Best Hotel and Motel Financing

The best hotel and motel financing depends on what the money is for. To buy or renovate the building, an SBA 504 or SBA 7(a) loan is usually the cheapest route if you qualify. For mattresses, TVs, furniture and equipment, equipment financing such as Ameris Bank Equipment Finance fits better. For fast capital (a breakdown, payroll in the slow season or a PIP deadline), Merchant Fund Express, our recommended funder, often decides in 2 to 4 hours based on your deposits.

To a bank, a hotel is not an ordinary business. The property is special-purpose, revenue swings with the season, and franchise brands require renovations on a schedule. Below we compare each option using data from official sites and the SBA rulebook (checked October 2026) and tell you when each one makes sense. Leer en español.

The best options, ranked

1. Merchant Fund Express (recommended funder). Built for the owner who needs capital this week: replacing an air-conditioning system that died mid-summer, covering housekeeping payroll in the slow season, funding the first phase of a franchise PIP or putting down a renovation deposit. Amounts run from $5,000 to $5,000,000, decisions often come in 2 to 4 hours, and credit is considered from FICO 500, though stronger credit and cash flow usually bring better offers. It reviews your sales and deposits, not just your credit; collateral is not required in most cases, and applying is free with no impact to your credit. It accepts applicants with an ITIN (no SSN needed) and offers Spanish-speaking support. It is not the tool for buying the building.
2. SBA 504 loan. Long-term, fixed-rate financing for major fixed assets: buying, building or renovating the building and land, or machinery with a useful life of at least 10 years. According to sba.gov, the 504 portion tops out at $5.5 million, with 10-, 20- and 25-year terms. You go through a Certified Development Company (CDC) working alongside a bank. It cannot be used for working capital or inventory.
3. SBA 7(a) loan. The SBA's main program, up to $5 million. It can fund the purchase of an operating hotel (a change of ownership), property improvements, furniture and equipment, working capital and refinancing. You apply through an SBA-approved bank, and approval takes longer than private financing.
4. Ameris Bank Equipment Finance (formerly Balboa Capital). Balboa Capital now operates as a division of Ameris Bank. It finances new or used furniture, fixtures, computers, software, vehicles and machinery. On an application-only basis it goes up to $500,000 for hard collateral and $350,000 for soft collateral. It generally asks for 2+ years in business, $100,000+ in annual revenue and a FICO score of 640 or higher, and most contracts run 24 to 60 months. It requires a personal guarantee on programs for newer businesses.
5. Community bank or credit union. If you have years with a local bank, clean financial statements and good credit, a conventional commercial mortgage can compete with the SBA. Every bank sets its own terms, so get the offer in writing and compare it with a 504.

Quick comparison

How we rank

We do not use ratings or scores. We compare speed, minimum time in business, minimum credit, acceptance of ITIN or owners without an SSN, documents, amounts and collateral. For this page we also weighed two things specific to hospitality: whether the product works for the property or only for operations, and whether the payment can survive a slow season. We only use data from official sites and the SBA's SOP 50 10; if we could not verify a detail, we left it out. The full method is in how we rank business funding options, and every category lives in our small business funding rankings.

To be straight with you: if you qualify for the SBA and can wait, an SBA loan usually costs less than private financing. Our recommended funder ranks first because it solves what the SBA cannot solve quickly: the money you need before an out-of-service room costs you more bookings.

SBA rules that hit hotels and motels hardest

The SBA rulebook (SOP 50 10 8.1, effective October 1, 2026) has rules that land squarely on hospitality. Know them before you pay for an appraisal:

• The transient-guest rule. A hotel, motel or RV park is eligible only if more than 50% of the prior year's revenue came from guests who stayed 30 days or less. If you run a motel with lots of weekly or monthly rooms, check your numbers: a motel that operates like residential rental housing can be ruled out.
• Special-purpose property. The SBA lists hotels, motels and other lodging as limited or special-purpose property. On a 504, that raises your minimum injection to 15% of the project, and to 20% if the business is also new (2 years or less). For example, on a $2,000,000 project for an operating hotel, your share would be at least $300,000.
• Citizenship. Since March 1, 2026 (SBA Procedural Notice 5000-876626), 100% of the direct and indirect owners of a 7(a) or 504 applicant must be U.S. citizens or nationals whose principal residence is in the U.S. Permanent residents (green card holders) can no longer own any share. If your immigration situation is different, talk to an immigration attorney about your situation; we do not give immigration advice here.
• Change of ownership. If you buy an operating hotel with a 7(a), the SBA requires a minimum injection of 10% of the project cost on an initial acquisition, and that minimum cannot be reduced.

To go deeper, read 504 vs. 7(a) loans and our guide to business loans for hotels.

Which option fits your situation

• You are buying your first motel: start with a 7(a) or a 504 through a bank with hospitality experience. Build your cash injection now; the SBA does not accept an injection funded by a loan the business itself repays.
• Your franchise sent you a PIP: a Property Improvement Plan usually comes with deadlines. If the amount is large and you have time, a 7(a) or bank renovation loan is cheaper. If the deadline is close, fast capital can cover the first phase while the rest gets approved.
• Something broke that takes rooms offline: boilers, air conditioning, an elevator, the roof. Every night with rooms out of service is lost revenue, so speed matters more than the rate.
• You are replacing mattresses, TVs and furniture: equipment financing spreads the cost over months, and the equipment itself serves as collateral.
• The slow season is coming: if occupancy drops in winter or after summer, figure out how many months it takes you to recover before borrowing working capital. Also see the best line of credit for hotels, which only charges interest on what you use.

What lenders will ask for

1. Business bank statements for the last 3 to 6 months, showing deposits from booking platforms and your card processor.
2. Occupancy, average daily rate (ADR) and revenue per available room (RevPAR) reports, ideally covering 12 to 24 months so the full seasonal cycle shows.
3. Business and personal tax returns for 2 to 3 years for the SBA or a bank.
4. Franchise agreement and PIP, if applicable, with contractor bids.
5. Purchase agreement, appraisal and environmental report if you are buying the property.
6. ID, EIN or ITIN and your LLC or corporation documents.

A practical tip: deposit everything into the business account, including bookings paid in cash. A funder that reviews deposits only sees what reaches the bank.

Common mistakes when financing a hotel or motel

• Using short-term capital to buy the property. A building you will own for 20 years is better paid off with long-term financing.
• Skipping the 30-day rule check before applying for an SBA loan, especially for motels with lots of weekly guests.
• Underestimating the PIP. Get real bids and add a contingency cushion; running short halfway through a renovation is worse than borrowing a bit more.
• Signing up for fixed daily payments without thinking about seasonality. If revenue drops by half in winter, the payment has to survive that month, not your best month.
• Not comparing. Get at least two written offers and compare total cost and terms, not just speed.