Best Hospitality Financing and Business Loans Explained
As we can see in the table above, each loan type caters to a specific need. Let's go through all five loan types in more detail.
With this loan type, you can do just about anything: renovate, expand, use it as working capital, refinance other debt, and much more. These are some of the most straightforward options given out by banks and financial organizations. Hospitality term loans are affordable and provide the most extended payback periods.
Term loans can help you acquire new business assets or refurbish and improve the ones you have. They are versatile and can help any commercial use case, including other loan repayments, working capital, and staff training expenses.
Our experts recommend Credibly for your long-term business loan needs as they offer a low APR and longer payback periods. Their business expansion loans are also perfect for renovations and can act as a down payment when expanding your business to a new location. Credibly also stands out from the competition as they strive to provide small and medium-sized businesses with flexible financing solutions that are suited to their particular needs.
A line of credit applies to any spending you can think of. Although it's as versatile as the aforementioned hospitality term loan, once you have the line of credit you don’t need preapproval or due diligence for each new expenditure. You can just enter your account and use the available funds on demand.
It's not as large as the term loans, and the repayment period is not as long. But this loan type can help you out if your business meets unforeseen situations and needs emergency funds.
Applying to Fundbox is as easy as registering on their site and connecting your accounting program. Once you're done, an estimated line of credit will display, and if you like the terms you can access the funds with no collateral.
The hospitality industry is a costly one that often sees businesses requiring some financial assistance at one point or another. While traditional loans can help out, short-term loans are more preferable as they are easier to get and pay off quickly.
Hospitality businesses that wish to expand or simply ensure there is always cash at hand for emergencies often run into difficulties with banks and other big lenders. Requirements can be very strict and repayment difficult to realistically maintain. Collateral can also be necessary for loan qualification.
The short-term loans that Fora Financial makes possible are really easy to apply for and the repayment terms are flexible. Unlike other loans, these can be repaid in 15 months and if repaid quicker, the lender gives companies discounts as a reward. There is also no need to provide collateral.
Small Business Administration loans, or SBA, are government-supported risk reduction programs covering startups of any kind. While the SBA is the program initiator, the organization doesn't pay the funds but guarantees risk mitigation for the lender.
These loans can cover real estate purchases, renovations, and building construction expenses. Many businesses in the hospitality sector need such investment to boost their initial capital or expand their business.
SmartBiz is an online marketplace for the best SBA loans. Depending on lender requirements, this platform can match you with the best lenders, which is quicker than approaching banks manually.
Invoice financing is a quick invoice-based loan that can cover expenses until the business gets the full payment. It usually acts as a working capital emergency loan that is repaid in a short period of time.
If your hospitality industry establishment gets a large booking that needs extensive preparation and many expenses, this type of credit can help you cover your expenses.
BlueVine is an excellent option for hospitality industry businesses who wish to get cash advances. BlueVine is generally quick to approve loans and offers affordable rates, plus you will likely receive excellent customer care.
Equipment loans are straightforward. You have two types of loans in this category: one allows you to buy the equipment with a down payment, while the other is designed to provide you with money to lease equipment. Most of the time, these loans require collateral, which, according to most contracts, is the machine or equipment itself.
Whether you need to buy stoves and ovens for your restaurant, purchase laundry machines for your B&B, or acquire a new ride for your theme park, this loan is perfect for you.
LendingClub is most notable for its agriculture loans. However, it can provide many other funding types depending on your needs, business size, and the goal you want to accomplish. Equipment loans are one of them.