<h2>How do I get a commercial mortgage for a hotel business?<\/h2>\r\nWe receive a lot of enquiries from businesses within the hospitality and tourism sector, in particular from people who want to know how they can secure a <a href="https:\/\/www.onlinemortgageadvisor.co.uk\/commercial-mortgages\/">commercial mortgage<\/a> for a hotel purchase or who are looking for finance to carry out refurbishment work to an existing hotel.\r\n\r\nIf you\u2019re looking for hotel finance, read through the information below then make an enquiry with us so we can arrange for a <a href="https:\/\/www.onlinemortgageadvisor.co.uk\/commercial-mortgages\/commercial-mortgage-broker\/">commercial mortgage broker<\/a> to speak with you directly.\r\n\r\nIn this article we will cover:\r\n<ul>\r\n \t<li><a href="#secure-commercial-hotel">How can I secure a commercial mortgage to buy a hotel?<\/a>\r\n<ul>\r\n \t<li><a href="#eligibility-criteria-hotels">Hotel mortgage eligibility criteria<\/a><\/li>\r\n<\/ul>\r\n<\/li>\r\n \t<li><a href="#best-rates-hotel">How can I get the best mortgage rates for my hotel business?<\/a><\/li>\r\n \t<li><a href="#commercial-hotel-refurbishment">Can I use a commercial mortgage to finance a hotel refurbishment? \u00a0<\/a><\/li>\r\n \t<li><a href="#asset-finance-hotels">Can I use asset finance to buy a hotel? \u00a0<\/a><\/li>\r\n \t<li><a href="#bridging-loans-hotel">Can I use a bridging loan to buy a hotel?\u00a0<\/a><\/li>\r\n \t<li><a href="#development-finance-hotels">Could you use development finance to buy a hotel?\u00a0<\/a><\/li>\r\n \t<li><a href="#other-finance-hotels">What other finance options are there available?\u00a0<\/a><\/li>\r\n \t<li><a href="#deposit-hotel-mortgages">How much deposit do I need to buy a hotel?<\/a><\/li>\r\n \t<li><a href="#bad-credit-hotels">Can I get hotel finance with a poor credit record?<\/a><\/li>\r\n \t<li><a href="#hotel-brokers">How to find expert hotel mortgage brokers<\/a><\/li>\r\n<\/ul>\r\n[feefo-banner]\r\n<h2 id="secure-commercial-hotel">How can I secure a commercial mortgage to buy a hotel?<\/h2>\r\nHotel finance in the UK is widely available with a number of lenders keen to assist both new purchases and refinancing for refurbishments.\r\n\r\nIf you\u2019re looking at how to finance a hotel purchase there are a <a href="#eligibility-criteria-hotels">number of areas a lender will want to review<\/a> when assessing the viability of your business and whether your future profit projections support your finance requirements.\r\n\r\nOnce they complete their review, a lender will feed this information into their hotel mortgage calculator in order to establish how much they would allow you to borrow.\r\n<h3 id="eligibility-criteria-hotels">Hotel mortgage eligibility criteria<\/h3>\r\nHotel mortgages are usually assessed on a bespoke, case-by-case basis, but the key factors that will determine how favourable a lender will view a commercial hotel mortgage application include:\r\n<h4>Industry experience<\/h4>\r\nA lender will want to understand how much experience you have in the hospitality industry and specifically working within a hotel environment. The more experience you can evidence, the more favourable your application will be viewed.\r\n\r\nIf your aim is to run a hotel as part of a wider investment portfolio and leave the day-to-day management to somebody else, you should expect a lender to scrutinise your hiring strategy and the experience of those in key management positions, and they may adjust the loan to value (LTV) ratio accordingly.\r\n\r\nFor larger establishments, a degree in hospitality and\/or hotel management would be desirable. In addition a lender may wish to review all the appropriate food hygiene and alcohol licenses that are in place and are up to date.\r\n<h4>Occupancy rates<\/h4>\r\nThe profitability of a hotel business will largely rely on its occupancy rates. If revenues per available room (RevPAR) and average daily rates (ADR) are high then this will obviously have a positive impact for lenders.\r\n\r\nIf you are buying an existing hotel business where RevPAR is currently below where it needs to be then a lender would want to understand what your business plan is to improve this figure in order to raise the hotel\u2019s profitability.\r\n<h4>Trading accounts<\/h4>\r\nMost lenders will want to see at least two years previous trading history for an existing hotel business in order to assess the affordability of any finance requirements, although are specialist providers who may accept less than this, under the right circumstances.\r\n<h4>Business and marketing plan<\/h4>\r\nMost businesses cannot survive in an online world without a solid marketing strategy and this includes the hotel sector. Reliance on repeat trade is not considered an effective long-term plan and lenders would not look positively if this is the case.