Having a tough time getting a bank loan for your hotel? That’s because many local and regional lenders are uneasy creating loans in an unstable economy and are often unfamiliar with national hotel franchising contracts.
Hotel projects that use brands certified by the US Small Business Administration (SBA) and the Franchise Registry receive a streamlined process and faster financing approvals, cutting months off the typical loan process.
“If you want to achieve hotel financing, the SBA is effective and highly proven,” stated Jack Heath, President and COO of Washington Trust, the oldest and largest privately owned commercial bank in the Pacific Northwest. “Hotel owners who work with brands who are pre-approved by the SBA franchise registry ensures the application can be processed more expediently and can streamline the approval process, resulting in a better chance of securing more money faster.”
Loan applications for franchises listed on the Franchise Registry can be reviewed and processed faster and more efficiently by the SBA and its lenders because the respective franchise agreements do not need to be reviewed in each individual situation. Under this plan, SBA guarantees 75%-85% of the loan, which lowers risk to banks, increasing willingness to provide hotel loans based upon registered brands.
Affiliating your hotel with a major brand does not always have to be expensive. While the costs of franchising with most major brands can be high, between 15-25% of gross revenue, newer and more effective brands can be hired for 5% or less.
Basic requirements for an SBA loan:
What information will you need?
Choosing the lending institution carefully:
What is the range of SBA Loans?
Good luck – now you know the insider’s way to secure an SBA loan for your hotel.
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