Hotels, motels, inns, bars and event venues usually pay for upgrades and slow months with four kinds of funding, and each one fits a different job. Equipment financing pays for HVAC units, laundry machines, kitchen equipment and guest room furniture, with the items themselves as security. A line of credit carries payroll and utilities through the slow season and the weeks before the busy one. SBA and bank loans pay for large renovations, brand-required property improvement plans and buying the property you run, over terms measured in years. Revenue-based financing, often called a merchant cash advance, covers short, urgent needs and is repaid as a share of sales. Buying or building a hotel is commercial real estate lending, and that sits mostly with banks and the SBA.
The hard part in hospitality is timing. Rooms and tables fill by the season, while payroll, debt and repairs keep their own calendar, and the renovation that keeps a property competitive can only happen when guests are away and revenue is low. Our hospitality funding page has a shorter overview.
Why hospitality cash flow swings so hard
According to CoStar's STR data, U.S. hotels ran at 51.9% occupancy in January 2024, with an average daily rate of $146.33 and revenue per available room of $75.99. In July 2024, occupancy reached 68.8%, the average rate rose to $161.69 and revenue per available room climbed to $111.18. Each room earned about 32% less in January than in July, and since those are national averages, a beach motel or a ski lodge can see a much wider gap.
Costs fall far less than revenue. Bureau of Labor Statistics figures for traveler accommodation, which covers hotels, motels and bed and breakfasts, show about 1.78 million workers in January 2024 and 1.94 million in July, a swing of about 9%, while the mortgage, franchise fees, insurance and utilities barely move at all.
Take an example 60-room property that tracks those national averages. It would take in about $141,000 in room revenue in January and about $207,000 in July, so a fixed payment of $17,000 a month would take about 12% of January's room revenue and about 8% of July's. These figures are illustrative, and they show why the shape of repayment matters so much here. The Fed's 2025 Report on Employer Firms found that 56% of small employer firms named paying operating expenses as a financial challenge and 51% named uneven cash flow, and a seasonal property tends to meet both problems in the same quarter.
The main ways to finance a hotel, motel or venue
Line of credit
A line of credit gives you a limit, up to $250,000 through our network, and you draw only what you need. You repay what you drew on a weekly or monthly schedule, and the room opens up again as you repay. For a seasonal property, a line suits the costs that come back every year, like payroll through the quiet months, hiring and training before opening weekend, linen and supply orders, and a tax bill that lands when occupancy is low. Our line of credit page explains limits, draws and repayment.
Equipment financing
Equipment financing pays for a specific item and uses that item as security, so the property itself does not have to be pledged. In a hotel or motel, typical examples are room air conditioners and other HVAC units, commercial washers and dryers, door lock systems, televisions, and furniture and fixtures for guest rooms. Bars finance coolers, ice machines and draft systems, and venues finance sound, lighting, tables and staging. Offers usually come back within one to two business days, and in the Fed survey 68% of applicants for auto or equipment loans were fully approved, the highest share of any product it lists. Our equipment financing page lists what it covers, and our guide on how equipment financing works explains terms and down payments.
SBA and bank loans
SBA and bank loans take weeks rather than days and ask for tax returns, a personal financial statement and a schedule of existing debts, and in exchange they carry the longest terms. The SBA's 7(a) program lends up to $5 million for uses that include working capital, furniture and fixtures, equipment, changes of ownership, and acquiring or improving real estate. The 504 program provides long-term, fixed-rate financing of up to $5 million, or $5.5 million for some projects, for buying, building or renovating buildings and for equipment with at least ten years of useful life, though it cannot be used for working capital or inventory. These are the tools for a full renovation or a brand improvement plan, and they are also the hardest to get, since only 32% of SBA loan applicants in the Fed survey were fully approved. Our SBA and bank loans page lists what lenders ask for.
Revenue-based financing
With revenue-based financing, a funder buys a share of your future sales at a discount. It pays you a lump sum now and collects a larger fixed total by daily or weekly debit from your business account. Advances arranged through us range from $5,000 to $2,000,000, typically fund in one to two business days and usually need no collateral. As an example, a factor rate of 1.30 on a $30,000 advance means $39,000 repaid in total. An advance suits a short, urgent need with a clear payoff, such as a boiler that fails in February or a roof leak that has to be fixed before a booked weekend, and it is a costly way to pay for a renovation that takes years to earn back.
Many advances set a fixed payment that estimates the agreed share and let you ask for a lower payment if sales fall. That adjustment is called reconciliation, and heading into a slow season it decides whether the advance behaves like a share of sales or like a fixed loan, so ask who approves it and how quickly the payment changes before you sign.
Financing renovations and property improvement plans
When a franchise agreement is renewed, a hotel changes hands or a brand updates its standards, the franchisor typically issues a property improvement plan, usually called a PIP. It lists the work the property has to finish, such as new furniture and carpets in the rooms, bathroom updates, a lobby refresh or new signage, with a date for each item. Independent inns and motels face the same work without the paperwork, because dated rooms show up in reviews and in the rates a property can charge.
Financing for a large plan usually comes in layers. Furniture, fixtures and equipment can be financed as equipment, with payments matched to their useful life. Building work such as bathrooms, roofs and common areas fits an SBA 7(a) or 504 loan or a bank loan, which spreads the cost over the seasons the work will improve. A line of credit covers the gaps, like a supplier deposit or payroll while rooms are out of service. Start the bank or SBA application months before the off-season, because the lender's timeline usually decides when the work can begin. We wrote more about that in our post on arranging funding before the busy season.