\r\n<h4>Location<\/h4>\r\nFor any hospitality and tourism business, location can play a key part in its success. For a hotel business looking to secure finance, a lender will look more favourably if it\u2019s proximity (close to transport hubs, office buildings, entertainment centres) is deemed a major factor in influencing its profitability.\r\n\r\nOf all the above factors, experience could be considered most crucial. The more experienced you are in your line of business the more able you should be at influencing the overlying profitability.\r\n\r\nHowever, if you have little or no experience at running a hotel but can demonstrate business acumen in other sectors, some lenders will still be keen to assist with financing your purchase.\r\n\r\nMake an enquiry and we can arrange for an expert to call you directly.\r\n<h2 id="best-rates-hotel">How can I get the best mortgage rates for my hotel business?<\/h2>\r\nThe best way a hotel business can secure the most favourable mortgage terms would be to present the most robust case to a lender which fulfils most, if not all, of the points made in the section above.\r\n\r\nThe more experience you can evidence within the hotel industry, positive occupancy rates and an effective marketing plan with clarity on how to achieve future projections. All of these factors should ensure a lender is more willing to offer the best mortgage rates for your hotel\u2019s borrowing requirements.\r\n\r\nIf you make an enquiry with us we can arrange for a mortgage broker we work with who can offer the best whole-of-market advice to contact you directly and discuss the requirements for your hotel purchase.\r\n<h2 id="commercial-hotel-refurbishment">Can I use a commercial mortgage to finance a hotel refurbishment?<\/h2>\r\nYes this could be possible. Depending upon the extent of the renovations required a commercial mortgage could well be the most appropriate form of lending. For amounts below \u00a325,000 an unsecured business loan may be the best way forward.\r\n\r\nAny significant renovation to a hotel business could result in a large upturn in revenue performance. If you can demonstrate that the aim of your refurbishment plan is to substantially change the quality of your hotel most lenders would deem this a positive move and could be a worthwhile project to undertake.\r\n\r\nIf you currently run a hotel and want to consider how to finance a refurbishment, make an enquiry with us and we can arrange for an expert to contact you to discuss your plans further.\r\n<h2>What other types of hotel finance loans are there?<\/h2>\r\nBesides business mortgages, there are a number of other forms of commercial lending which could help you finance a hotel purchase.\r\n\r\nAlternatives include\u2026\r\n<ul>\r\n \t<li>Asset finance<\/li>\r\n \t<li>Hotel bridging loans<\/li>\r\n \t<li>Development finance<\/li>\r\n \t<li>Business loans<\/li>\r\n \t<li>Other funding options<\/li>\r\n<\/ul>\r\n<h3 id="asset-finance-hotels">Using asset finance to buy a hotel<\/h3>\r\nAsset finance could well be a very useful form of lending for a hotel business to utilise for the equipment it would require to run its day-to-day operations such as - computer hardware\/software, office equipment and room furniture.\r\n\r\nHowever, in terms of appropriate lending for purchasing a hotel or refurbishment finance, a commercial mortgage or other form of business loan could be a more viable option.\r\n<h3 id="bridging-loans-hotel">Using a bridging loan to buy a hotel<\/h3>\r\n<a href="https:\/\/www.onlinemortgageadvisor.co.uk\/bridging-finance\/bridging-finance-for-hotels\/">Bridging loans<\/a> are a way to finance your hotel purchase promptly, if needed, or on more flexible terms than a mortgage lenders are typically in a position to offer. For example, if you\u2019re buying a hotel at an auction or there is another interested party in a property and you want to complete the deal quickly.\r\n\r\nAs the name suggests, bridging finance is a \u2018bridge\u2019 between a purchase and a clearly defined exit strategy. This could mean that by the end of the bridging loan term (usually 12-36 months) you now have sufficient scope to refinance your lending with a commercial mortgage or you intend to sell your hotel once the loan ends.\r\n<h3 id="development-finance-hotels">Using development finance to buy a hotel<\/h3>\r\nIf you\u2019re looking to fund a hotel purchase, literally, from the ground up and build a brand new complex or your premises requires major renovation work then <a href="https:\/\/www.onlinemortgageadvisor.co.uk\/development-finance\/">development finance<\/a> could be a viable consideration.