Best Hotel Financing Loans for 2022

In 2022, there are still many obstacles for the hotel industry, such as a resurgence of COVID-19 at the end of 2021, a hesitant vaccine rollout, and the development of new strains of the virus. It is predicted that travel won’t return to 2019 levels until 2024. Nevertheless, the hotel industry is hardy, and people continue to establish and expand their hotel businesses.

Financially reviewed by Chip Stapleton, Finance Manager, on 9.23.2021

At A Glance — Whether you currently run a hotel business and have plans to increase its size or you want to set up your own hotel, a loan can help you realize your vision. Yet, before you consider applying for a loan, you must be familiar with how hotel financing loans work so you can get the most out of your selected hotel financing loan. Whether your lending demands a reflag, purchase, refinance, covert or the like you will find the information you need on this page. 


A hotel business loan is a financial product category that aims to assist businesses that are a part of the hospitality industry. Hotel loans differ in size and structure. There are also various products available for smaller hotel businesses and large hotel chains. If you are looking at various sorts of hotel loans, you will need to become familiar with the types of loans out there so you can make a knowledgeable decision. 

Best Hotel Financing Loans - Quick Overview

Here is a summary table of hotel financing opportunities for specific financing needs. 

Financing Need

Best Loan Type

Loan Features 

Recommended Lender

Pay taxes, hire new employees, upgrade equipment, finance construction plans, take care of payroll

Merchant Cash Advance

  • Amount: Up to $500,000
  • Term: No set terms
  • Interest: None, one-time factor rate
  • Time to get the loan: As soon as 24 hours

Fora Financial

Improvement, renovation, hiring, and equipment

SBA 7(a) loans

  • Amount: Up to $5 million
  • Term: 10 years for equipment, 25 years for real estate
  • Interest: 7% and lower
  • Time to get the loan: 1 day to 3 weeks


Construction to operation

Term Loans

  • Amount: $5,000 to $50,000 
  • Term: Up to 18 months
  • Interest: 0.4% to 2%
  • Time to get the loan: A few weeks

National Funding

Building purchase, construction, and renovation

SBA Loans

  • Amount: Up to $30,000 - $5 million
  • Term: Seven years for working capital, 10 years for equipment, and 25 years for commercial real estate
  • Interest: Up to 2.75% + prime rate of 5% to 10%
  • Time to get the loan: A few weeks


Invoice-based coverage

Invoice financing

  • Amount: Up to 100% of the invoice
  • Term: Depends on the customer
  • Interest: 0.25% per week
  • Time to get the loan: ~72 hours


Best Hotel Financing Loans Explained

In this section, our experts take an in-depth look at the loan types and recommended loan lenders featured in the table above. 

1. Fora Financial - Best for Merchant Cash Advance

A merchant cash advance loan is not a loan in the traditional sense of the word. It's simply a cash advance that is based on a company’s future credit and debit card sales. 

The lender looks at daily receipts and determines how much the company will be able to repay, plus interest. To qualify, the hotel needs to be operating for at least six months before applying.

Fora Financial offers hotels in need merchant cash advances with no restrictions on use. They also award business owners who can pay off their cash advance faster with early payoff discounts.

No collateral is required to qualify for a merchant cash advance, and there are no set terms for repayment. Hotels can apply for a cash advance between $5,000 and $500,000, depending on how much they earn.

Read the full Fora Financial review for more details.

2. Fundera - Best for Business Acquisition Loan

This loan type is the industry-specific equivalent of a business acquisition loan. It covers everything from hotel improvements and renovations to equipment financing and hiring new staff members. Its structure and payment frequency are very similar to that of traditional loans.

If you're looking for a government-backed loan, SBA 7(a) is the way to go. Standard credits are the most basic loan types. They are beneficial for several reasons, including the amount you are able to get and the length of time of the loan. These loans also give you the option of financing them on a monthly basis.  

For entrepreneurs entering the hotel market for the first time, Fundera is our recommended standard hotel loan choice. Fundera doesn’t require too much documentation so it is easy to apply for funds. They will also get back to you with an answer promptly. 

Read the full Fundera review for more details.  

3. National Funding - Best for Term Loans

Permanent loans are intended for entrepreneurs who want to build their hotels from scratch. You can apply to get funds for construction, and the loan can be transformed into a mortgage once you open your hotel facilities. Instead of using two loan types for construction and operations, you save time and effort by consolidating the two into one.

National Funding is a trustworthy credit company with more than 20 years of business experience. It's considered to be the best option in terms of equipment financing. However, due to its long years of operation and personalized partnership approach, it's suitable for a long-time commitment.

Read the full National Funding review for more details.  

4. SmartBiz - Best for SBA Loans

SBA is a government-backed loan type that's a bit harder to qualify for. You have to meet credit score standards, owner-occupancy requirements, promote public policy, and have operating profit.

