It’s not an unknown fact that hotels and motels are a few of the most rewarding and the most lucrative businesses in the industry. This is the reason why thousands of people fix their credit in an attempt to apply for hotel loans. But what are hotel loans exactly? How well do you understand what these types of loans are? And if you understand it, do you know where the best place is to get one?
That’s what we’ll be discussing today! As a bonus, we’ll give you tips on where you can get the most value if you’re looking to apply for a hotel and motel loan!
What are Motel and Hotel Loans?
You’ll easily be able to understand what they are just from their term alone. For the benefit of everyone, including those who are new to the industry, a hotel or motel loan is a type of loan that utilizes a hospitality property as collateral.
Just because it’s tagged as “motel and hotel loans” doesn’t mean that those are the only establishments you could build and construct. As a matter of fact, you can also use this type of loan if you want to finance the construction of any of the following:
- Bed & Breakfast Lodging
- Theme Parks
- Ski Hotels
- 1 to 5-Star Hotels
- And Many More!
So long as the property you’ll be financing is for commercial and leisure purposes, you can definitely apply for hotel loans!
What Can You Use Hotel Loans For?
So, would a hotel loan just be limited for the purpose of constructing or building a hotel? Or can an individual or an entity use it for other reasons as well?
The latter is correct and in fact, getting a hotel loan can also help you with another thing in relation to a hospitality property, such as rehabilitation or renovating a property; financing or funding of a hotel purchase; funding the construction or the building of a new motel or hotel; acquire and develop a property; and many more!
Why Get Hotel Loans?
Let’s say you are a wealthy person and you plan on starting up a resort. You have all the necessary funds to start it – but why should you still get a hotel loan?
The main reason for that is business. Even if you’re a millionaire, you wouldn’t just shell out amounts upwards of $1M to build something, right? And you wouldn’t do that because of the risk that it has. Whereas getting a loan from it would allow you to save up the money you can let out for capital for other things and developments.
While the situation we gave as an example isn’t usually what the case is, here are other reasons why people apply for hotel and motel loans:
- To be able to stabilize an already distressed property
- To gain hotel bridge financing until a permanent one is available
- To be able to refinance smaller and expiring term loans
- To reserve and put away funds for other types of investment
- To fund large projects that would need financing arrangement
- And many more!
Is a Hotel Loan Similar to a Hard Money Loan?
A lot of people have the misconception that the two (2) terms are the same. However, they are not. They’re two (2) different classifications that can be used with each other. For instance, if you’re building a hotel and you suddenly run out of cash, you can take out a hard money loan for it.
Therefore, it already becomes a hard money hotel loan – you got it quickly and your credit score wasn’t a big deal, and you’ll use it for a hospitality property!
Basically, a hard money loan is a loan that is usually secured by a real estate property. It’s dubbed as a “hard money loan” because of the fact that it’s hard to pay back than soft money loans. If you’re building a real estate property, the chances of you being approved of a hard money loan are high because lenders wouldn’t put too much focus on your credit score.
What they’ll be looking at is what you’ll be using the money for.
Where Can I Get a Valuable Hotel Loan?
The right answer is not the bank because banks wouldn’t usually give out funds that would be able to fund or finance a hotel loan. You can approach the SBA, but you need to be patient as their approval rate is long. So, the best option would be to approach a real estate loan group or a private lender.
If you reside here in Florida and you’re looking for funding for your hotel or your motel, you can grab the opportunity to work with us here at Florida Commercial Real Estate Loan Group.
We have been the best and the most trusted loan provider in all of the state. Garnering trusts from entrepreneurs, businessmen, and land developers in and around Florida. For many years, we’ve provided all our borrowers with the amount they wished for – and we always gave them chances to pay their loans off flexibly.
Our Hotel Loans
Unlike other financing companies, Florida Commercial Real Estate Loan Group will never short you of the amount you need. For instance, we can allow you to borrow up to $1 million of hotel loans, with the best and the most considerate interest rates.
With accommodating repayment terms and schemes partnered up with the best and the lowest interest rates, you would really not have anything to regret!
So, what are you waiting for? Give us a quick shout here at Florida Commercial Real Estate Loan Group and get a free computation of the hotel and motel loan you’re applying for!
Yes, you read that right – we can give you a sample computation of the loan so you can assess if you’ll be able to comply and abide by it!
Reach out to us via our email or our hotline and get the most value for the hotel loans you need!
We service all counties and cities throughout South Florida. However, if you need any of these services in other cities throughout the state of Florida, please contact us. See what services we offer below: