Business Loans for Hotels
Quick Funding Process for Hotel Owners
Shield Funding knows that you need capital to run and grow hotels. That’s why we’ve been working with hotel owners for 10 years to get them the funds they need to make sure their businesses are profitable. We work with hotel owners on business loans of all types with great terms.
Running a hotel is expensive. There are a lot of operating costs, seasonal swings, and unexpected expenses that you’ll need to deal with. But hotels can also be very profitable businesses when they have the resources to maximize revenue.
Few hotel owners have those resources on hand at all times, though. Some of the expenses you run into as a hotel owner can cost tens of thousands of dollars. If you don’t have that kind of cash on hand, you’re not alone. Few business owners do. But we can help.
What Do I Need to Qualify?
Below is a list of the requirements to get approved for business funding with our most basic program. There may be additional factors that are considered, meeting these three requirements though gives you a very high chance of having your application approved.
How Do I Apply?
Applying has never been easier. You can either call our toll free number 24 hours 7 days a week at
Submit your online application by clicking apply below and entering a few basic details about your business.
Types of Business Loans Available
1. Small Business Loans
These business loans can be used for anything you need in running your hotel. Need some extra cash to make payroll? Want to fund a huge expansion to your building? Buy another hotel? A loan will help make it happen.
With this funding, you can make any investment that will help your business. And interest rates as low as 5% mean you won’t break the bank. As long as you’ve been in business for at least two months and bring in at least $8,000 in monthly revenue, you can qualify for a small business loan from Shield Funding.
Whether you need $1,000,000 or just $5,000, we’ll help you get it. We offer loans from 2–36 months, so you can get the loan that works best for your business.
2. Unsecured Business Loans
Traditional lenders will ask you to put up collateral for your loans. Which means you’re putting your hotel on the line. We don’t like to put people in that position, so all of our business loans are unsecured. No collateral required.
We know you don’t want to put your hotel up as collateral. So we’ll never ask for it.
3. Merchant Cash Advance Loans
It is common for hotels or motels to accept credit cards as a form of payment. This makes a merchant cash advance an ideal business funding option. You only need to have a credit rating of 500 to qualify and the working capital you receive can be used for any expense.
Most banks won’t give you a second glance if you don’t have fantastic credit and have been operating your hotel for 2 years. The only other requirement we ask of hotel owners is that you have been in business for two months, and have monthly revenue of at least $8,000.
And you can qualify for an interest rate as low as 12%. That’s much lower than you’d get for a bad credit small business loan at a traditional lender. We’ll even work with you to borrow up to $1,000,000.
4. Working Capital Loans
Do you need cash to make payroll? Buy more bedding and amenities? Stock the bar? A working capital loan is great for the day-to-day expenses that keep your hotel running.
You might also come across some unexpected expenses, like a broken water pipe or mold in the walls. These things need to be fixed fast, and working capital helps you make that happen.
If you have a credit rating of 650, two months in business, and at least $10,000 in monthly revenue, you can qualify for a working capital business loan. Our working capital loans have interest rates as low as 9% and terms from 12–36 months, so you can get the loan that’s best for your situation.
Financing Tips for Growing your Hotel
Paying for Labor Costs
Some studies have found that quality of service is the #1 thing that guests look for in hotels.
As a hotel owner, you already know that labor is your biggest expense. It can often account for 40–50% of operating costs. That’s a significant number, and it can really eat into your profits.
That being said, you can’t run a hotel without a great labor force. And many hotels have built their reputations on fantastic customer service. To compete with those hotels, you’ll need to invest in top-quality talent.
Whether you’re ready to take your customer service to the next level or you’re expanding and bringing on new talent, a business loan can help. You may need tens of thousands of dollars to fund a single month of labor costs. And unless you have that cash on hand, you might need some help.
It’s tempting to try to reduce your labor costs as much as possible. But don’t fall victim to this thinking. Instead, use your financial resources to provide the best customer experience possible.
Stocking or Adding Room Amenities
Other research studies have found that a hotel’s rooms are the most important factor in guest satisfaction. If you want to stand out from the competition, you need fantastic rooms.
- What does that mean?
It means having really comfortable beds. Nice bedding for all seasons. Air conditioning that works. Wifi that connects quickly and performs well. Easy access to TV. Even using Bluetooth to connect to room speakers, according to Oracle.
You might think that guests will overlook some of these amenities. And you might be right. But are you willing to risk it? Even budget hotels offer many of these features, and you can be sure that your competitors will be investing in these things.
Of course, none of that comes cheap. Refitting your hotel with faster wifi could cost thousands of dollars, depending on the size of your building. New climate control equipment could be in the tens of thousands of dollars to outfit.
And if you’re thinking about expanding your current building or opening a new one, you’ll have to consider the cost of building some of these things in from the beginning. Which means you’ll have a lot of costs on top of the already significant expenditure of construction.
These expenses pay off. It’s important to remember that early in the process and plan accordingly. Which might mean getting help from an alternative business lender.
Installing and Updating Software and Hardware
You need a surprisingly large amount of software to run a hotel. You’ll need to start with hotel management software. This is what keeps track of your reservations, lets booking services interface with your schedule, processes payments, and so on.
The cost of this software varies wildly based on the size of your hotel and a few other factors. But CloudBeds, a very affordable system, will cost you at least $200 per month for a 20-room hotel. That’s a pretty small facility, and the cost only goes up from there.
But you might need more than that, too. For example, you’ll need a workstation or two for your front desk staff. Even a simple iPad-based POS system will cost over $1,200. And depending on your hotel management software, you may need an additional POS software subscription, which could be $50 or more per month.
Because a hotel requires many employees, you’ll also want an accounting system that includes payroll. Let’s take a look at one affordable option. Gusto costs $39 per month plus $6 per person on the payroll. With 10 employees, you’ll be paying $99 per month.
That might not seem like much, but it adds up, especially if you expand your business. It’s easy to overlook software costs, but you’ll need more for running a hotel than you might with many other types of business.
Supplying Food and Drink
One of the amenities that many guests appreciate is an in-hotel restaurant. If you have one, you’ll need to plan for a solid outlay of money—the labor, food, drink, and management costs add up.
If you don’t yet have a restaurant, it’s a great way to grow your hotel business. If you can’t purchase a new building or expand yours, but you still want to earn more money, adding food and drink to your offerings makes it easy to generate more revenue.
A restaurant can generate profits from guests, but it can also bring in more business from non-guests. There aren’t very many investments you can make that do that.
Of course, starting a new restaurant isn’t cheap. You’ll need to outfit a kitchen, hire cooks, servers, and dishwashers, and make sure you keep food and drink stocked. If you plan on serving alcohol, you’ll need a license, too, which could be expensive, depending on you location.
That being said, this is an investment that can pay off big. It’s worth looking into, and if you can get a small business loan to help, it’s a very attractive way to grow your business.
Would you like to chat further about how we can help you run or expand your hotel business? Give us a call!