Because it is only for the short term, a bridging loan will have a high-interest rate. However, the actual rates will vary between lenders and the property deal being financed. At Rangewell, we can help select the most appropriate lender and negotiate a competitive rate of interest.
Hotel Bridging Loans
Short term finance to get your business back on track. Learn more about bridging finance and bridge loans for hotels from Rangewell.Speak to one of our experts020 4525 5312
- Payments geared to your turnover
- Adverse Credit – no problem
- No Income Proof Required
- Repayment and interest-only available
Finance For Property
- Terms up to 20 years
- £50,000 – No Maximum
- Rates from 2% over base rate
- Up to 80% Loan to Value available
- Answers for all types of challenges
- Solutions tailored to your needs
- Arrangements tailored to your circumstances
- Assets, cashflow, growth capital
Bridging Finance for Hotels
Short term bridge finance for hotel development projects
Table of Contents
Bridging finance is a great resource for hotel businesses that require fast, short-term funding. As the name suggests, bridge loans act as a bridge between two steps in a hotel development process. Typically, bridging finance is used to finance the purchase of land or property. The owner will typically repay or refinance this product as the project goes on, ensuring that the finance they have best reflects their circumstances and plans for the hotel.
So, whether you already own hotels or this is your first hotel purchase then a bridge loan might be just the finance product to help you get that project going. Ready to apply for a bridging loan? Speak to Rangewell today and start your bridge loan application.
How bridging finance works
A bridge loan is a short-term loan secured against property or land. In the hotel sector, this could cover or partially cover the purchase of land or an existing property for hotel development.
This type of finance is typically designed to bridge a short term funding gap, such as the acquisition and start of development of a project. This type of loan is usually repaid quickly and it is not supposed to last the entire duration of the build - instead, it helps you to take the first step in your project.
Commercial bridge loans are very flexible depending on your circumstances. For example, the loan term can be as short as one day and run up to a maximum of 12 months, while loan amounts start from around £25,000. The quick turnaround means that developers can make a quick acquisition when they find the ideal land or property for their project.
Since bridging finance is specific to your circumstances, it's vital that you work with an independent broker like Rangewell on your finance application and ensure you find the right lender for your circumstances.
At Rangewell, we have a team of specialists who will help you with your bridge loan application. From here, we search the whole of market, including a number of specialist hotel finance lenders. We'll support you to find the best finance to match your needs and kickstart your hotel development project.
Why apply for a bridging loan
While we've already discussed one of the chief reasons why a hotel owner would apply for a bridging loan, let's take a closer look at how a bridge loan can help. Here are some of the types of hotel projects that may benefit from bridge loans:
First-time property or land acquisition - Typically, developers will invest a portion of their profits from previous projects into the property or land purchase of the next one. However, if this is your first project then you may not have this luxury. So, a bridging loan can help 'bridge' the gap to ensure your land acquisition goes smoothly and you can start your project in a strong financial position.
Hotel refurbishment - In some cases, you may require urgent funds to carry out redevelopment or refurbishment of your hotel. A bridging loan may be the right option for you, as the funds are typically released quickly. However, there are other kinds of hotel finance that also suit this purpose, so make sure to speak to Rangewell before signing the dotted line.
Auction purchase - If you are planning to purchase land or commercial property at auction then you will need proof of funds in order to complete the sale. This is where a bridging loan can help.
Any short term loan requirements - A bridging loan help support temporary cash flow problems in hotel businesses. To find out if this is the right solution for you and whether you qualify for bridge loans or short term loans in general, get in touch with Rangewell today.
Types of hotel bridging loans
While we recommend speaking to Rangewell's expert team to determine which type of loan is right for you, here are some of the most common types of bridge loans for hotels:
Closed bridge loans
As the name suggests, a closed bridge loan is only available for a fixed period of time. This type of funding is very common and can often be provided with a quick turnaround, depending on your circumstances.
Open bridge loans
Unlike closed bridge loans, open bridge loans have no set repayment date and, therefore, this might be right for you if you don't know when you will be able to pay off the loan. The increased flexibility typically means that interest rates will be higher as the lender requires additional security to ensure they will receive their repayments.
First and second charge bridging loans
A typical bridging loan is secured as first or second chargers, either on the property in question or against another you already own.
A first charge bridging loan is when an asset that is being used as collateral has no other encumbrance. For example, it may be owned by the borrower as the mortgage has been fully paid off. Whereas a second charge bridging loan is for developers requiring finance who already have a mortgage on a property used as collateral.
Debt bridging finance
For a hotel development, you may be applying for a large finance product that takes a while to approve and secure. Debt bridging finance is short-term funding that can help cover costs while you wait for the main finance product.
These are just some of the most common bridging loans available to hotel developers. To find out whether any of these are suitable for your project, or apply for another type of commercial loan, get in touch with Rangewell's team of expert advisors today.
Bridge loans for hotels from Rangewell
Hotel development can be a long and drawn-out process, so make sure you have a finance broker who can support you throughout. If you require a short term commercial loan for your hotel business, then a bridge loan might be the right solution for you.
With many different types of hotel loans on offer, including several variations of bridging finance, it's important to work with a knowledgeable team to ensure you are getting the best possible terms and products for your circumstances.
Get in touch with Rangewell today and start your hotel bridge loan application. We'll scour the whole of market, including a number of specialist lenders who already work with hotel owners like you to support their development and ongoing operational costs.
Ready to find out more and kick off your hotel loan application? Contact Rangewell's team of expert finance advisors today.
Last update: 17 May 2022
Frequently asked questions
Have a question?
A bridging loan is a large-scale, short-term loan designed to provide funding for a short period while a longer-term solution can be arranged. It is a form of secured loan, with the security provided by the property being financed, which means the property may be at risk if you do not repay.
Bridging loans are suited to property developers, landlords and even house hunters who need funds quickly or on a flexible basis. They can also be used for land purchases and land development.
Generally speaking, they aren't any more difficult to obtain that funding against a property, although each application will be assessed on its own merit. However, land without planning permission is more complex than sites with planning permissions due to the planning risk.
Depending on your unique situation and other lending criteria, a bridging loan can take anything from 72 hours to a few weeks to complete. So it's not the quickest type of finance due to the complexity, but lenders who have experience in this field can be agile in getting the information they need.
Download Rangewell’s free and detailed guide to Finance for Hotels and Motels
What types of finance are there and which are the most appropriate for the hotel sector?
Find out why not all providers are equal and why it will save you money by finding the one that’s right for you
The downsides to certain finance solutions for the hotel sector and how you can avoid them
How to arrange the finance your hotel business requires, including support on what paperwork you need
Key finance terms explained so you can make the most appropriate choice for your hotel
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