Top 5 Hotel Financing Companies

  • March 23, 2022

Are you a small business owner or someone who is interested in building your own hotel and looking for hotel financing? Well, you’ve come to the right place. Below are some of the top hotel financing companies in the United States. Each company has its own benefits, so make sure you know what you are looking for before you choose a company to partner with. 

When it comes to financing for lodging and hospitality, such as hotels, you might run into more challenges than you expected. Remember, the property is your business. With hundreds of moving parts, it can be difficult to understand what needs to be done on your own. That is why you need assistance from an experienced hotel financing lender. Keep reading to find the right one for you.

Top Hotel Financing Lenders

Here are five of the best hotel financing companies to consider when seeking financing for your venture.

1. AVANA Capital

For more than 15 years, AVANA Capital has been the premier nationwide hotel financing company that understands your success is its success. Our team has many years of experience in hotel lending and financing and will work with you every step of the way to make sure you are educated on all the decisions you make when it comes to choosing the right loan product. Once you have identified the right loan for you, AVANA Capital will guide you through the process of underwriting all the way through closing. 

What sets AVANA Capital apart from the competition is that our team will work with your contractors, engineers, and vendors to ensure your project is completed in a timely manner upon closing. Additionally, if you currently have a hotel and you continue to hold debt or need PIP financing or even if you are looking to reposition your hotel or acquire a one, AVANA Capital has programs available to help you. Whether you’re interested in a brand conversion, topline play, or an expense compression plan, AVANA Capital can help.

2. TMC Financing

TMC Financial prides itself on being the number 1 SBA 504 hotel lender in the United States. In their time financing hotels, they have financed projects in excess of $25 million in total project costs. This is because the 504 program does not have a maximum loan amount. With TMC you are able to finance multiple projects at a time while paying as low as 15% down at the beginning of your project. You can use the funds they provide for the construction, renovation, furniture, and equipment. If you are a franchised hotel or even an independent hotel you qualify for their programs. 

3. Hall Structured Finance

Hall Structured Finance is a hotel financing lender that provides capital for ground-up construction, adaptive reuse, and major asset repositioning for commercial real estate projects across the United States. Their small team of knowledgeable real estate and finance professionals offers unique programs tailored to successfully meet your business’ capital objectives. 

Since 1995, Hall Structured Finance has adjusted its programs to adapt to the ever-changing real estate industry. Their current focus has been on providing you with non-recourse first lien construction and asset repositioning financing. By offering you non-recourse terms companies with flexible underwriting standards, creative loan structures, and quick execution, Hall Structured Finance is dedicated to achieving your goals.

4. Arriba Capital

With over 100 years of combined experience, Arriba Capital strives to provide you with the highest-quality customer service. Their team of seasoned real estate financing professionals offers you a comprehensive suite of resources with tailored programs to achieve your business’ goals. 

Arriba Capital’s services include asset management, investment banking, capital markets services, and advisory solutions. Additionally, they will work hand-in-hand with you to completely understand what your business needs. This will allow you both to understand expectations and create a relationship based on trust.

5. PMC Commercial Trust

PMC is a nationwide direct lender that has provided thousands of loans to businesses throughout the United States. Using the Small Business Administration 7(a) government lending program as well as conventional practices PMC is able to craft unique loans to achieve your business’s goals.

Due to their years of experience and exceptional track record, PMC has earned the distinction of being an SBA Preferred Lender. This allows their team of professionals to quickly approve and close loans while providing you with a complete personalized service. It is important to note that since PMC is not a bank you can choose where to deposit your funds.

Qualifying for Hotel Financing Options

No matter which hotel financing lender you choose, there are a few factors you need to consider to ensure you qualify for the right loan. We’ve highlighted some of these factors below to help you get started: 

Debt Yield

Hotel financing lenders have to prepare for the worst, even before they offer a loan. That’s where debt yield comes in. Debt yield is calculated using a hotel’s net operating income divided by the potential loan amount. Hotel financing companies can understand the return they may receive should they need to foreclose on your hotel for any reason. 

Net Cash Flow

When applying for a loan, it’s essential that you maintain clear and updated records on how much money is flowing in and out of your hotel at any given time. Lenders use this net cash flow to determine what your hotel’s payment may look like on a given loan. 

Loan-to-Value Ratio

Though hotel financing lenders may not always monitor your loan-to-value (LTV) ratio, commercial real estate lenders very often do. A lender such as Hall Structured Finance will calculate your LTV ratio using the loan amount divided by the appraised property value. 

Revenue Per Available Room

Revenue per available room (RevPAR) is the calculated number that informs a hotel financing company how efficiently you run your hotel. Your RevPAR will inform a lender if your business is profitable and if you’ll be able to pay back the potential loan. 

Hotel Brand 

Many hotel owners forget one key factor when it comes to loans — their hotel brand. The truth of the matter is that hotels operating under a highly-recognized brand are more likely to receive loan approval. Smaller hotels may need to provide additional information to verify that they can pay back the given loan. 

AVANA Capital has been serving business owners and entrepreneurs just like you for over 20 years. Our highly skilled team of hotel financing lenders will use their expertise and industry knowledge to find the best loan product for your goals. 

For more information on hotel financing and tailored lending solutions contact AVANA Capital to find the right loan program for you. The market is always evolving, and we keep up with those changes to ensure you have the best loan experience possible. Let us help you achieve your dreams with fast, flexible, and reliable financing. Get funded today with AVANA Capital!