$2M to $500M+ hotel loans for flagged and independent properties. Non-recourse CMBS from 5.63%, SBA 504 with 15% down, bridge capital for repositioning, and construction financing for ground-up development. PeerSense structures the deal across 500+ capital sources.
Stabilized hotels at 65% LTV or lower qualify for CMBS non-recourse fixed-rate financing starting at approximately 6.25% for 10-year terms. Post-PIP flagged properties with 1.40x+ DSCR and experienced sponsors are fast-tracked through express conduit underwriting. PeerSense matches hotel deals to the active conduit most likely to close — across 500+ capital sources.
Written by Ed Freeman, Capital Advisory — PeerSense. Updated March 2026.
Hotel financing spans five distinct capital sources, each with fundamentally different terms. The right program depends on your property's stabilization, your equity position, your hold period, and whether the hotel carries a national flag.
| Feature | CMBS / Conduit | Conventional Bank | SBA 504 | Bridge | Construction |
|---|---|---|---|---|---|
| Rate Range | 5.63%–7.56% | 4.99%–8.75% | 5.61%–5.79% | 8%–15% | 9%–14% |
| LTV | 55%–75% | 60%–80% | Up to 85–90% | 65%–80% | 60%–75% LTC |
| Min DSCR | 1.40–1.50x | 1.45x+ | 1.15–1.25x | 1.0–1.10x | N/A (pre-stabilized) |
| Term | 5–10 years fixed | 3–15 years | Up to 25 years | 12–36 months | 18–36 months |
| Recourse | Non-recourse | Full recourse | Partial recourse | Often recourse | Full recourse |
| Min Loan | $3M | $1M | $500K | $1M | $5M |
| Best For | Stabilized flagged hotels | Relationship borrowers | Owner-occupied, <$20M net worth | Acquisitions, repositioning | Ground-up, PIP renovations |
Rates as of March 2026. Sources: Commercial Loan Direct, Select Commercial, CREFCOA, SBA.gov. Actual rates depend on property, borrower, and market conditions.
In hotel financing, LTV is not a fixed number — it is a reflection of the lender's confidence in the income stream. The same physical building can qualify for 50% LTV or 85% LTV depending on who operates it, how long the management agreement runs, and whether the operator carries national brand recognition. That LTV difference alone can move your rate by 2% or more.
Lenders view flagged hotels — properties operating under a national brand like Marriott, Hilton, IHG, Hyatt, or Wyndham — as fundamentally lower risk than independent properties. The flag provides a centralized reservation system, brand recognition that drives occupancy, standardized operating procedures, and a management infrastructure that survives individual ownership changes. When a lender underwrites a Courtyard by Marriott, they are underwriting the Marriott system as much as the individual property.
This perceived stability translates directly to LTV. A stabilized Marriott-flagged select-service hotel with a 20-year management agreement can qualify for 70–75% LTV from CMBS conduits and up to 80% from conventional banks. The same building as an independent boutique hotel with a 5-year management contract from a local operator might cap at 55–65% LTV from the same lenders. That 10–15% LTV gap means the flagged hotel borrower needs $1M to $1.5M less equity on a $10M property.
In credit tenant lease (CTL) structures — where the property is leased to an investment-grade operator on a long-term basis — LTVs can reach 85%, 90%, or even 100% with rates as low as 5.83%. This is because the lender is effectively underwriting the operator's corporate balance sheet rather than the hotel's operating performance. A 20-year net lease to Marriott International is closer to a corporate bond than a hotel loan.
The inverse is equally powerful. A hotel with a 3-year management agreement from an unrated local operator introduces massive refinancing risk — if the operator leaves, revenue could drop 30–40% before a replacement is found. Lenders price this uncertainty through lower LTVs (more equity required) and higher rates. The lease term effectively defines the length of the guaranteed cash flow, and that duration is what lenders are really pricing.
This is why a 2% rate difference between two hotel loans is not contradictory — it is logical when you understand that the lower-rate loan comes with 5–10% higher LTV because the tenant credit and lease term reduce risk enough to justify the additional leverage. A Hilton-flagged hotel at 75% LTV and 6.5% can be lower risk than an independent hotel at 60% LTV and 8.5% because the Hilton income stream is more predictable.
