If you’ve ever purchased a home, you probably understand the basics of obtaining a loan. You know that you will be required to make a down payment and you will have to pay interest on the loan amount. Acquiring a home loan is relatively simple to understand. However, the process is much different when it comes to hotel construction loans.

Constructing a hotel could cost millions of dollars, which is why many banks hesitate to approve these loans. Securing a hotel construction loan can be complex and difficult, which is why you should seek the help of a professional who can help you achieve your dream. The professionals at Hotel Capital Funding can guide you through the loan process and help you secure the best possible loan.

3 Important Things to Know Before Seeking a Hotel Construction Loan

1. A loan is not the only thing you need to take care of. Before you seek a hotel construction loan, it is important that you know your project will be permitted. You need to make sure you have approval from local government to move forward with the construction. The best thing to do is research local ordinances so that you are sure your construction project will not run into any regulatory issues. In addition, be prepared to zone the land and uncover any rules regarding noise and work permits in the area. This is necessary when building commercial properties. If you wait until after you obtain a loan to do this, it could hold up construction and ruin the time frame of your loan.
2. You will need a down payment. Just like you will need a down payment to secure a private home loan, collateral is necessary when seeking a hotel construction loan. If you are serious about obtaining a loan, you will need to provide a down payment in order for lenders to take you serious. Before you seek a loan, you should understand that you may need to provide other business assets as collateral. This may require you to work with partners or backers who will combine their funds with you to reach a sum necessary to make a down payment acceptable for the bank. A lender will not likely accept the risk of your loan if you do not offer a substantial down payment.
3. Your time frame is important for the terms of the loan. Due to the large scope of commercial construction projects, lenders understand that you will need time to complete construction. So what can you expect for the terms of a hotel construction loan? These types of loans could last up to seven years. Banks will allow you enough time to finish construction and start earning money to pay back the loan, but the length of the loan will depend upon many factors. However, construction loans can be very strict with regard to time. Because the bank has a financial stake in the construction, it will want you to complete the project in a timely manner. It is not uncommon for a bank to continually check on the project and provide you with smaller sums of money throughout the project rather than one lump sum at the beginning. This is why it is imperative that you understand the terms of the loan and work with professionals who can help you obtain a loan that gives you enough time to complete your hotel construction.

Where Do You Go to Get a Hotel Loan?

Now that you know what to expect when attempting to secure a hotel construction loan, you need to know where to go to obtain a loan. Don’t expect to visit your local bank or credit union when seeking a commercial loan. These loans involve huge sums of money, so the average bank will not finance a hotel construction loan.

If you are seeking a hotel loan, you will typically need to find a larger bank that has interests all over the world. These lenders will have the ability to offer your larger amounts of funds and are more prepared to take on the risks involved with an expensive loan. Remember, the rate you are offered and the chances that the loan will be approved vary based on many factors, including the current economic climate, the amount of your down payment, and your financial history.

So where exactly do you go for a hotel construction loan? Contact the experienced professionals at Hotel Capital Funding today. Our skilled professionals will be able to help you obtain a hotel construction loan with the best possible terms for you.

Call Hotel Capital Funding for a Hotel Construction Loan Today

If you are attempting to obtain a hotel construction loan, you should speak to our professionals at Hotel Capital Funding. These types of loans are very risky and the terms of the loan are extremely important. That is why you cannot just trust anyone to help you secure a loan.

At Hotel Capital Funding, we help you navigate the hotel construction loan process. We will work with you to make sure you are fully ready to seek a loan, and we can help you obtain a loan with the best terms possible. We have decades of experience in the field of commercial loans, and we can use our experience and contacts to your advantage.

Obtaining a hotel construction loan can be difficult, but Hotel Capital Funding can help you. Call us at 949-439-1423 to learn how you can achieve your dream today.