SBA 504 loans for Hotels
Over the last decade, hoteliers have used SBA 504 financing to fund more than $18 billion in real estate, construction, and renovations. We help you secure the same financing — with 25-year fixed rates and a team that knows the 504 program inside out.
The Hotel SBA 504 market, by the numbers
What ten years of Hotel SBA 504 loans — pulled directly from the SBA's own data — tell us about how operators finance this business.
Source: SBA 504 loan approvals for NAICS 721110 & 721120 , FY2016–FY2025. Data via FOIA request, updated quarterly.
What an SBA 504 loan covers for a Hotel
SBA 504 financing is built for long-term assets — the real estate, infrastructure, and major equipment that anchor a Hotel business.
Property purchase & land
Buy the hotel — or the land to build one — instead of renting your way into the business. Acquisition is how most hoteliers get in, and 504 lets you take down the real estate with as little as 15% down and a long fixed rate.
- Existing flagged and independent hotels
- Land for a ground-up build
- Portfolio and single-asset acquisitions
- Buying out a partner or ground lease
- Distressed or underperforming properties to reposition
Ground-up construction
Build a new hotel to your flag's prototype. 504 covers the land, the vertical construction, and the site work — the whole project that turns an approved parcel into a hotel taking reservations, without the balloon of a construction-only loan.
- Ground-up builds to brand prototype
- Site work, foundations, and structure
- Guest rooms, lobby, and common areas
- Pools, meeting space, and amenities
- Signage, parking, and landscaping
Expansion & renovations
Flags require property improvement plans, and 504 is built to fund them. Use it to complete a PIP, convert to a new brand, add rooms, or reposition an aging property — without draining the reserves that keep the front desk running.
- Franchise-required PIP renovations
- Brand conversions and reflagging
- Adding rooms or a new wing
- Repositioning independent or aged properties
- Lobby, pool, and amenity upgrades
Furniture, fixtures & equipment
The FF&E that fills every room and lasts long enough to finance. 504 is built for big-ticket furnishings and systems with a long useful life, so you spread the cost over the years they'll actually serve your guests.
- Guest room furniture and casegoods
- Beds, linens, and soft goods
- Kitchen and laundry equipment
- HVAC, elevators, and building systems
- Front-desk, PMS, and IT systems
How SBA 504 financing is structured
Three pieces of capital come together so you only put 10% down on a project that might cost millions.
First lien (50%)
APC funds this directly — we're a private direct lender, not a broker. Term and rate quoted upfront.
SBA 504 / CDC (40%)
Second lien, fixed for 25 years through a Certified Development Company. Rates locked at funding.
Borrower equity (10%)
Cash down, retained equity in existing real estate, or seller carry-back in some cases.
What a 504 project for a Hotel looks like
Three illustrative examples showing typical deal structures, financing splits, and project scopes.
An operator who already ran two properties acquired a third — an established, nationally flagged select-service hotel with steady occupancy. Because it was a cash-flowing business on a special-purpose property, the deal came together at 15% down. The 25-year fixed 504 rate locked the largest cost on the balance sheet against future rate swings.
A first-time hotelier built a new flagged hotel from the ground up near a growing convention corridor. As both a startup and a special-purpose build, it was structured at 20% down — still far below what a construction-only loan would demand. One 504 loan wrapped the land, the vertical construction, and the FF&E at a long fixed rate.
An owner facing a franchise-required property improvement plan used 504 to fund the full renovation and convert to a stronger flag. Rather than draining operating reserves, they financed the guest-room refresh, the lobby, and the systems over 25 years at a fixed rate. The reflag lifted room rates while the payment stayed predictable.
Owning your Hotel property beats leasing — here's the math
Slide the inputs to match your situation. The equity number on the right is what you'd have in 10 years if you owned instead of leased.
Where Hotel SBA 504 money is going
Geography, deal sizes, top CDCs, and the banks making it happen — all pulled from a decade of SBA data.
Top 10 states by loan volume
| State | Loans | Total funded | |
|---|---|---|---|
| 1 | California | 352 | $999M |
| 2 | Florida | 222 | $591M |
| 3 | Texas | 161 | $466M |
| 4 | Georgia | 146 | $377M |
| 5 | New York | 106 | $226M |
| 6 | Minnesota | 101 | $130M |
| 7 | Colorado | 98 | $214M |
| 8 | Wisconsin | 96 | $146M |
| 9 | Illinois | 87 | $182M |
| 10 | Arizona | 85 | $203M |
Deal size distribution
Top CDCs financing Hotels
These Certified Development Companies have funded the most Hotel SBA 504 deals over the past decade. Click any CDC for their full profile.
Top 10 third-party lenders for Hotel deals
| # | Lender | Loans | Volume |
|---|---|---|---|
| 1 | Celtic Bank Corporation | 98 | $571M |
| 2 | Poppy Bank | 96 | $579M |
| 3 | East West Bank | 30 | $127M |
| 4 | First Bank of the Lake | 29 | $123M |
| 5 | Glacier Bank | 26 | $98M |
| 6 | Columbia Bank | 25 | $78M |
| 7 | Bank of Utah | 24 | $96M |
| 8 | Tri Counties Bank | 20 | $123M |
| 9 | Bank of Colorado | 20 | $46M |
| 10 | Bank of Hope | 19 | $114M |
What it takes to qualify
SBA 504 has clear, objective criteria. Most Hotel operators we work with qualify.
Business requirements
- For-profit businessSBA 504 is for operating companies, not investors or holding companies.
- Owner-occupied useYou operate the Hotel — you're not just buying real estate to lease out.
- US-based and below SBA size limitsMost Hotel businesses qualify under SBA's small business size thresholds.
- Demonstrated ability to repayCash flow, credit, and business experience all matter — but no perfect score required.
Project requirements
- 51% owner-occupancyYour business must occupy at least 51% of the financed property.
- Eligible use of fundsReal estate, ground-up construction, major equipment, and certain refinances qualify.
- Long useful lifeEquipment financed under 504 must have a useful life over 10 years.
- 10% equity contributionCash, retained property equity, or seller carry — structured to fit your situation.
Most Hotel operators qualify. The fastest way to know is a 10-minute call. 1-855-504-LOAN
Built for Hotel financing
We're a direct lender that specializes in SBA 504 — not a broker, not a generalist.
Explore SBA 504 loans by industry
A decade of loan data, case studies, and deal structures for each of the property types we finance most.
Ready to finance your Hotel project?
Schedule a 15-minute call. No application fee, no obligation.