Higher LTV does not always mean higher rates in hotel financing. When the additional leverage is supported by stronger lease terms, creditworthy operators, and national brand recognition, lenders will extend more capital at lower rates because the risk-adjusted return is actually better. A $10M hotel with a 20-year Marriott management agreement at 80% LTV and 6.2% can be priced below the same $10M hotel with an independent operator at 60% LTV and 8.5% — because the Marriott income stream is worth more to bondholders.
Beyond flag status and lease duration, hotel underwriting incorporates variables that don't apply to other commercial property types. Hotels are operating businesses — not passive income properties — and lenders evaluate them accordingly.
Lenders analyze trailing 12-month RevPAR against STR competitive set data. A hotel outperforming its comp set gets better terms. In 2026, STR projects 4–5% RevPAR growth nationally, with gateway markets outpacing secondary markets.
National flags (Marriott, Hilton, IHG, Hyatt) receive the best terms. Regional flags and soft brands fall in the middle. Independent hotels without a recognized management company receive the most conservative underwriting.
Hotels require furniture, fixtures, and equipment reserves — typically 4–5% of gross revenue annually. Lenders impound FF&E reserves and may require PIP (Property Improvement Plan) compliance for flagged hotels before funding.
Gateway cities (NYC, Miami, LA) with diversified demand generators receive better terms than tertiary markets dependent on single industries. Lenders evaluate the mix of leisure, corporate, and group demand — diversified demand = lower risk.
The single most impactful variable after property performance. A management agreement expiring during the loan term introduces refinancing risk that lenders price through lower LTV and higher rates.
Hotel-specific experience matters more than general CRE experience. Conduits want sponsors who have owned and operated the same hotel category (select-service, full-service, resort). Net worth of 25%+ of loan amount and 5% post-closing liquidity.
Many hotel owners financed or refinanced during the 2022–2024 rate environment when SBA variable rates and bank loans were pricing at prime + 2% to prime + 3% — effective rates of 9.5% to 11.5% at peak prime. Those borrowers are now paying significantly more than today's CMBS conduit rates of 5.63–7.56% on stabilized flagged hotels.
If your hotel has appreciated, maintained strong occupancy, and you currently sit at 65% LTV or lower based on current appraised value, you may be in a position to refinance from a variable-rate SBA or bank loan into a fixed-rate CMBS conduit execution — potentially dropping your rate by 2–4 percentage points. On a $10M loan, moving from 10% to 6.5% saves $350,000 per year in debt service. Over a 10-year CMBS term, that is $3.5 million in savings.
Even borrowers who originally put 20–25% down may now have enough equity through appreciation and principal paydown to qualify for conduit LTV thresholds. The key question is whether your current property performance — trailing 12-month NOI, occupancy, RevPAR relative to comp set — meets CMBS underwriting standards (typically 1.40x+ DSCR and 7.5%+ debt yield).
For SBA hotel borrowers specifically, the transition from a variable-rate 7(a) loan to a fixed-rate CMBS conduit loan eliminates interest rate risk entirely. You lock in a 5–10 year fixed rate at today's conduit spreads instead of floating with prime. The tradeoff is that CMBS loans carry prepayment provisions (defeasance or yield maintenance), but for borrowers planning to hold 5+ years, the rate certainty is worth the reduced flexibility.
PeerSense can evaluate your current hotel loan, run the numbers on a CMBS refinance, and tell you within one conversation whether the savings justify the transition. No cost, no obligation.
The hotel CMBS market is entering a period of significant refinancing activity. According to Trepp, approximately $18.7 billion in hotel CMBS loans mature in 2026. Nearly 70% of these loans carry floating-rate debt originated during the low-rate environment of 2020–2022, and $5.71 billion in fixed-rate hotel CMBS have coupons below 6% — meaning borrowers will face materially higher rates at refinancing.
Hotel CMBS delinquency rates reflected this stress: the lodging delinquency rate climbed to 5.94% in February 2026, up 38 basis points from January, though still below the 6.43% rate from one year earlier. The hotels facing the greatest pressure are those with floating-rate CMBS that have exhausted extension options and now must refinance into a 6–8% fixed-rate environment or sell.
