How To Finance Your Hotel Acquisition

Uncategorized Feb 25, 2022

How To Finance Your Hotel Acquisition

Hotel financing gives you the necessary capital to build, renovate, and purchase hotels with commercial real estate loans. Since acquiring a hotel will often require a substantial amount of capital, you will likely need to find funding for the purchase. That’s where Alto Capital can help.

Some options that you have when financing your hotel acquisition include outside investors, small business loans, and forming partnerships with other real estate investors. 

Hotel developers are in luck. There have been recent changes in the way that hotels can be purchased and financed for investors. There are more and more private resources that investors can tap into when looking to find financing for the purchase of hotels, motels, and other commercial properties.

 Sources of Funding

While we mentioned that there are becoming more ways to finance a hotel purchase privately, there does remain some traditional ways that developers and real estate investors use to finance their hotel acquisition.

 These loans include:

  •  Traditional bank hotel loans
  •  Small Business Administration (SBA) Hotel Loans
  •  Real Estate Investment Trusts/Investment Pools

Traditional bank hotel loans are useful because banks remain the leading source of funding for hotel acquisitions today. However, bank financing is typically used by established investors and developers in branded properties.

Small Business Administration (SBA) hotel loans allow qualified lenders to be able to offer loans to small businesses. It’s important to understand that the SBA does not issue loans directly to businesses, they have a network of authorized lenders that they can connect developers and investors with.

 Real estate investment trusts (REITs) and investment pools are entities that purchase or invest in commercial real estate using the funds from individual or institutional investors. Benefits to choosing REITs include being able to partner with a group of experts to advise you along your journey in hotel acquisition financing.

 The Bottom Line 

Here at Alto Capital, we have an experienced management team that has sourced and closed over $1 billion in debt and equity financing across many industries.

By booking an appointment with us, you will take the first step toward funding purchases like hotels, apartments, restaurants, startups, and much more.

 Call us or visit our website today!


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