Hotel finance: refurbishment, acquisition and cash flow

Answer in brief

Hotels and B&Bs usually fund purchases with a commercial mortgage, refurbishments with a term loan or development facility, and cash flow with a short-term loan. Lenders look at occupancy, average room rate, trading history and the property's value.

What lenders look at

Occupancy and average room rate
Revenue per available room
Trading accounts
Property valuation

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