2026 Complete Guide
5 ways to finance a hotel: SBA 7(a) or 504, CMBS or bank mortgages, bridge loans, equipment financing and credit lines. Amounts, rates and timing for each.
Buying or refinancing the building? SBA 504, bank and CMBS options for the real estate itself are in our guide to hotel loans.
Hotels & Hospitality financing
Each serves different hotel and hospitality needs
Best for: Hotel acquisition, major renovation, property expansion projects $500K+
Best for: Stabilized hotel properties with consistent RevPAR and occupancy above 65%
Best for: Value-add acquisitions, renovation repositioning, quick closes before permanent financing
Best for: HVAC systems, commercial laundry, kitchen equipment, fitness center, AV systems
Best for: Seasonal cash flow gaps, marketing, staffing, event inventory, off-season expenses
Side by side
| Loan type | Amount | Rate | Term | Approval |
|---|---|---|---|---|
| SBA 7(a) / 504 Loan | $100K–$5M | 6.25–11.5% APR | 10–25 years | 30–90 days |
| CMBS / Commercial Mortgage | $1M–$10M+ | 6.5–8% APR | 5–10 years (25–30 amort.) | 30–90 days |
| Bridge Loan | $500K–$10M | 6.25–13% APR | 6–36 months | 10–30 days |
| Equipment Financing | $10K–$500K | 6.5–20% APR | 2–7 years | 1–5 days |
| Business Line of Credit | $25K–$500K | 8.75–45% APR | Revolving | 3–14 days |
Typical ranges, updated September 2026. Your terms depend on your revenue, credit, time in business and the lender.
Worked example
A seasonal hotel earns its year in a few months and pays fixed costs in all twelve. Example: a hotel whose operating costs, debt service included, run $220,000 a month, with revenue of about $160,000 a month in four slow months and well above costs the rest of the year. Assumptions for illustration only.
| Amount | |
|---|---|
| Monthly costs, including debt service | $220,000 |
| Revenue in each slow month | $160,000 |
| Shortfall per slow month | −$60,000 |
| Cumulative shortfall over four slow months | $240,000 |
That is the size of line of credit — or cash reserve — the hotel needs, repaid from peak-season surplus. Lenders read the trailing 12 months month by month for exactly this pattern, and franchise PIP deadlines or FF&E reserves can add to it. For buying or refinancing the hotel itself, see our hotel property guide, which sizes the loan from RevPAR.
FAQ
Common questions about hotel and hospitality financing
Hotels can access SBA 7(a)/504 loans (6.25–11.5% APR), CMBS commercial mortgages for stabilized properties ($1M+), bridge loans for acquisitions and renovations (6.25–13% APR), equipment financing for FF&E, and business lines of credit for seasonal cash flow. The right option depends on loan purpose, property size, and occupancy history.
Add up the monthly shortfalls in the slow season. A hotel with $220,000 of monthly costs and about $160,000 of revenue in each of four slow months falls $60,000 short a month — $240,000 in all — which peak-season surplus then repays. Lenders read the trailing 12 months month by month.
CMBS loans are fixed-rate mortgages (7–8% APR) securitized and sold to investors. Available for stabilized hotels with consistent occupancy above 65% and strong RevPAR. Loan amounts start at $1M with 25–30 year amortization. Non-recourse options are available. Prepayment penalties apply.
Bridge loans provide short-term capital (6–36 months) for value-add acquisitions, renovation repositioning, and quick closes before permanent financing. Rates run 6.25–13% APR. Lenders require a clear exit strategy — typically a refinance after stabilization or property sale.
Yes. Independent hotels are eligible for SBA 7(a) loans up to $5M and SBA 504 loans for real estate purchase. SBA sets no minimum time in business, though lenders look for hotel operating experience, 680+ credit and demonstrated NOI. SBA 504 works for hotel real estate with at least 15% down — hotels are special-purpose property under SBA rules (20% for a business under two years old).
Business lines of credit ($25K–$500K) are ideal for seasonal hospitality — draw during slow periods, repay during peak season. Equipment financing covers off-season renovations fast (1–5 days). Plan financing 60 days before slow season begins.
CMBS and conventional commercial mortgages typically require 65%+ occupancy for 2+ years. SBA loans are more flexible and evaluate overall business cash flow. Bridge loans are designed for sub-stabilized properties and can close at lower occupancy during renovation.
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