Owning and operating a motel business is no easy task whether you have one location or are in charge of a franchise. Keeping up with trends and the constant competition among other motel and hotel chains can be quite difficult at times, and some additional working capital may be needed to keep up. When it comes to applying for financing help, many motel owners have a tough time going the traditional route. Traditional banks and lenders tend to list motels as high risk for various reasons such as seasonality, low numbers of guest bookings, negative reviews, lack of collateral to pledge when obtaining financing, and more. These concerns are all justified, but it’s not the end of the road. There are many alternative funding options available to motel business owner. Let’s take a look!
Motel Financing Options
Split Funding aka Merchant Cash Advance: Short-term financing transactions that are collected through a set percentage of your Visa and MasterCard sales that are accepted at your place of business. Probably the most common term used in the industry. These do not have a set repayment schedule and are based on the volume of your businesses credit card processing sales. These are usually only guaranteed by the future sales of your business.
Split Funding aka Merchant Cash Advance: Short-term financing transactions that are collected through a set percentage of your Visa and MasterCard sales that are accepted at your place of business. Probably the most common term used in the industry. These do not have a set repayment schedule and are based on the volume of your businesses credit card processing sales. These are usually only guaranteed by the future sales of your business.
Equipment Financing: Equipment Financing is a loan product used to help business owners purchase any type of equipment needed to run the business. The loan amount is dependent upon the type of equipment needed, as the repayment term is usually as long as the expected life of the piece of equipment and if it is used or new.
Term Loans: A loan that is backed by a bank for an exact amount that has a specified repayment timetable and interest rate that are adjusted accordingly. Terms mature between 1 and 10 years.
ACH Loan: These loans may need personal guarantees, and have a fixed repayment schedule that is paid either daily, weekly or monthly. These products are catered to industries that do not accept credit cards and need a fixed payment.
Business Lines of Credit: A rotating loan that gives business owners access to a fixed amount of money, which they can use day-to-day according to their need for cash. Interest is only paid on the amount of the advance actually used.
What Can Working Capital Acquired via Motel Financing Be Used For?
What’s great about all of the aforementioned motel financing options is that the working capital acquired through any of them can be used for virtually anything as long as it pertains to the business. Whether your motel has hit a rough patch and you need the capital to fix cash flow issues, or business is booming any you want to grow bigger and better, you can use it! Here are just a few popular working capital uses among motel owners:
– Business Expenses and Tax Payments
– Payroll and New Hires
– New and Additional Locations
– Equipment and Supplies
Three Crucial Steps to Take Before Applying for Motel Financing
As you would assume, there are many, many alternative lenders out there who can promise you the world when it comes to your motel financing needs. While most lenders and brokers out there are good guys, it is in your best interest to be cautious and to ask questions. Before you sign anything, make sure you fully understand the business funding solution you are applying for, how it works, and what the overall cost will be – literally and figuratively. Here are three crucial steps to take before you apply:
Identify Your Business’ Needs – First things first, why does your business need a loan in the first place? Sit down with your core staff members, financial advisers, or simply yourself to determine your business’ needs and how a quick business loan could help. Do you need to purchase inventory, hire additional staff, catch up on bills? Having a plan of execution once the loan is acquired is essential for success, as well as a plan for paying the loan back.
Do the Due Diligence – You may hear the phrase, “do the due diligence” a lot when researching quick business loans. In simpler terms, this means doing the necessary research before applying and accepting an offer with a lender. There are thousands of lenders and brokers out there – traditional and alternative. Don’t take everything at face value. Learn as much as you can about each lender you are interested in, compare pricing, read reviews, ask questions, and follow your gut if something just doesn’t seem right. You have the right to protect yourself and your business. The last thing you want to do is put your business in more of a financial bind or have setbacks. Research and knowledge is key. Do your due diligence.
Choose the Best Quick Business Loan Option – Maybe you did this when identifying why your business needs a quick business loan, but it’s a good idea to confirm again the type of loan product your business truly needs. Speak with your chosen lender to go over all of your options and get a better understanding of each financing option and how everything works.
Find Out What’s Needed To Qualify and Apply – All lenders have different business loan qualification guidelines. Depending on your business’ financial standing the amount of money you are looking to obtain, the documentation needed to be presented with an approval will vary. It is a good idea to at least have your last six months of business bank and credit card processing statements available, as well as additional financial documents like P&L and Balance Sheets and tax returns easily accessible.
The Application, Approval, and Funding Process
The great thing about motel financing is that the application, approval, and funding process is quick and simple. Generally, lenders that provide these financing options only require a simple, one-page application, four months of recent business bank statements, and four months of business credit card processing statements to get started. Once these pieces of documentation (and maybe a few others) are received, you can be presented with an approval and funded in as little at three business days!
For more information on motel financing options, contact one of our funding specialists today at 877-880-1106 or APPLY NOW!