You can use SBA loans for the following:

  • Building purchase
  • Construction and renovation
  • Land improvements
  • Equipment purchases
  • Similar debt refinancing

These loans feature fixed rates, higher loan amounts, and lower interest rates.

As a qualified lender, SmartBiz provides a marketplace for SBA loan lenders. Smartbiz has the best credits available. The platform also reviews each credit type. To qualify, you should have a personal credit score of 650 and a business credit score of 150 and above.

Read the full SmartBiz review for more details.  

5. BlueVine - Best for Invoice Financing

With invoice financing, the credit organization or banks provide you with a loan against a future invoice. This type of financing is suitable for those businesses that don't have enough liquid capital. You need a credit score of at least 600 to qualify for this loan type.

Our recommended lender for this loan type is BlueVine. With affordable rates, quick arrangements, and excellent customer service, this credit organization is a great choice for small hotel businesses with big ambitions.

Read the full BlueVine review for more details. 

How Much Does it Cost to Open a Hotel?

If you've been dreaming about owning your own hotel, brace yourself, as you will need a lot of effort, skill, training, and financial investment. Opening a new hotel isn't easy, especially now that Airbnb has disrupted the hospitality industry and COVID-19 has shaken it to the core.

To get an initial idea of what you will be spending, ask yourself the following questions:  

  • Will you be building or buying?
  • Where do you want your hotel to be located?
  • How many stars will your hotel have?
  • What size hotel do you wish to develop?

Below, we give you the breakdown of all the possible costs based on research by the Hospitality Valuation Services (HVS) for a full-service hotel cost "per key" (for one room, from build to finish), which averages at $323,500.

All dollar values are based on average market prices. The percentages you see in the brackets show the ratio of a particular line in the project's total cost.

  • Hard costs and site improvements $255,000 (75%): This category includes everything from land costs to permits, building, engineering, and landscaping. Other expenses include plumbing, finishes, parking, and site improvements. 
  • Soft costs $41,800 (13%): These are the skill-based fees you offer to the professionals like architects, designers, lawyers, and accountants. This category also carries the franchise application costs, land closing fees, taxes, and insurance.
  • Furniture, fixtures, and equipment $29,100 (10%): This line includes the calculations for all types of furniture and fixtures, kitchen equipment, washers and dryers, technology in the meeting rooms, room cards, and other appliances.
  • Pre-opening and working capital $10,700 (3%): Last but not least, you need to collect staff and make some effort to train them in advance. This line is all the funds needed for operating reserves, technical services, recruiting, and purchases.

As you can see, opening a hotel requires a large amount of initial capital. You should also consider amortization over the years, ongoing staff training, and many other current and future expenses, which will help you keep the accommodations up-to-date and avoid larger spendings later down the line.

How Does a Hotel Loan work?

In America, the steps you need to take to apply for a hotel loan are simple. To begin with, you need to complete an application form and wait for the lender to come back with a decision. Once the lender has approved your application, the loan money will be transferred to your business account. You can then use the loan money for different purposes - from establishing to improving your hotel business. Once your hotel business begins to gain momentum, you can start making repayments to the company you loaned from. However, the loan amounts, rates, and requirements can change depending on the lender.

Common Hotel Loan Amounts

The amount of money you can borrow for a hotel loan varies from lender to lender. In the majority of cases, the lender will make decisions according to your current cash flow, the size of your hotel, the purpose of the loan, the number of years your hotel has been in operation, and more. Small hotels may be loaned $100,000 to $1 million while more established hotel businesses may get financing as large as $50 million. 

Hotel Financing Rates

Like the loanable amount, financing rates will vary according to your application and the lender. Expect interest rates to be around 6.5% to 12%. If you wish to apply for a hotel loan from a bank, the financing rate they offer could be lower. However, there may be harsher lending criteria. If you need a quicker and easier approval, you may wish to borrow from private lenders. Yet, you will likely be required to pay higher interest rates. 

Hotel Financing Loan Requirements

Depending on the loan and the lender you're applying for, the requirements will be different. Look for specific instructions to meet your needs.

How to Choose the Best Hotel Financing Loans

Hotel entrepreneurs can choose a business line of credit, bridge loan, working capital loan, credit card merchant cash advance, a second mortgage, or a loan from their retirement account. These are all good loan types for owners of hotels to give thought to. 

There are many different lending program options covered here that you can look into. You should consider the loan of your choice with your certified public accountant and attorney. You should research and look into all payback terms and costs associated with these loans before you sign anything. 

See Our Additional Guides on Industry-Specific Loans

Bottom Line

A lack of funding should not stand between you and your hotel business. In this article, our experts have covered the many hotel financing options available so that you can put your hotel vision into practice. A hotel business loan is a solid choice for hotel owners because it can provide the cash injection that many hotels today require in order to survive. Not all lenders provide the same rates and terms, so invest time and ask the right questions when choosing a loan for your hotel business.