Know Your Needs: Choosing an SBA Loan Program for Your Hotel Project

As a hotel executive, you know better than anyone the need for financing. It’s how you purchase real estate or new equipment, refinance debt, and ultimately secure the stability and future of your business. If you’re planning to finance a project for your hotel this year, or are considering a refinance, then you may have discovered the many programs the U.S. Small Business Administration, or SBA, offers to assist hotel owners like you.

However, when you’re busy with the day-to-day responsibilities of running your hotel business, it can start to feel overwhelming. What you may not realize is that SBA loans can be tailored for your specific situation, and one loan can combine several projects. 

One way to get started is to understand the differences between conventional small business loans, and SBA-guaranteed loans. A conversation between an SBA-approved lender with hotel industry expertise and your company’s decision-makers will be the most helpful way to decide which loan product to choose. But in the meantime, consider these quick facts about the SBA’s most popular hotel financing option: the SBA 7(a) Loan. 

SBA 7(a) Loan

In many respects, the SBA 7(a) Loan can be considered the “everything” loan, as business owners can roll all of their needs into one loan. For instance, do you need to refinance, purchase equipment, and get a line of credit? You need a 7(a) Loan: just one loan, one monthly bill, one interest rate — one product to accomplish everything you need to keep growing. 

The SBA 7(a) Loan provides businesses with capital to start, acquire, or expand a small business. This includes funding to purchase new equipment, refinance existing business debt, or deliver long-term working capital. SBA 7(a) Loans can also be used to purchase a new hotel or make renovations to an existing property. With longer available terms than a conventional loan, SBA financing is an excellent way to improve monthly cash flow and free up capital to use for other opportunities. 

Key Features and Benefits

Fixed and variable rates available

Terms available up to 25 years

Up to 90% loan-to-value (LTV) allowed

Whether you choose an SBA 7(a) loan or a conventional financing solution, it’s all about finding the right balance to meet your unique needs. Taking on a new hotel project can be an overwhelming task, but finding financing doesn’t need to be. A conversation with an experienced lending professional is the best way to understand the nuances and find a tailored financing solution that is right for you.

Ready to get started? Visit www.northeastbank.com/hotels ­­­to learn more about our 30-plus years of experience in financing hotel projects like yours. 

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