Financing Services

Hotel Financing

  Financing Available up to $600M  

Hotel Financing

We accommodate commercial real estate financing intended for buying, refinancing, or constructing hotel properties. Your acquisition may include chain hotels, independently owned hotels, motels, as well as bed and breakfasts. If your start-up hotel or motel does not fall under the umbrella of a recognized chain, then obtaining financing through a traditional bank or financial institution may prove challenging.

We help our clients attain financing for hotel and hospitality purposes. Examples include:

Loans intended for development and/or construction

Loans intended for acquisition

Lines of credit

When planning to qualify for a traditional hotel or motel mortgage, consider the following criteria listed below:

A down payment of approximately 35%

Potential income generation and operational costs

You must prove that income generation from room rentals will suffice, without relying on bar or restaurants located in the hotel

Location of hotel in proximity to city center or tourism spots

The property is in good condition

Obtaining a hotel franchise or a local motel acts as an investment revenue for upcoming years. Contact us to discuss your plans on acquiring a hotel or motel prior to making important decisions.

FAQs

When looking to finance a hotel in Ontario, banks, credit unions, and private lenders are usually the main sources of funding.

The process of financing a hotel typically takes between 30 and 60 days, due to our experienced underwriting and credit administration. This allows us to receive feedback from banks and lenders much quicker than our competitors.

For purchasing a hotel in Ontario, we suggest that buyers have the necessary funds to pay 20-35% of the hotel’s purchase price as a down payment.

In Ontario, operating experience is not always a requirement to purchase a hotel, but it is highly recommended. An alternative option is to hire an asset management company to manage the hotel, however, this will come with management fees that must be taken into account when considering the profit margin of the hotel.

The sale price of a hotel is determined by a variety of factors, such as income, age, property condition, market saturation, and location. These elements all play a role in determining the overall value of the hotel.

When buying a hotel, seller financing or a lease/purchase option may be available, though it is rare. Most buyers opt to get financing from a conventional lender.