Loan Options

MidCap steers your hotel loan process. We advocate, negotiate and review while providing you with exceptional access and communication.

Permanent Loans

Permanent loans are used to buy hotels or refinance existing hotels. They are also great for financing property improvement plans (PIPs). Permanent loans typically have a term of ten years, or longer. The interest rate for a permanent loan is most often fixed during the life of the loan. Permanent loan sources include CMBS lenders, the SBA, the USDA, and sometimes, conventional banks.

Learn more about Permanent Loans

CMBS – CMBS is often the best source of financing for hotel properties. Some of the benefits of CMBS loans include:
- the lowest rates
- very high leverage (i.e. low down payment)
- the best way to finance things like partner buy-outs, PIPs, etc.
- the optimal way to complete a cash-out refinance
- the longest amortizations at 30 years
- non-recourse, except for carve outs
- sometimes interest only

SBA 7(a) and 504 Loans –Small Business Administration (SBA) loans are a great way to build, buy or refinance a hotel property. These loans offer favorable terms and a high loan-to-value (LTV). At MidCap Hotel Loans we save you time and frustration by only working with lenders that are part of the SBA’s Preferred Lenders Program. Let us spearhead the entire SBA process for you.

USDA – Hotels in rural or suburban areas could qualify for financing through the U.S. Department of Agriculture’s (USDA) Business and Industry Guaranteed Loan Program. The USDA program promotes rural economies by providing financial backing for rural businesses that create jobs. You can use a USDA hotel loan to build a new hotel, buy an existing hotel or repair/modernize an existing property. Other uses may also be approved by the USDA. Call us today to see if your hotel property is in a USDA eligible area.

Conventional Banks – Conventional banks have never been a great source for hotel loans. Internal policies restrict or limit the volume of loans they offer to hotel owners. Currently, many banks are not even offering hotel loans. Fortunately, we have many other options to finance your hotel property.

Let MidCap Hotel Loans find your best fit!

Bridge Loans

Bridge loans have many uses but generally take you from Point A to Point B. For instance, they can provide short-term financing to bridge the gap between acquisition of a new hotel and securing a permanent, long-term loan on your hotel. Bridge loans may also be used to fund a Property Improvement Plan (PIP) or a flag conversion.

Learn more about Bridge Loans

While bridge loans are usually more expensive than permanent financing, they can provide the flexibility that you need with shorter terms and usually no prepayment penalties. Bridge loans normally carry a 3-year term and two, 1-year extensions. Payments are typically interest only. Bridge loans can be the perfect fit for an owner looking to add value to a hotel property through a PIP or conversion and then sell or refinance.

These days, bridge lenders seem to pop up on every corner making big promises to borrowers. However, a loan from these unproven lenders can be risky business and often leads to headaches and lost deposits. MidCap Hotel Loans only deals with well-established bridge lenders that have committed capital and a proven track record. We also steer you clear of loan-to-own shops whose intention is not to be repaid but actually to own your hotel in the end. Bridge loans are an excellent source of financing, but do not navigate these waters alone.

Call MidCap Hotel Loans today. (727) 223-8989

Construction Loans

Finding a hotel construction loan is becoming increasingly difficult. Traditional banks are more likely to lend to borrowers with significant development experience and an attractive net worth and liquidity.

Learn more about Construction Loans

Banks may be more willing to extend hotel construction loans to more borrowers under the SBA-backed program. SBA loan proceeds can be used for land acquisition and ground-up hotel construction.

MidCap Hotel Loans stays in contact with many traditional banks across the country including lenders that are part of the SBA’s Preferred Lenders Program. If construction financing is available for your hotel, we will find it!