Buying or building a hotel is real estate lending
Loans to acquire a hotel, build one or refinance a large hotel mortgage are commercial real estate loans. Banks and the SBA make most of them for owner-operators of small and mid-sized properties, the process includes an appraisal, a review of the property's operating history and a down payment, and it takes months. We can help an owner-operator prepare and place an SBA or bank loan for a property they will run. For a large construction loan or a hotel mortgage above SBA limits, a commercial mortgage lender or commercial real estate broker is the right place to start. SBA lending matters in this industry because so many properties are small, and an STR study for the American Hotel and Lodging Association found that 61% of U.S. hotels qualify as small businesses under the SBA's classification.
Bars and event venues
A bar's finances look more like a restaurant's than a hotel's, with card sales settling into the bank nearly every day and a smaller seasonal swing. BLS figures for drinking places show about 401,000 workers in January 2024 and 425,000 in June, a rise of about 6%. Steady daily deposits are what revenue-based funders read, so an advance can suit a bar's short-term needs, like a cooler that fails or stock ahead of a holiday weekend, while draft systems and POS hardware fit equipment financing. Buying a bar or its building is usually a bank or SBA conversation. Our post on restaurant financing covers kitchens, patios and daily card revenue, and most of it applies to a bar with a kitchen.
Wedding venues, banquet halls and event spaces take booking deposits months ahead and deliver the event later, so the bank balance looks healthiest well before the costs arrive. A venue that spends spring deposits on winter bills has to staff and cater those events later with little cash coming in, and a cancellation that triggers a refund widens the gap. Treat deposits as money already committed to future events and use a line of credit for the off-season instead. Funders reading a venue's statements may ask how much of the balance is already promised, so keep a list of booked dates and deposits ready.
What funders look at in a hospitality file
Every funder sets its own thresholds, and they vary widely. Revenue-based funders and many line of credit funders decide mainly from your last four months of business bank statements, looking at monthly deposits and how steady they are, how often the balance runs low, and which debits already leave the account, especially daily payments to other funders. Four months from the slow season can make a profitable property look weak, so offer a full year of statements, or the same months from the prior year, so a funder can see the whole cycle. Our hospitality page describes how these files are read for occupancy, rate and season.
In the Fed survey, 49% of leisure and hospitality applicants were fully approved, and approval rose with age, from 48% of firms open five years or less to 64% of firms open 21 years or more. Credit matters more to some funders than to others, and most prequalify from bank statements and a soft credit pull. If you need hotel or bar funding with bad credit, a low score narrows the list of funders rather than ending the search. Our guide to qualifying for a merchant cash advance goes through the requirements.
What hospitality businesses use financing for
Most requests from hotels, bars and venues fall into a few familiar needs, and each tends to suit one product.
| Need | What tends to fit | Why |
|---|---|---|
| Payroll and utilities through the slow season | A line of credit | You draw in the quiet months and repay when occupancy returns. |
| A brand property improvement plan | An SBA or bank loan, with equipment financing for furniture and fixtures | The work earns money for many seasons, so a longer term keeps the payment in line with what it brings in. |
| Room air conditioners, laundry machines or a boiler | Equipment financing | The unit secures the financing, and the term can follow its working life. |
| An urgent repair before a booked weekend | A short revenue-based advance or a draw on a line | The cost is immediate and small next to the revenue it protects. |
| Buying the property you operate | An SBA 7(a) or 504 loan or a bank loan | This is real estate lending, with appraisals, down payments and long terms. |
Mistakes that cost hospitality owners the most
The most expensive mistake we see is stacking, which means taking a second or third advance while the first is still being repaid. Each new advance adds another debit to the same account, and a second advance taken in October puts its payments in the weakest months of the year. Covering a PIP deadline with a short advance does similar damage, because the payments come out of the next few months of revenue long before the new rooms have earned anything back.
The second mistake is waiting for the off-season to arrange money for the off-season. By November the statements show low deposits and there is less time to compare offers or wait for an SBA loan, while a line arranged with the summer deposits still on the statements gives funders a stronger file. The third is signing the first offer without comparing it, since offers on the same file can differ in total payback, payment frequency and early payoff terms.
How to apply for hospitality financing
- Fill out the short application with your monthly revenue, time in business and what the money is for. There is nothing to pay to apply or to see offers, and no obligation to accept one.
- Add your last four months of business bank statements by uploading them or connecting your bank read-only, plus earlier months if those four fall in your slow season. For an SBA or bank loan, have tax returns, a personal financial statement and a list of current debts ready.
- We send your file to the funders in our network, bring their offers back side by side, and go through the total payback, payment and early payoff terms with you before anything is signed.
- Most applicants are funded within one to two business days of choosing an offer, and some the same day, while SBA and bank loans take several weeks.
To talk through a renovation or a slow-season gap first, call us at (818) 351-0225.
Questions hospitality owners ask about financing
Can I get a loan to buy a hotel or motel?
Yes, though buying a hotel is commercial real estate lending, so it usually comes from a bank or through the SBA 7(a) and 504 programs and takes months, with an appraisal and a down payment.
How do you finance a hotel renovation or a property improvement plan?
Most owners split the cost, financing furniture, fixtures and equipment as equipment and putting the building work on an SBA or bank loan with a longer term, with a line of credit for supplier deposits and payroll while rooms are out of service.
Can a hotel or bar get financing with bad credit?
Many can, though with fewer options. Revenue-based funders build most of their decision from bank statements and deposits, so a low score narrows the list of funders rather than ending the search.
How fast can a hotel, bar or venue get funding?
Most applicants are funded within one to two business days of choosing an offer, and some the same day. SBA and bank loans take several weeks, and loans to buy a property often take longer.
Does applying for hospitality financing hurt my credit score?
Getting matched with funders does not need a hard credit pull, since most funders prequalify from bank statements and a soft pull. A funder may run a hard pull in final underwriting, and you will know before it does.
