative lenders.
How much do you have to put down on a hotel?
Down payments with hotel loans typically range from 10% to 30% but can vary based on factors including how you plan to use the funds, the loan amount and your business’s qualifications. Learn more about how much of a down payment you might need for a business loan.
How long is a loan for a hotel?
Term lengths for hotel loans typically vary based on how you’re using the financing. Large projects, like buying or renovating a hotel, can have terms that range from three to 10 years, with amortization up to 30 years. Working capital loans, on the other hand, tend to have slightly shorter terms, ranging from one to five years.
A version of this article originally appeared on Fundera, a subsidiary of NerdWallet.
Last updated on October 8, 2024
Methodology
NerdWallet’s review process evaluates and rates small-business loan products from traditional banks and online lenders. We collect over 30 data points on each lender using company websites and public documents. We may also go through a lender’s initial application flow and reach out to company representatives. NerdWallet writers and editors conduct a full fact check and update annually, but also make updates throughout the year as necessary.
Our star ratings award points to lenders that offer small-business friendly features, including:
- Transparency of rates and terms.
- Flexible payment options.
- Fast funding times.
- Accessible customer service.
- Reporting of payments to business credit bureaus.
- Responsible lending practices.
We weigh these factors based on our assessment of which are the most important to small-business owners and how meaningfully they impact borrowers’ experiences.
NerdWallet does not receive compensation for our star ratings. Read more about our ratings methodology for small-business loans and our editorial guidelines.
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