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:
- Communicate with your stakeholders honestly, politely, directly, frequently and professionally.
- The SBA offers an Economic Injury Disaster Loan (up to $2 million at a 3.25% interest rate).
- Debt referencing is another option: take advantage of a higher loan-to-value ratio and a competitive interest rate.
- Why not a business line of credit, a loan from their retirement account, 2nd mortgage, and others of this type?
- 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.
- 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.
- 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.
- You can also file for a Chapter 11 Reorganization.
- Consider benefiting from the current situation by, e.g., financing new hotel development. The interest rates are low now.
- 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.