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Using the SBA 7(a) for a Motel
When you’re looking for an SBA lender, it’s important to find one who specializes in motels. Motels have unique underwriting procedures, as they're often seen as high-risk. Ensure you’re getting the best possible terms from your SBA lender.
When you’re looking for an SBA lender, it’s important to find one who specializes in motels. Motels have unique underwriting procedures, different from hotels and other businesses in hospitality. Because motel businesses are often seen as high-risk, you’ll want to make sure you’re getting the best possible loan terms from your SBA lender.
That’s where SBA 7(a) Loans comes in. We have over 20 years of experience in capital markets, and we have strong relationships with lenders in the motel industry.
How Motels Can Use an SBA 7(a) Loan
SBA 7(a) loans can be deployed in a variety of ways with motel properties. Consider the following uses.
Refinancing a Business Mortgage
If your current terms are less than ideal, an SBA 7(a) loan can help you refinance. Read this article to learn more.
Opening a New Location
Growing businesses can benefit greatly from the value of an SBA 7(a) loan.
New Construction of a Motel
We’ll help you get the financing you need to build your new motel site from the ground up.
Also Check Out: Using the SBA 7(a) for a Hotel
An SBA loan can also help you with other expenses, like working capital, equipment, and repairs at your current location.
Case Study: Renovating a Motel in Nebraska
Brandon, a motel owner in Kearney, Nebraska, recognized the opportunity to capitalize on the heavy traffic flow along Interstate 80. With a high number of truck drivers and travelers passing through the area, he realized that renovating his motel could significantly boost its appeal and profitability.
In order to secure the necessary funds for renovations, Brandon applied for an SBA 7(a) loan. He requested a loan amount of $600,000, which would cover the costs of upgrading guest rooms, improving the exterior appearance of the motel, and adding amenities to attract more customers.
Upon approval of his SBA 7(a) loan application, Brandon began the renovation process, transforming his motel into a more comfortable and attractive lodging option for travelers along Interstate 80. The investment in renovations led to an increase in occupancy rates and overall customer satisfaction, resulting in higher revenue and a more successful business.
This is a fictional case study provided for illustrative purposes.
Get the Best Financing Option For Your Business
Beyond the SBA 7(a), there are other loan products we can recommend to help you meet your goals. Don’t wait to take the next step for your business. See how an SBA loan can help your business thrive.
To learn more about the SBA 7(a) loan program or to apply for a free quote, simply enter your details into the form below.
Related Questions
What are the requirements for a motel to qualify for an SBA 7(a) loan?
To qualify for an SBA 7(a) loan, a motel must meet certain standards. These include:
- Good bookkeeping
- Understanding of creditworthiness
- Solid business plan
- Meeting the eligibility and qualifications for the SBA 7(a) loan
What are the advantages of using an SBA 7(a) loan for a motel?
The SBA 7(a) loan is a great option for motels because it offers a number of advantages. These include:
- Low down payment requirements
- Long repayment terms
- Flexible interest rates
- No collateral required
- No prepayment penalty
For more information on the SBA 7(a) loan for motels, please see this article.
What are the eligibility criteria for a motel to receive an SBA 7(a) loan?
To qualify for an SBA 7(a) loan, a motel must meet certain standards. These include:
- Good bookkeeping
- Understanding of creditworthiness
- Solid business plan
In addition, the motel must be an eligible business opportunity according to the SBA 7(a) guidelines. Hotels, motels, and B&Bs are all eligible for SBA 7(a) loans.
For more information, please see Eligibility and Qualifications for the SBA 7(a) Loan and Eligible and Ineligible Industries for SBA 7(a) Loans.
What documents are required to apply for an SBA 7(a) loan for a motel?
To apply for an SBA 7(a) loan for a motel, you will need to provide the following documents:
- Business plan
- Financial statements
- Personal financial statements
- Tax returns
- Business and personal credit reports
- Collateral documents
- Lease agreements
- Business licenses
You can find more information about the eligibility and qualifications for the SBA 7(a) loan here.
What is the maximum loan amount for an SBA 7(a) loan for a motel?
The maximum loan amount for an SBA 7(a) loan for a motel is $5 million. The SBA guarantees up to 85% of the loan, based on the loan amount.
Real estate and land loans for new construction or for the purchase of existing buildings have a maturity of no more than 25 years. Equipment and working capital loans have a loan term of 10 years.
Helpful Resource: Using the SBA 7(a) Loan for Land or Real Estate