Hotel and Motel Financing Costs and Considerations
Each week millions of people travel for personal or business reasons. With a large number of individuals traveling, often to another city, state or province, the need for hotels and motels is apparent. Many entrepreneurs are interested in the hotel industry, and owning and operating a hotel or motel can be a successful business venture; however, there are a number of financing costs and consideration that should first be looked at.
When an individual or a corporation is interested in developing a new hotel they will often need millions of dollars. Developing a brand new hotel or motel, one that people will want to visit, is a large project. It is such a large project that many financial institutions are unwilling to finance a new hotel or motel. The good new is that there are other lenders who are willing to offer financing, but it is likely that financing will not come easy.
To award financing for a new hotel or motel project, a financial lender will want to have multiple meetings with the individual(s) who will be developing and operating the business. Before a hotel will be funded, a financial lender will want to see a complete business plan. This business plan should include hotel design, information on the proposed location and projected financial statements. A small business requesting financing for less than one hundred thousand dollars is likely to have their business plan examined and scrutinized, let alone financing for a multimillion dollar hotel or motel project.
Beds frames, mattresses, desk, telephones, lamps, televisions, and clothing dressers are just a few of the many items that will be needed to run a successful hotel or motel. As with any other business it is possible to obtain business loans for these items, but leasing the equipment is another alternative. There are certain months out of the year where the hotel business may be booming, but others when it is barely scrapping by. Since owning and operating a new hotel is a large investment that does not guaranteed any immediate profits, many owners make the decision to lease their equipment.
Financing can be obtained from financial lenders to pay for the leasing of hotel equipment. In fact, this method is often preferred by a number of lenders since the business is new and has yet to prove itself. After time the leased equipment can be purchased or returned when new items are ready to be purchased. The leasing of hotel equipment is often viewed as protecting the individual(s) who have invested their savings into a hotel or motel business. If their business venture is not successful, they are able to return the leased merchandise and minimize their loss.
Lenders will examine the character of the individual(s) seeking the loan and their ability to succeed. It cannot be emphasized enough how a positive attitude will impact the financing for a hotel or motel. Anyone can propose a great business idea, but if you have the character to promote and bring that idea to the next level your business is likely to succeed. The key to getting financing for a new hotel or motel is to not only convince, but to show lenders that your background, experience and attitude will make the business a successful and lucrative venture.
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