What is hotel financing?

hotel room
hotel room

Hotel financing is a type of commercial mortgage designed to fund a new hotel, guest house or B&B project or to reinvigorate or refinance an existing one. This type of finance is specifically intended to meet the particular needs of hoteliers and hospitality businesses.

While it is possible to obtain a commercial mortgage for hotel financing from a traditional bank, hotel finance is best sourced with the help of an experienced hotel finance broker with access to exclusive rates from the whole market.

The hotel and wider hospitality industry is fiercely competitive yet highly rewarding for those with the qualities lenders are seeking, so it pays to prepare an application for hotel financing with expert guidance.

How does hotel financing work?

Hotel lenders will only consider the most robust hospitality business opportunities, and there are strict criteria that govern the hotel financing application process.

Anyone seeking hotel finance, whether they are new to the industry or a seasoned hotel operator, will need to submit detailed forms regarding their hotel business and business plan, their experience in the sector, as well as their plans for the loan and how it will be repaid. While experience in the hotel trade is a definite plus when seeking hotel finance, it is entirely possible to secure a commercial mortgage for a hotel business as a new to trade hotel buyer.

In most cases, lenders will look for a deposit of 30% or more, additional security, a solid business plan, a good personal credit rating and three years of trading accounts from the loan applicant and the hotel vendor.

When a hotel financing application is made via a specialist broker like Stewart Hindley, these criteria are put to specialist lenders from across the whole market with whom the broker has established years of positive rapport. It’s the job of a hotel finance broker to not only help the applicant create the most attractive business opportunity, but to seek out the most suitable lenders on their behalf.

Securing hotel finance

At Stewart Hindley, we have refined an expert approach to assisting both experienced hoteliers and those new to the trade in securing hotel financing. Our specialist team can guide you through the complexities of building a strong hotel finance application, before identifying the best potential investors and obtaining the best market rates.

Get in touch today to find out how we can help you acquire the hotel finance you need to turn your hospitality vision into reality.

Stewart Hindley
Specialist financial experts helping you secure commercial loans across the hospitality, leisure and commercial property sectors.

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