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Expand Your Hotel Financing Options with the SBA 504 Loan Program


The tourism industry is a booming sphere all around the world. Be it for regional places of interest of internationally acclaimed tourist spots, having a hotel in such spots, ensures a steady and more often than not, profit generating cash flow. While having a hotel leads to profits, building or upgrading one needs investing in them beforehand.


If you are thinking of owing your own hotel, or want to upgrade one already owned, looking for SBA hotel loans in Austin TX would be your best bet. Read on to find out why you should go for SBA loans, and how Proactive Lending Group, LLC can assist you in getting a good SBA loan in Austin TX.


What are SBA loans?

SBA stands for Small Business Administration. The US SBA is an organization which enables small businesses to apply for loans in order to finance their business, especially providing guidelines for loans and reducing lender risk. The loan amount for an SBA loan can vary from $50000 to $5.5 Million.


SBA loans can be used for fixed as well as working capital, depending on the loan program applied for. There exist 3 different loan programs under SBA:


  • 7(a)-most common loan program, can be used for both fixed and working capital needs. Up to $5 million can be sanctioned.

  • 504– for assets promoting business growth and job creation, cannot be used as working capital. Up to $5 million can be sanctioned, $5.5 million in specific cases.

  • Microloans-used for working capital and equipment, cannot be used for real estate purchase and debt clearance. Up to $50000 can be sanctioned.


Why to go for SBA Hotel Loans in Austin TX?

Considering the restrictions and requirements for the loan programs, a 504 SBA hotel loan is the best option for financing hotel purchase or upgradation needs in Austin TX. A 504 SBA loan only requires 10% down payment from the borrower, reducing lender risk at the same time, as the lender only has to guarantee a small portion, with the government handling the rest. SBA 504 loans can disburse up to $5 million for fixed asset purchase and development with the repayment term of 10 years for equipment and 20 years for real estate purchases. Fixed assets include the land, building, machinery or new facilities. In a similar vein, instead of acquiring fixed assets, the disbursed funds can also be used to upgrade and modernize the existing assets. However, the loans from a 504 SBA hotel loan in Austin TX, does not allow its usage as working capital, or to repay earlier debts.


What all do you need to be eligible for an SBA Hotel Loan in Austin TX?

In order to qualify for a 504 SBA hotel loan in Austin, there exist certain requirements, which must be fulfilled:


  • Operate as a for-profit in US.

  • Tangible net worth of $15 million or less.

  • Average income of $5 million or less for two years preceding the application.


If you or your establishment fall in the above criteria, contact Proactive Lending Group, LLC, operating in Austin TX for free appraisal and consultation for your SBA hotel loans. They work with customers having good project and financials, and will be a good option for people looking to finance their hotel building needs