Hotel Loan Service Cleveland, OH
The hotel/hospitality business has been on an incline the past several years. Not only is a hotel just a place to sleep but it is an experience in other fashions. Tourism, restaurants, and resorts go hand in hand with hotels. Hotels are having a 6 percent growth in 2018. With this in mind, hotels across the country are being built and renovated at an advanced rate.
Hotel financing consists of acquisition or construction loans. An acquisition loan can be an SBA loan or Conventional loan. If there is an acquisition of several hotels, the loan would need to be conventional. Either way the financing would be amortized on a long-term basis.
For a construction loan hotel owner(s) can be financed 2 different scenarios. In both cases the underwriters look at the projected post-project financials while a lot of lenders look at the hotel’s historical record. The first way is Capital Expenditure (CAPEX)/Fixture Furniture and Equipment Financing (FF&E) which includes:
- Furniture, fixture and equipment for a new construction project
- Hotel renovations
- Company conversions
- Property improvement plans
Financing starts out at $500,000 and goes up to the millions. The loan is amortized from 3-10 years and interest rates around 8.5%.
There are other types of loans available. Flag and Non-flag hotel loans are options. Also, Foreign National Loans are welcome, through Bank Financing. Additionally, Bridge Loans can be used for refinancing, acquisition, or renovation. A Bridge Loan stabilizes the property up to 3 years, until permanent financing takes place.