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10 Strategic Hotel Financing Options During COVID-19

The hotel industry among others has felt the greatest negative impact of the COVID-19 crisis. Unfortunately, the economic uncertainties are still ahead. If you need financing for your hotel business, this article will help you with some hotel financing options during COVID-19.

Hotel Financing Options During COVID-19

The decision to close hotels and several other businesses has brought a disruptive effect of the travel ecosystem. So, the tourism industry worldwide has been hurt a lot.

The Federal Reserve has recently lowered the interest rates to a significant extent, and the prime rate was 3.25% as of March 20, 2020. This and other developments in the global economy have created tough times for consumers and businesses worldwide.

Here’re strategic funding options and recommendations for hotel merchants:

  1. Communicate with your stakeholders honestly, politely, directly, frequently and professionally.
  2. The SBA offers an Economic Injury Disaster Loan (up to $2 million at a 3.25% interest rate).
  3. Debt referencing is another option: take advantage of a higher loan-to-value ratio and a competitive interest rate.
  4. Why not a business line of credit, a loan from their retirement account, 2nd mortgage, and others of this type?
  5. Turn to a reputable alternative online lender like FirstAmericanMerchant.com. A trustworthy business funding provider like FAM will fast and easily approve you for funds, including hotel financing options during COVID-19. FirstAmericanMerchant.com is an award-winning high risk lender and processor that carries an A+ rating with the BBB.
  6. Look for new partners. Consider turning to your family, friends, relatives, and others you know from hotel associations, and from other organizations or companies that can be helpful.
  7. Another way out is to sell your hotel. As a result, all the cash equity will get freed up from the asset you can use the way you wish.
  8. You can also file for a Chapter 11 Reorganization.
  9. Consider benefiting from the current situation by, e.g., financing new hotel development. The interest rates are low now.
  10. Plan and forecast for the upcoming 6 months.

The hospitality industry is among the most damaged sectors by the coronavirus. Take strategic steps to keep your hotel business afloat.

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