For well-capitalized buyers and owners with strong equity positions, this maturity wall creates opportunity. Distressed hotel CMBS is creating a buying environment where quality flagged hotels are trading at 8.0–8.5% cap rates — up from 6.5–7.5% cap rates in 2021–2022. Borrowers who can bring 30–40% equity, demonstrate hotel-specific operating experience, and commit to a 5–10 year hold can acquire or refinance at historically attractive basis points.
CBRE projects hotel cap rates to compress by 5–15 basis points through 2026 as new supply diminishes and RevPAR improves, with luxury and upper-upscale segments leading the recovery. STR forecasts 4–5% national RevPAR growth in 2026, supported by strong leisure demand and the return of group and corporate travel.
For owner-occupied hotels where the borrower meets SBA size standards (tangible net worth under $20 million, average net income under $6.5 million), the SBA 504 program offers the most favorable terms available in hotel financing. The structure is 50% from a conventional first-lien lender, 35% from a Certified Development Company (CDC) at a below-market fixed rate, and 15% borrower equity (20% for businesses less than 2 years old).
Hotels are classified as special-purpose properties under SBA guidelines, which means the standard 10% down payment for general commercial real estate does not apply — hotel borrowers need 15% minimum. Even so, 85% financing at SBA rates (currently 5.61–5.79%) with up to 25-year terms is the lowest-cost hotel capital available for qualifying borrowers. The DSCR requirement is also more flexible than conventional hotel loans — typically 1.15–1.25x versus the 1.40–1.50x required by CMBS conduits.
The SBA 504 is particularly powerful for hotel acquisitions in the $1M–$15M range where the borrower will actively operate the property. It is not available for pure investors or for hotels where the borrower has no operational role.
Bridge loans serve hotel transactions where the property is not yet stabilized — acquisitions of underperforming hotels, brand conversions (reflagging), PIP-driven renovations, and properties in lease-up. Bridge rates for hotels currently range from 8% to 15% depending on the deal, with most lenders targeting 9%+ going-in debt yield and 70% leverage from debt funds.
In 2026, bridge lenders are particularly focused on luxury flags in established markets. New York, South Florida, and the Carolinas are seeing the most bridge activity. The key to a successful hotel bridge execution is having the permanent takeout lined up — PeerSense structures hotel bridge loans with the CMBS or conventional refinance already mapped, so the borrower has a clear path from acquisition through stabilization through permanent financing.
Hotel construction financing is the most capital-intensive and highest-risk hotel lending category. Ground-up hotel development loans typically require 25–40% equity (60–75% loan-to-cost), full recourse, and completion guarantees. Interest rates range from 9–14%, and terms are typically 18–36 months with extensions available. Lenders require a signed franchise agreement (for flagged hotels), a feasibility study, detailed construction budgets, and a stabilization timeline before funding.
PIP (Property Improvement Plan) renovation financing falls between bridge and construction. When a hotel requires a brand-mandated renovation to maintain its flag, the capital can often be structured as a supplemental loan or folded into a bridge-to-perm refinance. The flag's requirement itself actually makes the deal more financeable — it signals ongoing brand commitment.
PeerSense is a capital advisory firm — not a lender. We structure hotel financing across 500+ capital sources and submit each qualifying deal to CMBS conduits, balance sheet banks, life companies, SBA preferred lenders, and bridge funds simultaneously. The result: you see the full market, not one lender's answer.
Every hotel deal is submitted to multiple capital sources. We routinely see 5–9 percentage point rate spreads on identical properties — the right structure and presentation determines which tier you access.
We structure hotel bridge loans with the permanent takeout already mapped. The bridge terms align with conduit requirements so the transition is seamless when the property stabilizes.
Our compensation is established upfront in a written agreement and paid at closing. No retainers, no consulting fees. The initial consultation and deal assessment are complimentary.
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PeerSense structures hotel financing from $2M to $500M+. CMBS, SBA 504, bridge, and construction — we find the right capital for your deal.
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