Hotel & B&B Financing

Accommodation business finance can support a defined investment or cash-flow need, from replacing a boiler to refurbishing guest rooms. Hotels, bed and breakfasts and guest houses share many funding questions, so this page brings the options together.

Begin with the purpose and timetable. A room refit, a seasonal stock order and buying a property require different assessments. Include the cost of installation, any rooms taken out of service and the cash needed to continue operating while work takes place.

PDQ Funding helps trading accommodation businesses explore business loans and merchant cash advances. Explain how the business operates, how guests pay and whether you own or lease the premises. The provider decides whether funding is available and on what terms.

For additional premises or capacity, use our guide to business expansion finance. For a defined gap in operating receipts, read about working capital loans.

• Guest rooms: beds, furnishings, bathroom fittings and planned room improvements.
• Equipment: heating, laundry, refrigeration or kitchen equipment, including installation and servicing.
• Shared spaces: reception, breakfast rooms, dining areas or access improvements.
• Working capital: a defined gap in essential running costs ahead of expected receipts.

For a property purchase, extension or major development, identify the full project at the outset. A standard working-capital facility should not be assumed to cover a long property project. Mixed residential and business use also needs to be explained where relevant.

A business loan provides an agreed sum repaid over a set term, with interest and fees. A schedule can help you plan an investment, but payments remain due during quieter occupancy or a temporary closure.

Compare the interest basis, payment frequency and total repayable. For specific machinery, a suitable equipment finance quotation may offer another structure; check the deposit, ownership, maintenance and end-of-term obligations.

A merchant cash advance provides upfront funds with collections based on an agreed share of qualifying card receipts. Under that arrangement, the amount collected changes with eligible sales rather than using a conventional monthly loan instalment.

Explain direct bookings, terminal payments, online deposits and booking-platform settlements. Not every payment route qualifies in the same way. Confirm processor compatibility, any minimum payment conditions and the contractual total.

Use cash actually collected after booking commissions, refunds and operating expenses. A strong forward-booking list is useful context, but is not the same as money available to meet repayments.

Advance deposits also create a future commitment to provide accommodation. Allow for cleaning, breakfast, utilities and other costs still needed to fulfil those stays. Model a quieter occupancy period and the effect of any rooms being unavailable during refurbishment.

Compare net funds received, all charges and total repayable. For a cash advance, the collection percentage is separate from the funding fee. Check early settlement and closure terms. Unsecured funding may still require a personal guarantee; understand any personal liability and consider independent advice before signing.

Providers may review trading history, recent financial records, seasonal income, credit information, existing commitments and affordability. An amount cannot be guaranteed from room numbers or a single busy month.

• Recent accounts, management figures and business bank statements.
• Merchant statements and an explanation of platform settlements.
• Existing loans, leases and finance repayments.
• Supplier quotations and a forecast covering planned room closures.

For owner-occupied B&Bs or guest houses, explain the ownership and operating arrangement accurately. Tell the provider about a proposed purchase, change of ownership or planned seasonal closure before progressing.