💰 How SBA Loans Help Investors Buy or Refinance STR Hotels & Motels 🏩

🏨 SBA Financing for STR Hotels & Motels: The Smart Way to Scale Your Hospitality Portfolio 💼

October 06, 2025•3 min read

🏨 SBA Financing for STR Hotels & Motels: The Smart Way to Scale Your Hospitality Portfolio 💼

💰 How SBA Loans Help Investors Buy or Refinance STR Hotels & Motels 🏩

SBA Financing for STR Hotels and Motels: The Smart Way to Scale Your Hospitality Portfolio

Short-term rentals (STRs), boutique hotels, and roadside motels are seeing renewed investor interest across the U.S. — especially in fast-growing regions like Texas, Florida, and Arizona. With more travelers opting for local experiences over big-brand stays, small-scale hospitality operators are turning to SBA financing to fund purchases, renovations, and conversions.

At Medallion Funds, we help borrowers navigate the SBA 7(a) and SBA 504 loan programs — both powerful tools for financing owner-operated hospitality properties.

Why SBA Financing Works for Hotels and Motels

Unlike traditional bank loans, SBA loans are partially guaranteed by the federal government, allowing lenders to offer:

·Lower down payments (as low as 10%)

·Longer amortization (up to 25 years)

·Competitive fixed or variable rates

·Flexible qualification standards

These advantages make SBA loans ideal for operators who manage or live on-site at smaller independent hotels, motels, or STR properties.

SBA 7(a) vs. SBA 504: Which One Fits Your Property?

SBA 7(a) Loan

·Great for property acquisitions, renovations, or business purchases

·Up to $5 million in financing

·Includes working capital and FF&E (furniture, fixtures, and equipment)

·Allows for mixed-use operations (like a motel with short-term rental units)

SBA 504 Loan

·Designed for real estate and equipment purchases

·Typically used for expansion or construction

·Up to $15 million with combined lender and CDC participation

·Fixed-rate, long-term financing with lower equity requirements

👉 Pro tip: Many investors use the 504 program for real estate and the 7(a) for business assets — a blended strategy that maximizes leverage and minimizes equity outlay.

What Properties Qualify for SBA Hotel Financing?

To qualify, the property must be owner-occupied (at least 51%) and actively managed. Eligible property types include:

·Boutique hotels and independent motels

·Short-term rental (STR) portfolios

·Bed-and-breakfasts

·Vacation lodges and cabins

·Small hospitality franchises

Hotels and motels with on-site operations — even with STR units — can meet SBA’s “owner-operator” rule if management is hands-on or through a closely held company.

Key Benefits for Investors and Operators

✅ Low down payment = higher leverage
✅ Long repayment terms = better cash flow
✅ Business expansion = new market entry or renovation funding
✅ Tax advantages through depreciation and expense write-offs
✅ Eligibility for fee waivers for certain NAICS hospitality codes (subject to SBA updates)

Example Scenario

A husband-and-wife team operates a 20-unit roadside motel in Central Texas and wants to convert half the rooms into short-term rental suites. Using the SBA 7(a) program, they secure 90% financing, including funds for renovations and furnishings — boosting nightly rates and overall property value within one year.

Partner with Medallion Funds

At Medallion Funds, we specialize in SBA hospitality financing for:

·STR property conversions

·Boutique hotel acquisitions

·Motel renovations and refis

·New hospitality construction loans

Whether you’re a first-time operator or an experienced investor, we guide you through underwriting, business plan preparation, and lender matching — saving you time and money.

📞 Schedule a consultation today at BillRappOnline.com to learn how SBA financing can power your next hospitality investment.

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Bill Rapp - Commercial & Residential Mortgage Broker

Whether you're a first-time homebuyer, a seasoned investor, or a business owner with ambitious plans, securing the right financing is crucial. At Medallion Funds, we take the guesswork out of mortgages, offering a comprehensive suite of residential and commercial loan options to fit your unique needs. Looking for Your Dream Home? We understand the excitement and challenges of navigating the residential real estate market. Our experienced mortgage brokers will guide you through every step, from pre-qualification to closing. We offer a variety of loan programs to suit your financial situation, including: • Fixed-rate mortgages: Offering stability with predictable monthly payments. • Adjustable-rate mortgages (ARMs): Providing competitive rates for a set period. • FHA loans: Making homeownership accessible with lower down payments. • VA loans: Rewarding veterans with attractive rates and flexible terms. Investing in Your Business Future? Growth often requires capital, and we can help you unlock the potential of your commercial property. Our brokers specialize in a wide range of commercial loan options, including: • Purchase loans: Financing the acquisition of new buildings or land. • Construction loans: Facilitating the development of your project. • Refinance loans: Restructuring your existing mortgage for better terms. • SBA loans: Providing access to government-backed financing for qualified businesses. The Medallion Funds Difference: We go beyond simply finding a loan. We take the time to understand your goals and develop a personalized strategy. Here's what sets us apart: • Expertise: Our brokers have a deep understanding of both residential and commercial lending. • Competitive Rates: We leverage our strong lender relationships to secure the best possible terms. • Streamlined Process: We handle the paperwork, keeping you informed every step of the way. • Exceptional Service: We're committed to providing you with a positive and stress-free experience. Ready to Take the First Step? Contact Medallion Funds today for a free consultation. Let's discuss your financing needs and help you achieve your dreams!

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