Hospitality Loans

Hospitality Loans

Our team of personal financial consultants specializes in offering trusted lending services. We have a well-established track record for providing hospitality financing to our clients. If you are looking for a financing option to keep your hospitality business profitable, on track and achieve your long-term goals, a hospitality loan can help. 

 It doesn’t matter if you are in accommodations, food and beverage, or travel and tourism industry. Our team can help capitalize your business’ potential with access to the right mortgage loans, and we can do it fast.

Our focus is to get you the capital you need and when you need it, all while providing seasoned guidance to help you maximize your return on investment.

We are devoted to establishing a long-term relationship with you. Our aim is to ensure that you get to capitalize on new business opportunities and ventures as they develop. Here are some valuable options to put hospitality financing to work in your business:

  • Opening a new business location

  • remodeling or remodeling your existing establishment

  • Expanding your offerings, products or services 

  • Ensuring that your business operations are more efficient than ever

What are Hospitality Loans?

A hospitality mortgage is a financing option designed specifically for businesses operating as Hospitality Company including hotels, motels, inns, bed and breakfasts, and hostels. A hospitality loan is entirely different from other types of financing because it uses underwriting criteria that accommodates the unique needs of your hospitality business. 

The main reason behind it is that the motels, hotels, and others players in the hospitality industry have additional sources of income apart from to their day to day operations. These income sources may originate from pay-per-view movies, business center services, telephone charges, internet charges, restaurant meals, and other add-on amenities. 

All of these income streams contribute to your net operations and the underwriting process needs to allow for it in addition to their room revenue. Typically, hotel owners would probably not qualify for traditional bank loans. The primary reason is because the underwriting process does not take into account anything outside of their net room operations. 

At ARF Financial, we fully understand the unique set of issues you face as a hoteliers. Our team has created loan products that are just perfect for motels, hotels, bed/breakfasts and inns owners. Our hospitality mortgages and financing include working lines of credit, capital loans, bridge loans and more.

Benefits of a Hospitality Mortgages

A hospitality mortgage ensures that your lenders have realistic expectations for your loan. This also means the lenders will consider seasonality and make adjustments for those with slow cash flow periods. This is something you will not get with a conventional bank loan. Other benefits of our hospitality loans include:

  • Less than perfect credit is not a barrier

  • Collateral is not required on amounts up to $500,000

  • Flexible terms up to 18 months

  • There is very little paperwork

  • Approvals are granted quickly

  • Excellent customer service

  • The interest is tax deductible

  • No hard credit pulls so your credit score won’t be affected.

In case you the owner of a motel, inn, hotel or bed and breakfast, let our team at ARF Financial guide and assist you through the entire process of securing hospitality loan for your business.

 

Hospitality Loans and Their Uses

Hospitality loans allow you to make the most of emerging opportunities. The opportunity can be anything such as a chance to open another location.  It may also be adding a restaurant, a pool, a bar or a patio to attract more customers 

No matter what the future holds, ARF Financial is your best choice for capitalizing on new potential, especially when conventional banks simply won't consider it. You can secure a loan amount between $5,000 and $1,000,000 without the aggravation that comes with dealing with the bank. 

We are well aware of almost every business reason why your hospitality business may need a line of credit. Every couple of years, someone will truly surprise us but such instances are rare. Don’t be alarmed if you cannot see your business reason below. This may be because we have most likely already processed a mortgage for it.

Our team can correctly assist and guide you through the entire process. Below are just a few reasons why hotel owners have chose us in the past few decades. Because of our special expertise in the hospitality industry, ARF Financial is able to analyze your specific business challenges and opportunities, maximizing the potential for the financing you need to grow.

  • Equipment financing

  • Inventory financing

  • Renovations

  • Expansions

  • Buy/open a new location

  • Buy/open a franchise

  • Pay for franchise obligations

  • Liquor licenses

  • Other licenses

  • Signage

  • Adding catering services

  • Revamping restaurant menu and bar options

  • Marketing and advertising the business

  • Adding other services

  • Upgrading computer systems

  • Pay business taxes

  • Pay off expensive loans and cash advances from other companies

  • Operating capital for Slow Cash Flow Periods or Seasonality

  • Buy out a business partner

 

How Can You Qualify For A Hospitality Loan

Just like any other types of business financing, a hospitality loan comes with several qualifying criteria. Fulfilling a single requirement will not be enough to guarantee a hospitality loan. However, as a hotel owner you must stay prepared to provide key documents about your business. the lenders may even ask you for personal data for a review before offering you a line of credit.

 

Time in Business

A key criterion of a hospitality loan is the number of years the hotel has been operating. Even if your hotel has adequate cash flow with an excellent credit score, you still may not receive a hospitality loan if the time in business falls short of the required minimum. 

At ARF Financial, if you are a hotel owner in business for a minimum of 1 month, you can qualify for a hospitality loan. Again, we will work with your unique circumstances as much as possible. This includes balancing the desired loan amount with credit scores, cash flows, time in business, etc.

Business Checking or Savings Accounts

When it comes to qualifying for a hospitality loan, a checking account gives definitive evidence of the business’ cash flow. If your hotel does not have one, it can create difficulty assessing your creditworthiness for a hospitality loan. 

Typically, we will need proof of at least three months of bank statements. This will corroborate information from your accounting documents. Additionally, it will provide insights into your cash flow and the overall financial health of your restaurant/hotel. 

 

Loan Amount

It may come as a surprise to you but the amount you apply for in your hospitality loan application also affects its approval process. The total amount of the loan you request will have a considerable impact on your repayment options available. This, in turn, will also affect the amount of your weekly or monthly repayments.

Let’s say you are the owner of a small hotel with a smaller yet consistent cash flow. In this case, you may be eligible to get a loan for a large sum because it will require you to make larger weekly or monthly repayments.

Credit Score

Please note that we did not list your credit score as the first or most important qualifying criteria for a hospitality loan. Your score cards are very important numbers that can be the determining factor for your loan application for a conventional bank loan; At ARF Financial we use a unique combination of criteria. 

Our team works with your unique circumstances in order to make a final decision. We also work in partnership with many banks to offer more financing options for hotel business owners with a less ideal credit score but have a good operating potential.

 

Annual Sales

ARF Financial requires your business to generate a minimum of $100,000 annual income in order to qualify for one of our hospitality loans.

Debt to Credit Ratio

At ARF Financial, like most lenders, we will also examine your debt to credit ratio in order to qualify for our hospitality loans. If your hotel carries too much debt, we will also offer you to pay-off your competitor loans; however, this depends on if your business qualifies. 

We will also examine your personal debt-to-credit (DTC) ratio because if your business ever runs into cash flow problem you DTC offer is an avenue of opportunity

 

Reason for The Loan

Unlike other lenders, ARF Financial does not dictate what the business line of credit loan is used for. We do specify that you will use loan proceeds for business purposes only. However, there have been a few instances where a specific loan dictated certain terms, such as when used for competitor payoffs. 

Many lenders will not accept third-party payoffs on their loans and cash advances. In such instances, ARF Financial will grant you the loan proceeds and include legal language to guarantee the loan proceeds are used to pay off those competitor loans only. This guarantees the hotel’s cash flow is not compromised by having too many loans on the books.

Hotel-Specific Qualifying Criteria

Hospitality loans and financing require lenders like ARF Financial to take a hard look at each individual department’s profitability. Therefore, you must be prepared to share income, expenses, and other revenue statements for each department. 

The lenders will make you hospitality loans decisions essentially based on the review of what is available your consolidated operating statements of each hotel.