Get an SBA Loan to Construct, Remodel, or Reimagine Your Hotel.

Have you considered upgrading or expanding your hotel? SBA loans can be beneficial. Contact us for a free estimate to understand how we can help you achieve your hospitality goals.

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What Are SBA Loans?

SBA loans are financing backed by the U.S. Small Business Administration (SBA) to help small businesses get funding.

Types of SBA Loans

  • SBA 7(a) loans: This is the most versatile option for various business needs, from starting up to expanding.
  • SBA 504 loans: Exceptionally well-suited for financing significant fixed assets, such as real estate.

The Benefits of SBA Loans

  • Favorable terms: SBA loans have lower interest rates and longer repayment terms than business loans.
  • Reduced lender risk: The SBA guarantee makes lenders more comfortable offering financing to small businesses.

Who Qualifies for SBA Loans: A Quick Look

FeatureSBA 7(a) LoanSBA 504 Loan
Business TypeFor-profit Hotel BusinessesFor-profit Hotel Businesses
LocationOperate in the U.S. or its territoriesOperate in the U.S. or its territories
SizeMeet SBA size standards for your industry (check the SBA website)Meet SBA size standards for your industry (check the SBA website)
Credit HistoryA good credit history is preferred, but an SBA guarantee helpsA good credit history is preferred, but an SBA guarantee helps
Business PlanViable business plan demonstrating the ability to repayViable business plan demonstrating the ability to repay
Loan UseWide range of needs: working capital, equipment, real estateFixed assets: real estate, land acquisition, major renovations
Maximum Loan Amount$5 millionNo maximum (higher limits for green projects)
Down PaymentVaries depending on the lenderTypically 10-15%
Repayment TermUp to 10 years (longer for real estate/equipment)Up to 25 years

When you might choose an SBA 7(a) loan for your hotel business

  • Flexible Financing: This loan can cover many needs, from renovations and equipment purchases to refinancing existing debt.
  • Competitive Rates: SBA guarantees a portion of the loan, often leading to lower interest rates than unsecured business loans.
  • Longer Repayment Terms: Compared to traditional loans, SBA 7(a) loans offer more breathing room to repay the loan.
  • Increased Approval Odds: The SBA guarantee makes it easier for some businesses to qualify, especially those with a newer business or imperfect credit history.

When you might choose an SBA 504 loan for your hotel business:

  • Focus on Fixed Assets: Hotel finance is possible because real estate, land, and significant renovations have long-term value.
  • Higher Loan Amounts: 7(a) loans cap major projects at $5 million, but SBA 504 loans do not better financing for “green” energy-saving remodeling.
  • Favorable Down Payment: SBA 504 loans require a lower down payment than traditional commercial mortgages, typically around 10% to 15%.
  • Long-Term Stability: These loans have fixed interest rates and 25-year repayment durations, making hotel budgeting and cash flow predictable.

SBA Loan Document Checklist: At-a-tance

CategorySBA 7(a) LoanSBA 504 Loan (May include additional requirements)
Business Information
  • Business Plan
  • Tax Returns (personal & business)
  • Business Licenses & Permits
  • Financial Statements
  • Business Plan
  • Tax Returns (personal & business)
  • Business Licenses & Permits
  • Financial Statements
Ownership & Management
  • Resumes of Principals
  • Personal Financial Statements (owners with 20%+ ownership)
  • Resumes of Principals
  • Personal Financial Statements (owners with 20%+ ownership)
Loan Purpose
  • Quotes/Invoices for Equipment/Renovations (if applicable)
  • Proof of Purchase Agreements (if applicable)
  • Real Estate Appraisals (if applicable)
  • Construction Bids/Contracts (if applicable)
Collateral
  • Documentation for any pledged collateral (e.g., property deeds, titles)
  • Same as 7(a) Loan + Documentation of Real Estate Asset (if applicable)
SBA Forms
  • SBA Form 1919 (Borrower Information)
  • SBA Form 413 (Personal Financial Statement)
  • (Additional forms may be required)
  • Same as 7(a) Loan + SBA Form 160 (Loan Participation Agreement) (Potentially more)

Why Choose Us for Your Hotel Financing Needs?

At Hotel Loans, we understand the unique challenges faced by hotel businesses in securing financing. Our team of experts will work with you every step of the way to customize an SBA loan solution that meets your specific needs. From flexible repayment terms to competitive rates and increased chances of approval, we are the premier destination for tailored financing solutions. Contact us today to get started!
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