Commercial financing for hotels, motels, and hospitality assets across the USA and Canada—structured for acquisitions, refinances, renovations, and repositioning strategies.
Hotel and hospitality financing is a specialized, conservatively underwritten segment of commercial lending. Unlike multifamily properties with predictable leases, hotel revenue is operational and variable, driven by demand, seasonality, pricing, and brand performance, requiring lenders to assess both real estate collateral and operating business cash flow.
As a result, lenders place significant emphasis on:
Eligibility varies by lender and program, but hotel and hospitality financing may apply to:
Hotel owners and investors pursue financing for several strategic reasons, including:
Purchase stabilized assets or reposition underperforming properties for improved returns.
Replace expiring debt with improved loan terms, lower interest, and reduced overall payment risk.
Extract equity when operating performance and valuations support additional leverage.
Finance upgrades to enhance guest experience, revenue, and competitiveness.
Complete all required franchise upgrades and renovations to maintain or secure brand affiliation successfully.
Provide temporary capital during renovations, lease-up, or operational stabilization.
Hospitality underwriting relies on operational performance metrics that differ from traditional commercial properties.
ADR measures average revenue per occupied room, reflecting pricing power, market positioning, and revenue potential consistently.
Occupancy indicates the percentage of rooms filled, showing demand stability, property performance, and management effectiveness.
RevPAR combines ADR and occupancy to show total revenue efficiency and overall hotel financial performance.
Lenders also assess seasonality, competitive set, brand strength, management, financial history, and leverage.
Assess property overview, operating history, and financing goals to determine suitability for hotel loan programs.
Evaluate ADR, occupancy, RevPAR, and cash flow to understand revenue generation and operational stability.
Determine appropriate loan type, including acquisition, refinance, bridge, or renovation, based on property and objectives.
Collect operating statements, P&Ls, franchise agreements, and borrower profile to prepare complete lender-ready application package.
Lender reviews operational metrics, property risk, and management experience before approving financing terms and conditions.
Finalize loan terms, execute documents, and disburse funds to complete financing transaction successfully.