Hospitality Financing: What You Need to Know
Many people prefer bed and breakfasts (or B&Bs as they’re often referred to) and smaller motels and resorts over larger hotel chains because of the “extras” that come with this type of stay. These often include:
- Staying in a room that is rich in history and has a unique character and ambience;
- Having the opportunity to easily engage with and get to know guests from other areas of the world;
- A more personal level of service, catering to your individual needs;
- And—in the case of B&Bs specifically—access to a home-cooked meal to start your day.
Statistics suggest that there are currently approximately 17,000 bed and breakfasts in the United States alone, with accommodations in this category having an estimated total worth of $3.4 billion. If your dream is to add to this number by starting your own bed and breakfast, or if you already own a small motel or resort and want to take bigger chunk of the total worth, there are some things you need to know about your financing and small business loan options.
What Type of Financing Is Available for Bed and Breakfasts, Motels, and Resorts?
The type of financing that would work best for your B&B, motel, or resort depends largely on your goals and where you are in the process. For example, if you own a piece of property that you feel would be the perfect spot to place a small motel, then you may be in need of a construction loan to finance the building of your dream accommodations.
Or maybe you don’t even have the property yet? That’s okay, because there are also loans available that can help you secure the land that will become the future home of your bed and breakfast, motel, or resort.
Perhaps you already own a small resort and want to sell it to buy one that is bigger and would enable you to house more guests? A bridge loan can help you accomplish that goal, enabling you to purchase the new property, while covering you financially until your current property sells.
Another rather common form of small business financing is a line of credit. A line of credit gives you access to the cash you need when you need it, so you can take care of the day-to-day operations of your business. This particular financing is especially helpful if:
- business has been particularly slow,
- if you have had unforeseen capital needs,
- or if you’re working on a smaller project but aren’t completely sure of the final cost.
Depending on your circumstances and needs, other options may include merchant cash advances, small business loans, and a wide variety of other alternatives.
How Can I Use My Loan?
When you are financing a bed and breakfast, securing a motel loan, or obtaining resort capital, you are able to use the funds in a number of different ways.
For instance, if you’re in the beginning stages, you may decide to use your bed and breakfast business loan to renovate your home and add bedrooms and bathrooms so it can accommodate a certain number of guests. Or, if it’s a motel or resort that you’d like to build, you may decide to use your financing options to purchase property and then build the accommodations and amenities you want to offer your guests.
If your small motel or resort is already up and running, some additional financing may be just what you need to help you expand your property. Perhaps you want to offer a workout room for your fitness-minded guests or a spa for the guests who have come to you to relax. A motel loan may also be used to update rooms or give your property a little facelift, which can be helpful if you’ve been in business for some time and could use some more modern conveniences.
The financing can also be used to acquire the items and inventory you need to provide your guests a stellar experience. Whether you need to replace all of your towels, buy more little soaps and shampoos, or fully stock the snacks in your on-site store, you can do all of these things with the monies you secure.
Your loan can also be used for the purchase of new equipment. This can include industrial washers and dryers to take care of your sheets and towels, or new lawn care equipment to take better care of the grounds during the winter or summer months. And if there’s one season that is particularly slow for your business, a bed and breakfast loan may be just what you need to get you through until business picks up again.
What Else Do I Need to Know About My Loan?
When applying for a loan to finance your bed and breakfast, small motel, or resort, many new and seasoned business owners are concerned about the impact that their credit scores will have on their ability to borrow money. Admittedly, having bad credit may make it more difficult to get a traditional business loan, but it is still possible to obtain financing with less-than-stellar credit. This is where alternative lenders like BFS Capital come into play, enabling you to pursue your business ownership dreams even if you have a couple of negative marks on your financial past.
Also, traditional small business loans generally require a mound of paperwork and months upon months to secure. That isn’t the case with a number of the financing options through BFS. We’re often able to get you approved within a couple of business days. And we do it with the completion of fewer documents, which means that you’ll spend less time at the bank and more time planning how to make your resort the greatest success that it can be.
BFS Capital Knows Hospitality
Here at BFS Capital, we pride ourselves on working with clients in industries that we’re more than familiar with, one of which is hospitality. This enables us to provide you with the capital you need to create the type of bed and breakfast, small motel, or resort that will keep your guests coming back year after year. Additionally, we may even be able to help you foresee future needs or services so you can take care of them up front, before they become obstacles or roadblocks to your business goals.
Whether you’re in the beginning stages of bed and breakfast ownership or you have a long-standing motel or resort that could use a little updating, BFS Capital is here to help. Contact us by phone at (866) 905-43345 or apply conveniently using our online form. Our goal is to help you reach your business goals, so that’s what we’re here to do.