Tap to get financing
Nasdaq: JNVRSBA 7(a) Loans
SBA 7(a) Loans
Uses for the SBA 7(a) LoanCompare SBA LoansFund a StartupBuy EquipmentGet a Commercial MortgageRepair CapitalRefinance Business DebtGet a Working Capital LoanBuy a BusinessLearn About the SBA Lending ProcessFind an SBA Lender
Requirements Rates Loan Calculator
SBA Tools
SBA 7(a) Loan CalculatorSBA 504 Loan CalculatorEnsuring a Smooth CloseSBA Form 1081 Guide
Blog
About Us
About usContact us
(561) 559-5551 Get financing →
Close sba7a.loans is an independently owned and operated website and has no government affiliation. We are not the Small Business Administration and are not a lender. If you are trying to reach the SBA click here to be redirected.
Interest Rates

Today’s interest rates for all SBA loans
Check Today's Rates →

Newly Published
Sep 21 at SBA 7(a) Loans
The ‘Hidden’ Costs of SBA 7(a) Loans
Sep 13 at SBA 7(a) Loans
How to Write a Business Plan for an SBA 7(a) Loan
Sep 12 at SBA 7(a) Loans
Why 2023 Is the Right Time to Buy a Business
Explore the Janover Network
Sep 29 at SBA 504 Loans
SBA 504 Loans for Preschools and Daycare Centers
Sep 26 at HUD Loans
What Is Fair Market Rent? 2024 FMR Calculator by ZIP
Sep 25 at Multifamily Loans
Multifamily Minute Reader Reflections: How Do You Communicate Rent Increases?
Was This Article Helpful?
Small Business and SBA Lending Blog
Last updated on Aug 2, 2023
3 min read

Using the SBA 7(a) Loan for a Bed and Breakfast

SBA loans are available for B&Bs. Find out how this financing could give your business the boost it needs.

In this article:
  1. Case Study: Reimagining a Napa Valley B&B
  2. Other Financing Options
  3. How Do I Find a Lender?
  4. Related Questions
  5. Get Financing
Start Your Application and Unlock the Power of Choice Experience expert guidance, competitive options, and unparalleled industry expertise.
Click Here to Get Quotes →
$5.6M offered by a Bank at 6.1%$1.2M offered by a Bank at 6.0%$2M offered by an Agency at 5.6%$1.4M offered by an SBA Lender at 9%Click Here to Get Quotes!

Like much of the rest of the U.S. economy, the bed and breakfast (B&B) and hostel accommodations industry is experiencing significant growth, and it's on track to continue for the foreseeable future.

Need a business loan for your bed and breakfast? Banks and other lending institutions are willing to approve them, and the SBA 7(a) loan is a great choice for taking on a business mortgage. The loan is versatile, terms are straightforward, and eligibility requirements are generally no problem for business owners.

Here’s a look at some of the things you can do with the SBA 7(a) loan:

  • New construction of a B&B facility. Building a new B&B can be expensive, but any of the costs can be covered by the SBA 7(a).

  • Refinancing a bed and breakfast. The funds from the SBA 7(a) can be used to refinance an existing loan. There are specific conditions for the loan to be used this way; for more information, check out our page on refinancing debt.

  • Buying an existing building. You may find it cheaper to buy a vacant site rather than to build. The SBA 7(a) loan allows for the purchase of commercial real estate and land.

  • Case Study: Reimagining a Napa Valley B&B

    Marissa had always been passionate about hospitality and dreamed of owning a bed & breakfast in the heart of Napa Valley. After years of hard work and dedication, she finally acquired a quaint, historic B&B in St. Helena, surrounded by picturesque wineries and vineyards. The location was perfect for tourists seeking a relaxing getaway and wine-tasting experiences.

    The existing B&B had a certain charm, of course. But Marissa knew that to compete with other luxury accommodations in the area, she needed to modernize and expand her offerings. She envisioned adding a few more guest rooms, renovating the existing suites, and creating a beautiful outdoor space where guests could enjoy their morning coffee or evening wine.

    However, Marissa faced challenges in securing the necessary funds to make these improvements. Traditional banks were reluctant to lend her the required capital, as they considered the hospitality industry high risk.

    Undeterred, Marissa explored the possibility of obtaining an SBA 7(a) loan to finance her B&B improvements. She diligently put together a comprehensive business plan and financial projections, highlighting the potential growth in revenue and occupancy rates with the proposed enhancements.

    Marissa approached an SBA-approved lender in the region and presented her vision for transforming her B&B into a luxurious and sought-after destination. The lender was impressed with her detailed plan and her dedication to providing an exceptional guest experience.

    They approved a $425,000 SBA 7(a) loan with a 15-year repayment term and a low, fixed interest rate. With the funds in hand, Marissa was able to renovate the existing guest rooms, add three new suites, and create a stunning outdoor patio overlooking the surrounding vineyards.

    The upgrades and enhancements made a significant impact on the B&B's bookings and customer satisfaction. Guests raved about the luxurious accommodations and the attention to detail, turning Marissa's bed & breakfast into a must-visit destination in Napa Valley.

    This is a fictional case study provided for illustrative purposes.

    Other Financing Options

    Our team works with business owners on other government-backed loan programs as well.

