Discover Our Hotel Lending Options – Tailored Financing for Your Hospitality Business
At Herring Bank, we understand the unique challenges and opportunities in the hospitality industry. Whether you’re looking to acquire a new property, refinance an existing hotel, or fund a major renovation, our hotel lending solutions are designed to help you achieve your goals. With a focus on flexibility, competitive rates, and personalized service, we provide the financial tools you need to grow and thrive in the competitive hospitality market.
From SBA 504 loans for long-term stability to CMBS financing for stabilized properties, and construction loans for new builds or renovations, Herring Bank offers a wide range of options tailored to your specific needs. Our team of lending experts is here to guide you every step of the way, ensuring you get the right financing solution for your hospitality business.
Why Choose Herring Bank for Your Hotel Financing Needs?
- Tailored Loan Products: Customized solutions, including SBA 504 loans, conventional financing, CMBS loans, and construction take-out loans.
- Competitive Rates and Terms: Affordable rates with flexible terms to suit your cash flow and business objectives.
- Local Expertise: Deep understanding of the hospitality industry and regional markets.
- Streamlined Process: Fast approvals and seamless closings to get you funded quickly.
- Comprehensive Support: Dedicated guidance from application to funding and beyond.
Whether you’re managing a boutique hotel, a franchise property, or a large-scale resort, Herring Bank is committed to helping you succeed. Discover how our hotel lending options can help you unlock the full potential of your hospitality business.
Hotel Loan Types – Find the Perfect Hotel Financing Solution for Your Needs
Whether you’re seeking Conventional Hotel Financing, SBA 504 Loans, SBA 7a Loans, Hotel CMBS Financing, Hotel Franchise Financing, Hotel Refinance, Construction Takeout Financing, or Hotel Construction Loans, our team of hospitality lending experts is here to help! At Herring Bank, we specialize in providing tailored financing solutions for hotel owners, developers, and operators. From acquiring a new property to refinancing an existing one, funding a major renovation, or securing construction takeout financing, we have the expertise and loan products to meet your unique needs. Let us help you secure the right financing to grow and stabilize your hospitality business.
Conventional Hotel Financing
Traditional bank loans for hotel purchases, refinancing, or renovations, typically requiring strong credit and a 20-30% down payment.
Hotel Franchise Financing
Loans tailored for acquiring or operating a hotel under a franchise brand, often with terms aligned with franchise requirements and brand standards.
CMBS Hotel Financing
Loans secured by commercial mortgage-backed securities, offering competitive rates for larger hotel properties but with stricter requirements.
Hotel Refinance
Loans designed to replace existing hotel debt, often to secure better interest rates, extend terms, or access equity for renovations or expansions.
Construction Takeout Financing
A loan that replaces short-term construction financing with long-term permanent financing once the hotel project is completed and stabilized.
Construction Loans for Hotels
Short-term financing used to fund the construction or major renovation of a hotel, typically disbursed in stages and repaid once the project is complete.
SBA 504 Hotel Loans
A split-financing option where a bank provides 50%, the borrower contributes 10%, and the SBA covers 40% for hotel purchases, construction, or renovations.
SBA 7a Hotel Loans
A flexible SBA-backed loan program offering up to $5 million for hotel acquisitions, refinancing, or working capital, with longer repayment terms and lower down payments.
Frequently asked questions
1. What types of hotel financing does Herring Bank offer?
We provide a comprehensive suite of hotel financing solutions, including:
- Conventional Hotel Loans
- SBA 504 Loans (for acquisitions, construction, or renovations)
- SBA 7a Loans (flexible financing for working capital or refinancing)
- CMBS Financing (for larger hotel properties)
- Hotel Franchise Financing (aligned with major brands like Hilton or Marriott)
- Hotel Refinance (to lower rates or access equity)
- Construction Loans and Construction Takeout Financing
2. What are the benefits of an SBA 504 loan for hotel projects?
SBA 504 loans are ideal for hoteliers seeking long-term stability:
- Low down payment (as low as 10% equity)
- Fixed interest rates on the SBA portion (40% of total financing)
- 25-year terms to match the lifespan of hotel assets
- Funds can be used for purchases, construction, or renovations
3. How does CMBS hotel financing work?
CMBS (Commercial Mortgage-Backed Securities) loans are pooled with other commercial mortgages and sold to investors. Benefits include:
- Competitive rates for larger hotels ($2M+ loan amounts)
- Non-recourse options (no personal liability)
- Terms of 5-10 years with a 25-30 year amortization
4. Can I refinance my existing hotel loan with Herring Bank?
Yes! Our Hotel Refinance solutions help you:
- Lower your monthly payments
- Access equity for renovations or expansions
- Consolidate debt or adjust loan terms to improve cash flow
5. What’s the difference between a hotel construction loan and takeout financing?
- Construction Loans: Short-term funding (12-24 months) to build or renovate a hotel, disbursed in stages as milestones are met.
- Takeout Financing: Long-term permanent financing (e.g., SBA 504 or CMBS) that replaces the construction loan once the hotel is operational and stabilized.
6. Do I need a franchise agreement to qualify for Hotel Franchise Financing?
Yes. We work with franchisees of recognized brands (e.g., Holiday Inn, Best Western) and structure loans to align with franchise requirements, including:
- Brand-mandated renovations or upgrades
- Franchise fees and working capital reserves
7. What credit score is required for hotel financing?
Requirements vary by loan type:
- Conventional Loans: 680+ credit score
- SBA Loans: 660+ (flexible for strong collateral or cash flow)
- CMBS Loans: Focuses more on hotel cash flow (DSCR of 1.25x+)
8. How long does the hotel loan approval process take?
- SBA Loans: 45-60 days
- Conventional/CMBS Loans: 30-45 days
- Construction Loans: 60-90 days (due to underwriting and appraisal complexity)
9. Can I finance a hotel renovation with an SBA loan?
Yes! Both SBA 504 and 7a loans can fund renovations, including:
- Room upgrades
- Lobby redesigns
- Energy-efficient systems (HVAC, lighting)
- ADA compliance improvements
10. Does Herring Bank offer financing for boutique or independent hotels?
Absolutely. We provide Conventional Loans and SBA 7a loans tailored to independent hotels, with terms based on your property’s historical performance and market potential.
Why Choose Herring Bank?
- Hospitality-Focused Expertise: We understand hotel cash flow, RevPAR, and seasonal trends.
- Flexible Terms: Customized solutions for independent hotels, franchises, and portfolios.
- Fast Approvals: Streamlined underwriting for time-sensitive projects.