\r\n\r\nThis type of borrowing shares some similarities with bridging finance. The key difference is that the total amount you borrow is released in staged draw-downs as the building construction or renovation takes shape.\r\n\r\nThe benefit of using development finance is that you only pay interest on the amounts that have been released to you and you can build the scheme to your own specifications (assuming you have the means and expertise to do so).\r\n\r\nOnce your new hotel has been completed you could then, as with a bridging loan, look at refinancing over the longer term or sell the business - this will need to be clarified from the outset and most lenders will insist on an exit strategy.\r\n<h3>Can I get a hotel business loan?<\/h3>\r\nIf you already have some capital to put towards the purchase of a hotel premises but need to borrow more to get your hospitality venture off the ground, a business loan could be a viable option.\r\n\r\nThis form of commercial lending is usually capped at \u00a325,000 and offered on an unsecured basis. If the amount you need falls within this ballpark, a business loan might be something to speak to an advisor about.\r\n<h3 id="other-finance-hotels">Using other funding options to buy a hotel<\/h3>\r\nThere are a number of other alternatives to commercial mortgages in addition to those mentioned above. For example, if you have a large investment portfolio of businesses and properties you could consider refinancing them to release some of the equity to fund future purchases.\r\n\r\nThe advisors we work with are all well versed in the funding options available for all different kinds of commercial requirements. If you make an enquiry with us we can arrange for an expert to contact you directly to discuss further.\r\n<h2 id="deposit-hotel-mortgages">Do hotel mortgages need a large deposit?<\/h2>\r\nGenerally, most lenders require a <a href="https:\/\/www.onlinemortgageadvisor.co.uk\/commercial-mortgages\/commercial-mortgage-deposit\/">deposit<\/a> of between 25-40% for commercial mortgages depending upon the level of risk they deem to be taking and the type of commercial mortgage requested.\r\n\r\nFor commercial hotel mortgages most lenders will require a deposit of 40%, some will require 30% and a few will allow 25% based on the strength of the business\u2019 trading accounts, future profit projections and the borrower\u2019s credit record.\r\n<h3>Is it possible to get 100% hotel finance?<\/h3>\r\nIt may be possible to convince a commercial finance provider to lend you 100% of the funds you need to bankroll your hotel investment, but these deals usually require the borrower to put up additional security, such as a property or asset they own and hold sufficient equity in.\r\n\r\nThis comes with the risk of multiple repossessions if you default on your commercial mortgage, but if you <a href="https:\/\/enquiries.onlinemortgageadvisor.co.uk\/match-me-with-a-commercial-mortgage-specialist\/">make an enquiry<\/a>, the experts we work with can help you carry out a risk assessment before pairing you with the right lender.\r\n<h2 id="bad-credit-hotels">Can I get hotel finance with a poor credit record?<\/h2>\r\nA <a href="https:\/\/www.onlinemortgageadvisor.co.uk\/commercial-mortgages\/bad-credit-commercial-mortgage\/">poor credit history<\/a> can, no doubt, cause problems with how much a lender may be prepared to lend you for hotel finance, depending on the type of issue you\u2019ve had and when it was registered.\r\n\r\nSome lenders might offer unfavourable rates or turn the borrower away if there\u2019s bad credit on file, but there are specialist commercial lenders who cater for individuals and businesses with various forms of bad credit, usually requesting a higher deposit to help minimise the level of risk.\r\n<h2>Why you should speak to a commercial mortgage broker<\/h2>\r\nAt Online Mortgage Advisor we can offer you a first-class service tailored to your own specific needs with access to the most experienced brokers available that:\r\n<ul>\r\n \t<li>Have whole of market access<\/li>\r\n \t<li>Have excellent relationships with hotel mortgage lenders<\/li>\r\n \t<li>Can offer bespoke advice on the hotel market<\/li>\r\n \t<li>Are OMA accredited advisors<\/li>\r\n \t<li>Have completed a 12 module LIBF accredited training course<\/li>\r\n<\/ul>\r\n<h2 id="hotel-brokers">Speak to a commercial mortgage expert<\/h2>\r\nIf you have questions and want to speak to an expert for the right advice, call Online Mortgage Advisor today on 0808 189 2301 or <a href="https:\/\/enquiries.onlinemortgageadvisor.co.uk\/match-me-with-a-commercial-mortgage-specialist\/">make an enquiry online<\/a>.\r\n\r\nThen sit back and let us do all the hard work in finding the broker with the right expertise for your circumstances. We don\u2019t charge a fee and there\u2019s absolutely no obligation or marks on your credit rating.