Hotels and Restaurant Business

Financing in the hotel and restaurant industry can give you serious headaches. Indeed, few bankers are inclined to offer financing in this area and the expertise of a commercial mortgage broker becomes most relevant. Several important elements are to be considered, including:

  • Your experience in the field
  • The location of your business
  • The clientele you are targeting
  • Immediate competition
  • The originality of your project
  • A recognized or independent banner
  • Your financial capacity to inject into the project and financially support unforeseen events
  • The number of profitable years of existence of your business
  • For the hotel sector, the average rental rate
  • Offered Guarantees

Equipment Financing and Leasehold Improvements

The funding percentage could vary by financial institution and range between 65% and 90% of the lesser of cost or market value.

Amortization will be based on the useful life of the investments, not to exceed 10 years.

Regarding the interest rate, you can choose a term varying between 1 and 10 years. The rate for this type of financing is not displayed by most banks. The interest rate will be defined according to the risks incurred by the financial institution according to the information provided. It will be fixed or variable.

The bank will also impose administration fees and possibly annual review fees.

Property Finance

The funding percentage could vary by financial institution and range between 65% and 90% of the lesser of cost or market value.

Amortization should reach a maximum of 20 years, but it’s possible to obtain 25 years in some cases.

As for the interest rate, you can choose a term varying between 1 and 10 years. The rate for this type of financing is not displayed by most banks. The interest rate will be defined according to the risks incurred by the financial institution according to the information provided. It will be fixed or variable.

The bank will also impose administration fees and possibly annual review fees.

Recognized Banners

If you start or refinance a business under the name of a recognized banner, you will be welcomed more easily by many bankers. However, franchises are often more expensive and will most likely require a larger down payment.

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Your mortgage broker

Your mortgage broker will be your ally in order to obtain:

  • The highest percentage of financing to reduce your down payment
  • The longest amortization to reduce the impact on your cash-flow
  • The lowest possible application fees
  • Negotiating the best financing conditions on the market