What are Hotel Loans
A commercial loan is a form of debt-based funding arrangement that takes place between a business and a bank. Used for funding major capital expenditures and other expenses or operational costs that the company couldn’t afford, commercial property finances are the best option. Under a commercial land loan, the bank issues the loan to the borrower where the borrower needs to pay back the principal loan amounts, interest, or any other applicable fees within the mentioned time duration.
At Custom Mortgage, all our commercial loans services are backed by a team of specialists who have years of experience in the commercial property financing industry.
Hotel LoansHotel loans can be easily acquired from Custom Mortgage. As real estate markets transform and the economy begins to improve, the hotel industry has been improving and lenders are looking to provide loans to qualified borrowers. Hotel financing is dependent on the location and historic income of the hotel or motel. With the many programs available to our borrowers, there is always a loan solution that will best for your scenario. We provide financing for both flagged hotel “franchised” and non-flagged hotel “independent” hotel/motel” so if you are a hotel owners and are looking to obtain the best loan financing, contact us today!
Other Hotel Financing Solutions
Merchant Cash AdvanceMCA products are also available if you accept credit cards and have the ability to provide evidence of your monthly processed transactions. These loans tend to be more expensive and are a based on a percentage of your total credit card amounts that are received. Merchant cash providers will lend on historical credit card sales information. Merchant cash is a short term financing solution but can be processed very fast so businesses have quick access to funds. Hotel owners can use MCA funds for any purpose they desire such as remodel or equipment purchases.
Seller Carry Financing on hotel purchasesHotel purchase transactions may use seller carry back financing to complete the purchase. The seller loans back a percentage of the transaction amount and normally will hold a second deed of trust behind the main lender. Seller financing is a common part of hotel and motel purchases. If you are considering purchasing a hotel property, we are able to help you coordinate a seller carry back loan.
- Revenue Per Available Room (RevPAR) – Hotel’s Average Daily Rate (ADR) multiplied by Occupancy (OCC). This also takes into consideration the historic income of the property
- LTV – Loan to Value of proposed property for the transaction
- DSCR – Debt Service Coverage Ratio is calculated by dividing the Net Operating Income (NOI) by the Total Debt Service (requested loan annual payment)