uying an existing hotel is chains are just about out of luck
a great business venture – these days. Even with the brand
so is building one. People name, however, there are still a
are always in need of a place to couple of other major hurdles
stay that is comfortable and has that may stand in the way.
a pleasant atmosphere and other
features nearby. Getting a hotel The hotel to be purchased also
loan is an important step, even needs to be in a good state of
necessary in order to get your repair. Beyond its overall
new business going. Here is what condition, though, it also has to
you need to know about hotel be attractive in appearance. This
loans to get you started. assures that its current rate of
business can continue - or even
The first thing you need to know possibly increase – without
about hotel loans is that they needing a separate loan for
are not easy to obtain. While renovations. As you can see, many
this may sound a little negative, lenders may not provide a
you do need to know that most commercial loan for new hotels.
lenders will not lend for the
purchase of a hotel unless it A third qualification is that the
meets some rather strict hotel needs to show that it has
qualifications. had a good profit over the past
couple of years. So, the books
The Qualifications will need to be closely examined
to make sure the hotel has been
Most lenders, whether direct or doing well – with the hopes that
brokers, will require that the it can continue to do so. Apart
hotel come under the "flag" or from a past history of success,
name of a major hotel chain. you will find it difficult to get
Independent hotels, and small this kind of commercial loan - at
least at a good interest rate. Being that it is a commercial
There will probably be a minimum loan, the interest rate is
requirement of a profitability of usually a little higher than a
1:1.1 or more, DSCR values. residential loan. In fact, it is
possible that a hotel loan will
Personal Qualifications have a slightly higher interest
rate than even other types of
The building itself, and the commercial loans. Also, do not
business, is not all that will be expect a 100% loan in most cases,
considered when you go for a although some hotel loans will
hotel loan. The buyer's own provide that much. Typically, you
personal experience in the hotel will find that most range between
business will also most likely be 70 to 80%, or so.
questioned. A number of
successful years experience, as a The payment terms will provide an
hotel manager may be needed, too. average range from 20 to 25 years
Some lenders will not lend to in most cases, but it may
someone unless they are going to amortize in more than that –
be both the owner and the meaning you need to make a
manager. Others may require that balloon payment at the end. You
a proven manager will be brought can find your hotel loan at most
in to manage the hotel. commercial lenders’ Web sites.
Values start out somewhere around
Loan Terms $250,000 and go upwards – enough
to cover most existing hotels or
The terms for hotel loans, like build new ones.
any other kind of loan, varies.
About the Author:
SNC Commercial Loans has been in the commercial loan industry for years. They are a direct lender that accepts 1003 applications. Learn more about hotel loans here.
Read more articles by:
Eric Morgan
Article Source: www.iSnare.com 
