Commercial mortgages for hotels

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    Growing a hotel business is an exciting time. Although finding the right hotel mortgage can be challenging – doing your research and consulting a professional will ease the process.

    Commercial mortgages are a specific type of funding used to enable business owners to obtain working capital for important business expenses. If you want to mortgage or remortgage a hotel, then you’re in the right place.

    Welcome to One, commercial funding for hotels

    With over 100 years of experience in the property industry, we have the tools and knowledge required to help you secure the best rates on your hotel mortgage. We can put you in touch with a good commercial mortgage broker and help you start your hotel business.

    Make an enquiry, and someone will be in touch soon.

    What are commercial hotel mortgages?

    A hotel mortgage is a type of commercial funding that enables you to purchase a property or borrow money against the property value to develop or expand a hotel. Hotel mortgages vary from traditional mortgages as they come with different eligibility requirements, mortgage rates and risks.

    Commercial mortgages can be used towards various ventures in the hospitality sector:

    • The purchase of a new hotel business
    • Releasing capital within an existing business
    • Refurbishment of an existing trading hotel
    • Expansion of an existing business, either by development or acquisition

    What is the eligibility criteria?

    The eligibility criteria for commercial mortgages often depend on the requirements of individual lenders and upon an analysis of your business plans and financial projections.

    Commercial lenders will not only request information on the individual’s financial health but will also consider the trading accounts and viability of a hotel.

    Industry experience of the applicant will also be a key factor. The viability of the business loan will be taken far more seriously if you have management experience in running a hotel.

    Any number of different entities can apply for commercial mortgages:

    • Sole traders
    • Limited companies
    • Partnerships
    • Individuals

    Do your due diligence and consider the different points that may impact your borrowing ability. Is this your first hotel? What are your occupancy rates? What business and marketing plans do you have?

    The right broker matching service will ensure a smooth process in finding the right lender.

    At One Commercial, we will work with you to ensure all the factors are considered, from the affordability of mortgage repayments, the company’s credit history, previous business performance, and your own industry experience ensuring that the lenders approached are the correct choice for the business.

    Interest rates for commercial mortgages for hotels

    The interest rate for a commercial mortgage for a hotel will vary, but it is usually higher than traditional mortgage rates due to the higher risk involved.

    Most lenders will offer either fixed or variable rates on a hotel mortgage. A fixed-rate will ensure your interest payments stay the same for a set period, whereas a variable rate means the interest can fluctuate.

    As with any commercial loan, the interest payable on a commercial mortgage is tax deductible, which is a clear benefit when raising finance and writing a business plan.

    Researching lenders and using a trusted hotel mortgage calculator can assist you in finding a good deal on your hotel mortgage rates.

    What other ways can I finance a hotel project?

    Various options are available to finance a hotel purchase. These often depend on your own financial circumstances and the status of the property you are buying.

    Some of the options are set out below:

    • Development finance: Can be used if you are looking to develop or renovate an existing hotel.
    • Bridging loans: Offer a short-term solution to purchase a commercial property quickly. This would be useful if you need a short-term loan to secure a new hotel purchase while you wait to sell an existing one.
    • Specialist lenders: This type of finance solution would come from a lender who specialises in and understands your unique circumstances.

    An experienced broker will have in-depth knowledge of various hotel mortgage lenders and alternative financing options for your hotel.

    Why choose One for your commercial hotel mortgage?

    Our team at One is committed to helping you secure the best possible deal for your hotel financing needs. As commercial finance specialists, we have access to a broad market share, ensuring that the best options are explored for your hotel finance.

    We will find you the right commercial mortgage broker so you have more time to focus on your hotel business. Speak to a specialist today to find the right broker for you.

    FAQs about commercial hotel mortgages

    To learn more about commercial hotel mortgages, check out our frequently asked questions below or contact us today:

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    About One Commercial

    One Commercial have over 100 years of property experience. At One Commercial we like to use a “one stop shop” approach, utilising the whole market to support our clients in a wide range of property related finance.Their job is to make sure that they have done the hard work by matching your situation to the right commercial lender and for the best deal.

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