The best financing approach for a hotel acquisition depends on the project behind the purchase. Budget, timing, property needs, and future development plans can all shape the capital strategy. By considering these factors early, buyers can approach hotel loan programs with a better understanding of the needed terms and structure.
Before seeking funding, hotel buyers should have a clear understanding of the project. The plan should consider the purchase specifics, the property’s current condition, and future work that may be required.
A hotel might need:
The financing plan should accommodate these needs. It should also conform to the budget, time frame, and development plan. This approach is better than choosing one loan structure before knowing what the property will require.
The budget gives the financing plan its starting point. The purchase is one cost, but it may not be the only one. The broader property development financing model should include costs tied to:
Looking at these needs early gives buyer a clearer view of the capital required for the full project.
Timing can change the amount and type of funding needed. A buyer may need money to purchase the hotel. Later, the property may need funds for construction, marketing to drive demand, upgrades, or refinancing.
The financing model should include both short-term and long-term funding. It should also provide funding that can be released in stages as construction moves ahead. This can keep the financing plan in synch with project schedule.
After purchase more expenses are highly likely. Under some circumstances a buyer might plan renovations. Another might move into full construction. A third might plan to improve the property, refinance, and sell. The financing approach can change based on these plans.
Hotel projects in the portfolio include acquisition, construction, refinancing, bridge financing, and construction completion. This shows that hotel financing needs can change as a property moves through different stages.
Hotel loan programs can vary. A hotel purchase requires a different type of funding than a construction project or refinance.
| Project need | Supported financing situation |
| Buying a hotel | Acquisition loan |
| Building a hotel | Construction loan and permanent loan |
| Finishing an active project | Construction completion loan |
| Changing existing debt | Refinance |
| Short-term project needs | Bridge financing |
Exact loan rates, LTV, DSCR, loan amounts, and eligibility requirements can vary by project and funding source.
The first step is loan sourcing. Our financing network includes more than 8,000 local, national, and international funding sources. This does not mean every source provides hotel financing. Unlike a few years ago, a large number of lenders will now finance hospitality assets and projects.
Our network gives the financing team a broad group of potential sources to review. Every property can be different. The property type, sponsor, investment plan, and project structure can all affect the type of capital needed.
Finding possible funding sources is only the start. The next step is comparing options.
The comparison can consider:
Commercial real estate financing can also require both debt and equity. The right mix depends on the project and the funding sources available.
After the options are compared, the process moves to documentation and submissions, and approval.
The process can be viewed in four clear steps:
Loan sourcing and requirements → Loan comparison → Documentation → Approval
The financing team assists with all stages. This provides hotel buyers a structured path and a central repository of information instead of sponsors working through potential lenders, and what documentation will be needed. Also we help manage the many potential lender conversations that will be part of the process.
For many hotel projects the acquisition is just the first step. New funding needs typically become evident after ownership has been established.
Examples:
A hotel acquisition loan should take into account the larger plan for the property. One of our examples, we financed a Mariott extended stay product in Palm Desert, that involved bridge financing for construction completion and converted into a permanent refinance. This demonstrates how one hotel project can have several capital needs over time.
A strong Hotel loan program strategy starts with the property’s current needs, timeline, and future plans. Revallon Capital Group connects commercial real estate clients with funding sources and supports the process from search through approval. This approach gives hotel buyers, developers, and investors a superior way to source capital while taking into consideration the property and its evolution.
A hotel acquisition loan is funding used to buy a hotel. The right structure depends on the property’s financial needs, timeline, development plans, and available funding sources..
Yes. Commercial real estate financing can include debt and equity. The right mix depends on the project’s structure and the funding sources available for it.
No. Specific rates, LTV, DSCR, loan amounts, credit scores and financial strength of the sponsors, repayment periods, location, brand, and hotel and market performance all affect the lender pool and rates.