Hotel finance guides
Plain-English answers on buying, valuation, EBITDARM, rates, brand and franchise terms and what lenders look for, from a specialist arranger.
Straight answers to the questions operators and buyers ask before they fund a hotel. Written by Matt Lenzie, who has arranged more than £500 million of property and trading-business finance over 25 years. This is finance for the hotel as a trading business.
What is hotel finance
Hotel finance funds the purchase, building, conversion or refinancing of a hotel as a trading business. This guide explains what it is, how lenders size it and the main products we arrange.
Read the guide → BorrowingHow much can you borrow for a hotel
How much you can borrow for a hotel is driven by the hotel's trading profit and value, not by a personal salary multiple. This guide shows the LTV bands, the deposit and how lenders test affordability.
Read the guide → ValuationHotel valuation and EBITDARM
A hotel is valued as a trading business, not just a building. Understanding EBITDARM, the multiple and the going-concern basis helps you price a deal and judge how much a lender will advance.
Read the guide → CostsHotel finance rates and costs
Hotel finance rates depend on the product, the lender and how the hotel trades. This guide sets out indicative pricing for each product and the fees to budget alongside the headline rate.
Read the guide → BorrowingHotel mortgage deposit
A hotel mortgage usually needs a deposit of around 30 to 35% of value. This guide explains why, what counts as a valid deposit, and the ways experienced operators reduce the equity they put in.
Read the guide → TradingWhat is RevPAR
RevPAR is the single most watched performance number in the hotel sector. This guide gives the formula, a worked example, how it differs from ADR and GOPPAR, and why lenders care about it.
Read the guide → SectorBranded versus independent hotel finance
Whether a hotel flies a brand flag or trades independently changes how lenders see it. This guide compares branded and independent hotel finance, from LTV and rates to valuation and risk.
Read the guide → BuyingHow to buy a hotel in the UK
Buying a hotel in the UK means buying a trading business as well as a property. This guide walks through the process from search to completion, what it costs and how the finance is arranged.
Read the guide → DevelopmentHotel conversion and development finance
Building a new hotel or converting an office or other building into one is funded with development and conversion finance. This guide covers the terms, planning, costs and how the loan draws and exits.
Read the guide → ReferenceHotel finance glossary
Hotel finance comes with its own vocabulary, blending property lending terms with hotel performance metrics. This glossary explains the key terms in plain English, with a few short sections on how they fit together.
Read the guide →Got a hotel in mind?
Send us the hotel and the operator and we will come back with a view on fundability and likely terms within one working day.