Hospitality is a big industry. People like to travel, and when they do, they need somewhere to sleep. That’s where hotels come in. The right location, the right combination of amenities, and the right staff can make a hotel a big winner for its owner. Maybe you currently own a hotel and are looking to expand, or maybe you’re an entrepreneur with a passion for providing guests with a superb travel experience. If you fit into either of those categories, you can take advantage of hotel financing to achieve your goals.

What It Can Do for You

There are a lot of options for financing these types of projects, and they can provide you with the funds that you need for a variety of purposes. To obtain the loan, you’ll need to have a plan laid out for the lender so that they can know your intentions. You might be a good candidate for hotel financing if you need the funds to renovate or purchase an existing hotel, obtain equipment or fixtures, build a new hotel or purchase land for a new project. For now, though, we’ll be focusing on the best loan types for obtaining new properties or expanding.

Buying an Existing Property

If you’ve got your eyes set on an existing hotel, your best options for financing are going to be either an SBA 7(a) or 504 loan, or a traditional bank loan. Either of the SBA loan types is sponsored by the government and therefore has a very complex and demanding application process, but often comes with more favorable loan terms and interest rates. You’ll typically get up to $5 million with the SBA 7(a), and up to $14 million with the SBA 504 loan.

Building a New Property

Getting financing for new construction can be very difficult since there is no directly applicable history to back up your application. You have the fewest sources from which to obtain this type of funding, either a traditional bank loan or working with an investment company or private lender. Any of these lenders will want to have strong business plans to review and will be more likely to approve your application if you have a history of business success, especially in the hospitality industry.

Breaking into the hotel business can be very intimidating, particularly if you intend to open or purchase a hotel. However, if you’re not afraid of planning and doing some research, hotel financing can help you achieve your goals.