SBA 504 Loans for Bed and Breakfasts
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
Better Financing Starts with More Options$1.2M offered by a Bank at 6.0%$2M offered by an Agency at 5.6%$1M offered by a Credit Union at 5.1%Click Here to Get QuotesBuilding 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!
Related Questions
What are the eligibility requirements for an SBA 504 loan for a bed and breakfast?
In order to be eligible for an SBA 504 loan for a bed and breakfast, you must meet the following requirements:
- You must be a for-profit business
- You must have a tangible net worth of less than $15 million
- You must have an average net income of less than $5 million over the past two years
- You must use the loan for the purchase of real estate, construction or renovation of a building, or the purchase of equipment
For more information, please visit SBA 504 Loans for Bed and Breakfasts.
What are the benefits of an SBA 504 loan for a bed and breakfast?
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%.
What are the terms of an SBA 504 loan for a bed and breakfast?
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. The loan term can be extended up to 25 years, and the current interest rates are around 5%. However, it’s important to note that SBA 504 loans cannot be used for working capital. For that, you may want to consider an SBA 7(a) loan, SBA express loan, or SBA microloan.
SourceWhat documents are required to apply for an SBA 504 loan for a bed and breakfast?
To apply for an SBA 504 loan for a bed and breakfast, you will need to provide the following documents:
- Business plan
- Personal financial statement
- Business financial statement
- Business tax returns
- Personal tax returns
- Business licenses and permits
- Lease or purchase agreement
- Appraisal report
- Environmental report
- Survey
- Architectural drawings
- Construction contract
- Equipment list
For more information, please visit SBA 504 Loans for Bed and Breakfasts.
What is the maximum loan amount for an SBA 504 loan for a bed and breakfast?
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 more information, please visit SBA 504 Loans for Bed and Breakfasts.