top hotel construction lenders

Top Hotel Construction Lenders in 2024

Finding the top hotel construction lenders is essential to getting money for your hotel construction project. There are still choices for borrowers in 2024, even though lending is more challenging than it used to be. Here's a quick list:

  • Traditional Banks: Wells Fargo and Bank of America, two big banks, are slowly returning to the hotel construction loan market. There are, however, times when they need solid client profiles. They might offer lower loan-to-value rates, so you'll have to make a more significant down payment.

  • Specialty Lenders: These lenders focus on the hotel and restaurant business and may be more open to loan terms. However, they might charge more in interest.

  • Alternative Lenders: Private equity companies and other non-bank institutions increasingly offer construction loans, but the terms differ.

Why Finding the Right Lender Matters

It's not just the interest rate that makes a loan good. A good fit will consider the specifics of your project, offer fair terms, and have experience in construction hotels. They shouldn't just give you money; they should be a part of your success.

Different Types of Hotel Construction Loans

Loan TypeDescriptionAdvantagesDisadvantages
SBA LoansThese loans, which the Small Business Administration (SBA) offers, typically have lower interest rates and longer terms than conventional loans. Provided by the Small Business Administration (SBA), these loans usually have lower interest rates and longer terms than traditional loans.Lower interest rates, longer termsStricter eligibility requirements
Bridge LoanA short-term loan is used to fund financing between stages of a project.Can cover unexpected costs or the period between construction completion and permanent financingShorter terms, higher interest rates
DSCR Loan (Debt Service Coverage Ratio)It focuses on the project's cash flow to qualify the borrower rather than relying solely on credit history.Beneficial for projects with substantial projected incomeIt may require more complex documentation
Hard Money LoanPrivate loans from individuals or investment groups.Typically quicker to close than traditional loansHigher interest rates, stricter terms
Private Lender's LoanLike hard money loans, private lenders offer financing outside traditional banks.May be more flexible with termsOften charge higher rates
Business Statement of Income (BSI) LoanIt relies on the borrower's business income statements, rather than tax returns, to qualify for financing.It can be helpful for new businesses or those with complex tax structuresIt may not be widely available
Term LoanA traditional loan with a fixed interest rate and a set repayment schedule.Suitable for projects with stable cash flow projectionsLess flexibility than some other options
USDA B&I LoanOffered by the United States Department of Agriculture (USDA) for rural business development, including hotel construction in qualified areas.Favorable termsEligibility is restricted to qualified rural areas.

To finance the construction of your hotel, you need to know about the different loan choices out there. Picking the right type is very important for the success of your project because each has pros and cons. Here is a list of some typical hotel construction loans:

Government-Backed Loans

  • SBA 504 Loan: The U.S. Small Business Administration (SBA) program lets people buy and fix up real estate with long-term, fixed-rate loans. It works well for smaller projects that focus on making jobs.

Short-Term Financing

  • Bridge Loan: This short-term loan is used to "bridge the gap" between getting permanent financing and beginning construction. Most bridge loans have high interest rates and short repayment terms. This makes them suitable for covering unexpected costs or buying land before getting stable financing.

Traditional Loans

  • Debt Service Coverage Ratio (DSCR) Loan: This loan is based on how much money the project is expected to bring in, not the borrower's credit history. For the loan to be accepted, the project must make enough money to pay back the loan, including principal and interest.

  • Hard Money Loans: These short-term loans from private lenders have real estate as security. Getting approved quickly is easy, but the fees and interest rates are high. These loans work best for experienced investors who need quick cash to buy land or deal with unexpected issues.

  • Term Loan: A typical loan has a set due date and an interest rate that can be stable or variable. Term loans are suitable for companies that have been around for a while and have a good track record with money.

  • Business Statement of Income (BSI) Loan: Instead of tax returns, this loan uses the borrower's business income accounts to decide if they are qualified for the loan. It might be helpful for new businesses or ones with complicated tax forms.

Specialized Loans

  • USDA B&I Loan: For projects in rural places, the U.S. Department of Agriculture (USDA) gives out Rural Business Development Grants (B&I). These loans can be an excellent way to build hotels in areas that need more of them.

The Lending Ecosystem: Correspondent Lenders and Superbrokers

Knowing more about the lending environment is important than just the types of loans available. Here are two important people:

Correspondent Lender

When correspondent lenders make loans, they transfer them to other businesses, like banks or insurance companies. They can be more flexible with loan terms and offer a broader range of goods. Even so, getting approval can take time and work.


A super broker helps people who need loans get loans from a network of lenders. They can help you find the best loan for your project based on your skills and needs. Most of the time, they charge for their services.

