Bridge Payday Ultimate Guide: Hotel and Motel Loans
What is a hotel loan?
A motel loan or hotel is a kind of commercial mortgage that holds an exclusive category of hospitality properties.Â Other types of hospitality properties exist, like hotels, bed and breakfasts, and RV parks, and they could necessitate commercial financing.Â The borrower can obtain a hotel or motel mortgage for many reasons, including the following:
- To help finance a purchase at a hotel
- Refinance a hotel
- Refinance to obtain cash from the property
- Help fund the construction of an entirely new hotel
- Remodel or renovate and/or rehab
- Development and acquisition
- Reposition the property on the market
Why should I get a hotel or motel loan?
The majority of people who borrow loans for hotels when they wish to buy a hotel, or refinance a mortgage on a hotel the existing one.Â While many hotel mortgages belong to these two major categories, there are a few particular reasons to take a Bridge Payday loan from a hotel that includes:
- Reserve capital for other purposes
- Supplement available cash
- You can get hotel bridge financing until permanent financing is accessible
- Set the property up to be profitable
- Stabilize a distressed property
- Large projects require special financing arrangements such as bridge loans, mezzanine, and joint ventures
- Refinance a term loan that is due to expire
What is a motel or hotel cash advance?
Hard cash loans for motels and hotels are provided by private lenders or non-bank lenders and offer several advantages, such as speedy cash-out (just one or two days up to several weeks) with lower LTVs and need less paperwork from the lender than a bank might require.Â These loans are usually repaid over only a few years and have higher rates of interest than conventional hotel loans.Â These loans are based on equity which means that LTVs between 50% and the 65% range are common.
What is a hotel construction loan?
While they’re not as popular as other kinds of hotel and motel mortgages Construction loans can be obtained by borrowers looking to construct a new motel or hotel. The terms for hotel construction loans can differ based on the circumstances of the borrower however, you can find the most common types of construction loans here:
- SBA hotel construction loan
- USDA B& I construction loan
- Cash-out or bridge loan to renovate a hotel or motel
- Cash-out or bridge loan to fund the reconstruction of a deteriorating motel or hotel
- 30- to 60-month loan while in construction
- Construction take-out loans
- Construction to financing for a long time