Top 3 Financing Options for Hotels
Financing your business is an absolutely vital step for any business to maximize growth, and this is especially true in the hospitality industry. Since customer satisfaction is of utmost importance, hotels frequently need to provide new services or experiences to keep up with travel trends. New kinds of technology are being developed for hotels, and these upgrades come at a very high price. Through hospitality financing, your business will be empowered to keep up with the times. Here are the 3 best options for hospitality financing.
Hospitality-Specific SBA Loan
SBA loans are a fantastic financing option for nearly any small business. If your hotel is relatively small in scale, then you may be able to qualify for this amazing opportunity. SBA loans run through the Small Business Association, which agrees to cover any possible losses a lender could take through the transaction, making this type of loan incredibly safe. SBA loans for hotel financing have especially good rates, ranging from 5-8 percent over the course of anywhere from three to twenty-five years. Unfortunately, collateral is required for SBA Loans, which could be difficult for some hotel operators.
Hospitality-Specific Unsecured Line of Credit
Are you unable to provide an asset to be used as collateral for an SBA or asset-based loan? In that case, an unsecured line of credit may be a great choice for you. Unsecured loans for your business do not require an asset to be used as collateral and instead rely entirely on the credit score of the business owner. This allows for a much simpler application process for those with good credit, and also makes sure no assets are risked during the transaction. Unfortunately, if your credit score is under 700, unsecured loans may not be available.
Hospitality-Specific Term Loan
Are you interested in a large loan for which to use for an acquisition of land or assets for your business? If so, then a term loan may be what you are looking for. Term loans are popular in the hotel financing industry because they have the longest terms available. These are great for situations that require an incredibly long payback period. They are also popular due to their fairly competitive rates of 5-15 percent. Terms for these loans can last up to 30 years.
These are the 3 most popular financing options when it comes to hospitality financing. By properly financing your hotel business, you will make sure to keep up with all the travel trends and keep your customers coming back for more. These investments can be expensive, but with hotel financing, you can empower your business to stand out from the competition.