Considerations When Choosing The Top Hotel Construction Lenders

There are many things to consider when choosing the top hotel construction lenders, besides just getting the money. Here are the most important things to look at:

Loan Amount and Project Size Compatibility

  • Match Your Needs: Ensure that the lender offers loan amounts that fit the budget for your job. There may be better choices than a lender focusing on minor repairs for a large hotel construction project.

Experience in Hospitality Financing

  • Industry Expertise: Find a company with a history of donating money to hotel construction projects. Because of their experience, they have a better grasp of the unique problems and chances in the hotel industry. During the loan process, they can give you helpful advice and insights.

Loan Terms and Interest Rates

  • Competitive Rates: Compare the loan terms and interest rates different lenders offer. Look at something other than the interest rate; also think about things like early payment fees, penalties, and the general structure of the loan.

Flexibility and Responsiveness

  • Adaptability is Key: There are usually some shocks in construction projects. Pick a company that will work with you even if something goes wrong. If needed, an open lender can change the loan terms to keep your project on track.

  • Open Communication: During the loan process, make sure the lender answers your questions and addresses your worries. Communication must happen on time for a job to go smoothly and succeed.

If you put these things at the top of your list, you should be able to find a top hotel construction lender who can help your project succeed financially.

Top Hotel Construction Lenders in 2024 (Industry Reputation & Recent Activity)

While it's hard to give a clear ranking, here are 5 top hotel construction lenders in 2024 that are known for their focus on the industry and active lending:

1. Wells Fargo

A central national bank with a lot of experience supporting hotels and resorts. They have competitive terms for qualified borrowers and a range of loan options, such as construction loans, permanent loans, and loans for home improvements.

2. Commercial Lending USA

Commercial Lending USA specializes and has a lot of experience in hospitality real estate. They offer a range of loan options for hotel construction, such as bridge loans and long-term financing options. They are known as correspondent lenders and superbrokers for being open and ensuring projects can work. They have a unique platform for bridge, conventional, SBA, and USDA.

3. Bank of America

Another big name that lends a lot of money to hotel construction. They are known for being committed to green building techniques and being good at financing big projects.

4. East West Bank

A bank based in California is giving more and more money to hotels nationwide. They are known for being open to projects in different stages of growth and being able to adapt to new situations.

5. Bank OZK

This regional bank became the leader in 2024 with its hotel construction loans. They have reasonable rates and are open to projects with good client profiles.

More lenders are out there; the best one for your project depends on your wants and qualifications. Before making a choice, it's always wise to study and look at what different lenders offer.

Hotel Developers' Access to Extra Materials

Along with loans, the following people can help hotel owners:

Associations for Commercial Lending

The American Bankers Association (ABA) and the Mortgage Bankers Association (MBA) are two groups that can help with business loans, like getting money to build a hotel.

Associations in the Industry

To get help in the hotel and lodging business, join or contact groups like the American Hotel & Lodging Association (AHLA) or the Asian American Hotel Owners Association (AAHOA). Members of these groups can get learning tools, chances to network, and business news.

Websites for commercial loans

Lots of websites, like Commercial Lending USA, tell people about possible lenders and put them in touch with them. But it's important to talk to lenders in person and compare rates and terms.

Conclusion: Securing Your Hotel Construction Loan

You need to plan and choose the right lender to get funds for your hotel construction project. Just a quick review:

  • Match Your Needs: Choose a lender with experience financing hotel projects who offers loans in an amount that fits the size of your project.

  • Compare Options: It would be best if you didn't accept the first offer that came your way. Get quotes from multiple lenders and compare loan terms, interest rates, and the flexibility of the loan.

  • Build a Partnership: Find a lender with experience financing hotel projects who can give you loans in an amount that fits the size of your project.

After doing these things, you should be able to get the money you need to make your hotel dream come true.

Expert Guidance

Even though this guide is a good starting point, you might want help from a professional for your specific job. Contact the experts at Commercial Lending USA for personalized help navigating the world of hotel building financing. They can contact lenders and help you get the best loan terms for your job.


What is the typical down payment for a hotel construction loan?

Different lenders and projects have different down payment needs. Still, they're usually between 25% and 40% of the whole project cost.

What is a loan-to-value (LTV) ratio?

The loan amount-to-value ratio matches the loan amount to the property's value. Lenders may be willing to give up to 70% of the project's estimated value for loans to build a hotel.

How long does it take to secure a hotel construction loan?

Getting a loan can take three to six months, depending on the project's complexity and what the lender wants.

What critical documents are required for a hotel construction loan application?

A thorough business plan, financial projections, market analysis, pro forma statements, and personal financial statements of the borrower(s) are usually needed.

Can I use personal assets as collateral for a hotel construction loan?

Lenders often look at personal assets like homes or stock portfolios as security for the loan.

Are there any government programs available to help finance hotel construction?

Some government programs, like SBA loans, can help hotel construction projects by giving better terms. But there may be standards for eligibility.

Sam Haq, CEO

Commercial Lending USA

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