Benefits of using a commercial mortgage broker to finance a hotel

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Getting a commercial loan is similar to getting a commercial mortgage for owner-occupied commercial property. However, there are a few differences. Unlike a retail space or office building, the hotel property is only designed to contain a hotel. For this reason, a hotel commercial mortgage is considered riskier as opposed to a mortgage for other general-purpose commercial properties.

Because of this, finding a commercial mortgage broker like Clopton Capital is important if you want to get financing for your hotel property. Once a broker knows the type of financing you are looking for, they will help you find a lender with competitive terms to approve your loan.

Here are some of the advantages that can be accrued from working with a commercial mortgage broker to finance a hotel.

1. They have Experience

An excellent mortgage broker will have expertise in your industry to help you access financing tailored to your specific needs. Unknown to many, working with a competent commercial mortgage broker will enable you to get the right financing for your hotel property.

Based on their experience, they can protect you from certain lenders that have arduous payment terms in their contracts that you would otherwise not have identified on your own.

That being said, it pays to inquire about the broker’s experience before you choose to hire them. Also, ensure that they have completed the 12 modules LIBF accredited training course. This way, you can be assured that they will help you find lenders with the most competitive rates and terms.

2. Excellent Relations with Hotel Mortgage Lenders

A commercial mortgage lender is indeed as good as its lender network. What this means is that commercial brokers who have excellent relationships with well-know hotel mortgage lenders are more likely to strike a better deal than their counterparts.

Having worked with various lending sources, a trust relationship has already been established. Therefore, it will be easier for them to get the loan closed than it would if you approached the lender yourself. As a borrower, it will be wise to leverage such a relationship to get financing for your hotel property.

Additionally, it is also important to hire a commercial mortgage broker that has an excellent relationship with both decision-makers and lenders at the lending institution. This will quicken the process of loan approval and help it get to the stage of funding.

3. Negotiating LTV and Interest Rates

The loan to value (LTV) of a hotel property is usually lower than that of general-purpose properties. Plus, the LTV can decrease based on the age of the property and depending on whether it is interior or exterior property. For this reason, you need a broker that understands your loan to value ratio as well as the interest rates of various lending sources.

So unless you work with an experienced commercial mortgage broker who has expertise in credits, it will be very difficult to get yourself a great deal and longer-term loans.

4. Access to Multiple Funding Sources

A commercial finance broker is a specialist when it comes to working with various lending institutions and professional partners to get clients alternative funding solutions.

Having been in the industry for a long time, experienced brokers know to look for lenders that offer attractive terms, exceptional service, and support as well as a variety of financial products. The fact that they can access various lending sources across a wide range of products will undoubtedly increase your chances of getting financing for your hotel property.

5. They Save you Time and Effort

Compared to scouting for financing for your hotel on your own, using a commercial mortgage broker takes less time and effort. They will work with you to ensure a smooth application process, taking off the stress that is involved in getting a commercial loan for your hotel property. This will also save you the time of moving from one lender to another to find one who is willing to fund your hotel. This way, you can focus on your business and other investment opportunities.

6. Provide Bespoke Advice

Commercial brokers that are well established will examine the cases of their clients at an individual level and provide them with the best advice. Commercial brokers support funding for a wide range of people and businesses, ranging from small to large corporate. For this reason, they should strive to find the most appropriate financial solution for borrowers.

For your case as a borrower of loan for hotel financing, a good broker will provide bespoke advice based on the hotel market. They should use their skill to match your needs with the right mortgage products and lenders so you get the best possible deal. It is recommendable to avoid brokers that make blanket decisions based on other individuals or scenarios.

7. They Can be of Assistance After the Deal

The work of a commercial broker does not just stop after accepting the deal. On the contrary, they come in handy to work with various professionals to ensure that the process of getting funding goes as effortlessly as possible.

For instance, a broker will need to work with an accountant in the process of auditing your hotel accounts to show that you can afford to make the mortgage repayments. Additionally, they can work with a solicitor in ensuring that the legal work goes smoothly.

8. Help You Access Funding Even Without Traditional Security

Another advantage of using a commercial mortgage broker is that they are well versed to help you find funding for your hotel even when traditional security is unavailable. Unlike traditional banks that restrict their financing to guarantees and debentures and require security, commercial brokers can help you access loans for growth even without the security.


If you intend to get financing for your hotel property, then it is only wise that you get a competent and reliable commercial mortgage broker. The right broker will scout for a good lender and ensure that your mortgage application is approved. Although mortgage brokers will charge you a fee, their packaged solutions are worth it.

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About the Author: James Watt

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