Owner-operated hotels qualify for SBA 504 financing at up to 85% LTV with fixed rates typically in the 6.5%–7.5% range for 25-year terms. The borrower must occupy and manage the hotel as their primary business. SBA 504 provides the highest leverage and longest fixed-rate terms available for hospitality acquisitions, requiring only 15% borrower equity.
Written by Ed Freeman, Capital Advisory — PeerSense
Owner-operated hotels qualify for SBA 504 financing at up to 85% LTV with 25-year fixed rates typically 6.5%–7.5% (SBA 504). Ideal for hands-on hospitality operators purchasing their first or next property.
Minimum 15% equity required. Hands-on hotel operators acquiring a property they will personally manage.
LTV Target
85%
Est. Rate Range
6.5% – 7.5% (SBA 504 fixed)
Term
25 years fixed
Recourse
Full recourse (personal guarantee)
DSCR
1.20x minimum
Closing Speed
60-90 days
Min Loan Size
$500K
Loan Products
SBA 504
SBA 504 is the right choice when you are purchasing a hotel you will personally operate and manage. The 85% LTV allows you to acquire with minimal equity, and the 25-year fixed rate provides payment certainty that is unavailable in conventional hotel lending. This is particularly powerful for first-time hotel buyers who want to preserve cash for renovations or working capital. If you are a passive investor or plan to hire a third-party management company, you will not meet the SBA owner-occupancy requirement and should consider CMBS or conventional financing instead.
If you are an investor (not owner-operator) seeking non-recourse terms
Learn moreIf the hotel needs renovation before stabilization
Learn moreIf you are purchasing a branded franchise hotel (e.g., Hampton Inn)
Learn morePeerSense pre-underwrites every deal before presenting it to our institutional capital sources. With 500+ lender relationships and live market rate intelligence, we match your hotel deal with the right capital source — right now.
No upfront retainer · Fee at closing only · Complimentary initial consultation
Written by Ed Freeman, Capital Advisory — PeerSense. Updated March 2026.
Disclaimer: The information on this page is provided for educational purposes only and does not constitute financial, legal, or investment advice. Rates, terms, and availability are subject to change based on market conditions, property characteristics, and borrower qualifications. The rate ranges cited reflect approximate market pricing as of March 2026 and may not reflect current conditions at the time of reading. PeerSense is a capital advisory firm, not a lender. We do not originate, fund, or service loans. All financing is provided by third-party lenders subject to their own underwriting criteria and approval processes. Borrowers should consult with qualified financial and legal professionals before making any financing decisions.