Hotel and Lodging Amenities for Distinct Travel Groups

Whether you are building a brand new hotel or buying an existing one, you will need financing to get your dream off the ground. Renovations of a hotel can cost hundreds of thousands if not millions of dollars as well. Unless you have enough funds to support your dream on your own, at least a bit of hotel financing is in your future.

Here is what you need to know about hotel financing to help make your business a success.

Franchised Or Mid-Sized Hotels

If you haven't purchased a hotel yet, you might want to think about buying into a franchise brand or a mid-sized hotel. Franchises have name recognition so they are more likely to garner you hotel financing loan options rather than a small hotel or bed and breakfast type inn.

You could also opt for a mid-sized hotel as well. Mid-sized hotels in some areas can outperform the larger chain hotels. Mid-size hotels can be considered slightly larger and more elegant. They are seen as less risky than a larger hotel especially if most of the hotel's funding will be coming via a loan.

Know What Your Costs Are

Before you head out to get hotel financing, you need to know exactly what your costs are. You can estimate some of them like wages for employees, and you can get a good idea of what the market is paying by doing research online. The costs for the setup of a hotel can be high, and a good financial plan ahead of time with well thought out costs will go a long way to secure funding.

You need to know what your land costs are. You also need to know what equipment you will need. This will depend on whether you are building a hotel from scratch or renovating an existing one. You also need funds for furniture, fixtures, bedding, and kitchen equipment.

Also, don't forget to budget for your legal expenses too. This includes all permits, licenses, and lawyer's fees.

Raise Funds On Your Own

In order to secure hotel financing, it's a good idea to raise some of the funds on your own. You can do this several different ways. You could borrow from friends and family. This could be part of the downpayment or perhaps they can help with some of the building or renovation costs. You could use some of your own savings. You will most likely need to bring some of your own money to the table before you can secure a loan.

You could opt to take out a second mortgage on your own or use some of the capital you have earned in your home toward the hotel. You could even sell your home and use the money for the hotel. If your hotel is large enough, you could use it as your home base.

You can also get a commercial loan or mortgage for the hotel. Make sure you have your business plan written with all expenses accounted for.

Contact a hotel financing service to learn more.