SBA 504 Loans for Bed and Breakfasts

Building Successful Bed and Breakfasts with SBA 504 Loans

While hotels, motels, and even resorts offer the chance to enjoy comfortable accommodations, bed and breakfasts fill a unique niche. The demand for these businesses is borne out by the fact that this segment has grown at a fast clip of 5.4% a year since 2013, and is expected to generate a record $3 billion in 2018. And, if you want to expand your current bed and breakfast, or even open another location, an SBA 504 loan could be a great way to get the financing you need.

The Uses and Restrictions of SBA 504 Loans for Bed and Breakfasts

An SBA 504 loan can offer up to $5 million for the specific purposes of purchasing real estate, constructing or renovating the building, and buying equipment. For bed and breakfasts, facility design and construction can be quite costly, and equipment needed to operate the business can also be expensive. An SBA 504 loan puts all those costs into a single payment with a flexible term that can be extended up to 25 years. Plus, 504 loan rates are some of the lowest on the market, with current interest rates hovering around 5%.

However, it’s important to realize that SBA 504 loans cannot be used for working capital. So, if that’s what your business needs, you may want to consider getting an SBA 7(a) loan instead. Other SBA loan options that can provide working capital for bed and breakfast owners include SBA express loans and SBA microloans.


We’re here to help you get the commercial financing you need. Simply fill out the form below for a risk-free consultation and a free SBA loan quote!