Bed and Breakfast Business Loans Explained
Now, let's have a more detailed look at the loan types and recommended lenders outlined in the table above.
SBA loans offer high capital amounts with low rates. It can be a bit difficult to qualify for an SBA loan and it often takes about two months to get approval.
The Small Business Administration authority ensures up to 85% guarantee on the amount, so the lenders experience less risk. You will, however, need to ensure that your business has enough credibility to be eligible for this loan type.
Your B&B business could potentially use this loan type to buy real estate, undertake renovations, or to deal with any construction needs your business may have (SBA 504/CDC). You can also use an SBA loan to obtain working capital (SBA 7(a)).
Fundbox has years of experience with SBA and small business funding loans in general. Fundbox has a simple automated process available on its platform and minimal documentation is generally required. This lender also boasts short application processes.
Microloans are the smaller versions of SBA loans. If your business is new and has limited credit history, an SBA loan may be the best option for you. Although an SBA loan provides smaller loan amounts, this loan type will get you started and will let you pay back your loan faster.
This loan type may be a good choice for startup B&Bs and smaller establishments with fewer rooms. It can help you get on your feet fast before and later down the track you can qualify for more significant amounts.
Many lenders may be hesitant to lend to new businesses, however, Fundera is generally happy to work with startups. It's easy to start with this company, as the information they provide on their loan types is transparent and straightforward.
B&Bs depend on an influx of visitors in the high seasons. Relying on the capital you earn from these seasons may not always be a viable solution. If you don’t have enough guests during certain months, a short-term seasonal loan may be a great solution.
The key is to apply for a loan directly after high-season, so that you can pay the loan back before your account is drained.
If you need liquid cash during the off-season, a short-term loan can help you stay afloat until the next high-season.
BlueVine's short-term loans are ideal for seasonal businesses. In addition to their competitive rates, they also offer swift money disbursement. If you have a monthly turnover of at least $10,000, have been around for six months, and record a credit score of at least 600, this company is ideal.
Term loans are a good alternative if you're not able to qualify for an SBA loan. Lenders will typically provide a lump sum to what they deem to be riskier businesses. That's why the rates are much higher when compared to government-backed SBA loans. With a term loan you can choose to go with a medium- or short-term option.
These loans are easier to qualify for than SBA loans. Term loans are excellent cash boosts for equipment purchases, facility improvements, and other expenses.
National Funding has been around since 1999 and has helped over 40,000 US businesses, giving out $2.5 billion. National Funding has an excellent track record of solid partnership with its clients. You can generally get the loan in a day, even if you don’t have a great credit track record.
A business line of credit is excellent, as you can draw the needed amount when necessary, and will only need to pay the interest percentage on what you owe. This is one of the best loan solutions for improving working capital.
If you're experiencing issues with current liquid capital, or aren't able to handle seasonal worker payrolls, have low margins, or need a quick repair, this type of loan can help you out.
OnDeck is one of the best commercial mortgage lenders, the company also has a solid track record working with small businesses. OnDeck is typically willing to assist small businesses that are having temporary cash flow trouble.
It is important for a bed and breakfast business to remain top-notch in order to keep attracting customers. However, renovations, construction, and other related costs can run very high. Fortunately, short-term loans can help take care of such expenses and take the business to the next level.
Fora Financial gives businesses the chance to make short-term loans that have flexible payment terms. Quick repayment of the loans is encouraged and businesses that do so get discounts - up to 10c to the dollar off.
Fora Financial was founded in 2008 and has grown to become a trusted and recommended lender to businesses in many different industries. They offer some of the most flexible loan amounts, terms, and requirements in the lending industry. The company also makes applying as simple as possible and available online for a faster process.