Lender Landscape
Top Hotel Lenders: Who Actually Finances Hotels
Hotels are operating businesses, and hotel capital is specialized. Eight distinct lender types finance hospitality in the United States — each with a different leverage ceiling, pricing basis, and tolerance for transition. Matching the asset to the right source is worth more than negotiating with the wrong one.
CMBS Conduit Lenders
Best for: Stabilized, flagged, cash-flowing hotels
Loan Size
$5M – $150M
Leverage
Up to 70% LTV
Pricing Basis
10-yr Treasury + 200–275 bps
Conduit lenders originate fixed-rate, non-recourse loans for securitization. Best execution for stabilized select-service and full-service hotels with two to three years of consistent operating history and a franchise agreement running past loan maturity. Trade-off: defeasance or yield maintenance on prepayment and limited flexibility for mid-term capital events.
Debt Funds & Bridge Lenders
Best for: Transitional assets, PIP funding, repositioning
Loan Size
$5M – $250M
Leverage
Up to 75% LTC
Pricing Basis
30-day Term SOFR + 300–550 bps
Debt funds underwrite the business plan rather than trailing cash flow, which makes them the primary source for acquisitions with a PIP, brand conversions, ramp-up assets, and maturity takeouts. Floating rate with a rate cap requirement, 12 to 36 month terms with extensions, and closing timelines of two to four weeks.
SBA 7(a) and 504 Lenders
Best for: Owner-operated hotels, first-time and expanding operators
Loan Size
Up to $5M (7a) / $20M+ (504)
Leverage
Up to 85–90%
Pricing Basis
Prime + 1.50–2.75% or 504 debenture
SBA programs deliver the highest leverage available to owner-operators. The 504 structure pairs a bank first mortgage with a fixed-rate CDC second, while 7(a) offers a single variable-rate loan up to $5 million. Requires owner-operation, personal guarantees, and a longer approval cycle than conventional debt.
Regional and National Banks
Best for: Strong local sponsors with deposit relationships
Loan Size
$3M – $75M
Leverage
60% – 65% LTV
Pricing Basis
SOFR or Treasury + 225–325 bps
Banks offer the lowest all-in cost for sponsors with an existing relationship and a track record in the submarket. Expect full or partial recourse, tighter debt service coverage tests, and covenant reporting — but faster credit decisions and no prepayment defeasance.
Life Insurance Companies
Best for: Trophy and irreplaceable full-service hotels
Loan Size
$10M – $250M
Leverage
Up to 60% LTV
Pricing Basis
Matching Treasury + 140–200 bps
Life companies price the tightest spreads in the market for low-leverage, high-quality assets in primary markets. Long fixed terms, non-recourse, and highly certain execution — but conservative proceeds and selective on hospitality generally.
Mezzanine and Preferred Equity Providers
Best for: Filling the gap between senior debt and sponsor equity
Loan Size
$2M – $100M
Leverage
80% – 90% combined
Pricing Basis
10% – 15% total return
Gap capital that sits behind the senior loan. Mezzanine is secured by an equity pledge under an intercreditor agreement; preferred equity is structured inside the ownership entity with a priority return. Both require senior lender coordination and are placed alongside the senior loan.
C-PACE Providers
Best for: PIP energy, HVAC, roof, and envelope scope
Loan Size
$1M – $50M
Leverage
10% – 30% of cost
Pricing Basis
6% – 9% fixed, 20–30 yr amortization
Commercial Property Assessed Clean Energy financing funds eligible energy and resiliency components of a renovation as a tax assessment rather than a mortgage. Long amortization, no acceleration on sale, and increasingly used to reduce the equity check on hotel PIPs in enabled states.
EB-5 and Alternative Capital
Best for: Ground-up hotel development in targeted employment areas
Loan Size
$10M – $100M
Leverage
Gap layer
Pricing Basis
Program dependent
Program-driven capital used almost exclusively for new construction in qualifying areas. Longer formation timelines and heavy compliance requirements, but low current pay relative to mezzanine.
How we run a hotel financing process
- Underwrite the asset to lender standards — TTM NOI after a 4% FF&E reserve, STR penetration indices, and a defensible PIP budget.
- Shortlist the lender types whose credit box actually fits the story rather than blasting the market.
- Run a competitive process so spread, proceeds, and structure are negotiated against real alternatives.
- Manage third-party reports, lender diligence, and closing so the timeline holds.
Frequently Asked Questions
Who are the best hotel lenders in 2026?
There is no single best hotel lender — the right source depends on where the asset sits in its lifecycle. Stabilized flagged hotels get their best pricing from CMBS conduits and life companies; transitional assets and PIP-driven acquisitions belong with debt funds and bridge lenders; owner-operators get the highest leverage from SBA 7(a) and 504 programs.
How much can I borrow against a hotel?
Conventional non-recourse hotel debt typically reaches 60% to 70% of value on stabilized assets and up to 75% of total cost on bridge deals. SBA programs reach 85% to 90% for owner-operators, and mezzanine or preferred equity can lift combined leverage to 85% to 90%.
What DSCR do hotel lenders require?
Most hotel lenders underwrite to a minimum 1.35x to 1.45x debt service coverage on trailing twelve month net operating income after a 4% FF&E reserve, plus a debt yield floor commonly in the 11% to 13% range.
Can I finance a PIP or brand conversion?
Yes. Bridge and debt fund lenders routinely hold back PIP dollars in a future funding facility, sized against the post-renovation value. C-PACE can fund the energy-eligible portion of the scope at a lower cost and longer amortization.
How long does hotel financing take to close?
Bridge and debt fund loans close in two to four weeks. CMBS and bank loans generally take 45 to 60 days. SBA 504 transactions run 60 to 90 days because of the CDC approval process.
Financing a hotel?
Send us the asset and we will come back with the lender types that fit, indicative terms, and the path to a signed term sheet.
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