    The SBA 504 is a loan, for example, which offers greater potential financing compared to an SBA 7(a) loan. The 504 loan often has more favorable terms than the 7(a), including a lower down payments and interest rates. However, they require significantly more paperwork and bureaucracy, so they take much longer to close.

    How Do I Find a Lender?

    Get a free, tailored quote, or learn more about the SBA 7(a) loan program. Put your details in the form below.

    Related Questions

    What are the eligibility requirements for an SBA 7(a) loan for a bed and breakfast?

    The eligibility requirements for an SBA 7(a) loan for a bed and breakfast are the same as for any other business. The business must be a for-profit, small business operating in the United States, and the owner must have a good credit history and sufficient collateral. Additionally, the business must meet the SBA's size standards, which vary by industry. You can find more information about size standards here.

    The SBA 7(a) loan can be used for any related needs such as acquiring, refinancing, constructing or renovating, property investment, partner buyout, and even loan consolidation. However, it’s important to realize that SBA 7(a) loans cannot be used for working capital. You may want to consider getting an SBA express loan or SBA microloan instead.

    What are the advantages of using an SBA 7(a) loan for a bed and breakfast?

    The main advantage of using an SBA 7(a) loan for a bed and breakfast is that it can provide working capital. This is not something that an SBA 504 loan can do. An SBA 7(a) loan can also provide up to $5 million in financing for a variety of business needs, including purchasing real estate, constructing or renovating the building, and buying equipment. Additionally, SBA 7(a) loans have flexible terms and competitive interest rates.

    For more information, please visit https://sba7a.loans and /compare-sba-loans.

    What are the disadvantages of using an SBA 7(a) loan for a bed and breakfast?

    The disadvantages of using an SBA 7(a) loan for a bed and breakfast include:

    • Lengthy approval times (for standard SBA 7(a) loans)
    • Lots of documentation
    • Collateral is often required
    • Certain businesses, including real estate investing, lending, gambling, and speculation are prohibited
    • High credit scores are typically required (typically 680+)
    • May be restrictions on supplemental/additional financing

    Source: What are the Pros and Cons of SBA 7(a) Loans?

    What are the maximum loan amounts available for an SBA 7(a) loan for a bed and breakfast?

    The maximum loan amount for an SBA 7(a) loan for a bed and breakfast is $5 million. This loan can be used for real estate and land loans for new construction or for the purchase of existing buildings, with a maturity of no more than 25 years. Equipment and working capital loans have a loan term of 10 years.

    Sources:

    • SBA 504 Loans for Bed and Breakfasts
    • Getting a Business Mortgage for a Hotel

    What are the repayment terms for an SBA 7(a) loan for a bed and breakfast?

    The repayment terms for an SBA 7(a) loan for a bed and breakfast depend on the loan amount and the lender. Generally, the repayment term for an SBA 7(a) loan is up to 10 years for working capital and up to 25 years for real estate and equipment purchases. The SBA 7(a) loan interest rate is typically based on the prime rate plus a margin, and the current interest rate is around 5%.

    For more information, please visit https://sba7a.loans and https://sba504.loans/sba-504-blog/sba-504-loans-for-bed-and-breakfasts.

    In this article:
    1. Case Study: Reimagining a Napa Valley B&B
    2. Other Financing Options
    3. How Do I Find a Lender?
    4. Related Questions
    5. Get Financing
    Tags
    • Property Type
    • Case Study

Getting a small business loan should be easy.⁠ Now it is.

Click below for a free, no obligation quote and to learn more about your loan options.

Get financing →
Janover logo

SBA 7(a) Loans is a Janover company. Please visit some of our family of sites at: Multifamily Loans, Multifamily Today, Commercial Real Estate Loans, SBA7a Loans, CMBS Loans, Apartment Loans, HUD Loans, HUD 221d4 Loan, HUD 232 Loan, HUD 223f Loan, HUD 223a7 Loan, SBA Express Loans, SBA 504 Loans, and OpportunityZones Help.

Janover Inc.

6401 Congress Ave
Ste 250
Boca Raton FL 33487
(561) 559-5551 

hello@sba7a.loans

SBA 7(a) Loans

SBA Loan Comparison
SBA 7(a) Loan Fees, Rates, and Terms
Qualifying for an SBA 7(a) Loan
SBA Loan Guides per State
Commercial Mortgage Rates

Site Information

Privacy Policy
Terms of Use
Advertiser Disclosure

This website is owned by a company that offers business advice, information and other services related to multifamily, commercial real estate, and business financing. We are a technology company that uses software and experience to bring lenders and borrowers together.

All users should perform their own due diligence and research. Nothing on this website is an offer or a solicitation for a loan. This website does not endorse or charge you for any service or product. None of the information on this site constitutes legal advice. We are not affiliated with the Small Business Administration (SBA). If you need to visit the SBA directly please click here: sba.gov

Click here for our Advertiser Disclosure.

This website utilizes artificial intelligence technologies to auto-generate responses, which have limitations in accuracy and appropriateness. Users should not rely upon AI-generated content for definitive advice and instead should confirm facts or consult professionals regarding any personal, legal, financial or other matters. The website owner is not responsible for damages allegedly arising from use of this website's AI.

Copyright © 2023 Janover Inc. All rights reserved.