Since 2011, United Capital Source has been working with dozens of Holiday Inn Hotels & Comfort Inn Motels.
Key Takeaways:
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🔑 $850K funded to a Holiday Inn in NY via alternative lending — perfect for owners with less-than-perfect credit.
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🏨 Holiday Inn franchises require high startup capital ($7.5M—$98.5M) but offer global brand recognition and strong support.
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💳 Loan options include: SBA loans, business lines of credit, term loans, merchant cash advances, and equipment financing.
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📈 Hotel upgrades (rooms, signage, gyms) are key to staying competitive against Airbnb, TripAdvisor, etc.
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📊 Pros: Access to IHG support, flexible financing, strong brand loyalty, and growth potential in high-traffic areas.
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⚠️ Cons: High initial costs, royalty fees, complex applications, and limited franchisee flexibility.
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📝 Application steps: Choose product ➝ gather docs ➝ apply ➝ consult rep ➝ receive funding (often in 1–3 days).
As the travel industry has boomed in recent years and new competition from online websites, including Airbnb and TripAdvisor, blossomed, hotel and motel operators have improved their property’s facades, refurbishing rooms and restaurant decors as well as upgrading leisure facilities (pools and gyms).
Also, given travelers have instant access to last-minute booking options from a travel website like Expedia and Hotels.com, there has been more awareness of upgrading hotel properties to cater for this online accommodation for shoppers who make buying decisions on travel reviews and actual photos taken by guests posting them to sites like TripAdvisor. This has impacted cash flow and increased hotel/motel franchise owners’ need to seek working capital loans.
Fortunately, United Capital Source has a finance team that understands the hotel franchise business model and provides small business loans for hotels and motels. Whether it is additional capital needed for new signage, exterior painting of the building, internal furniture, bathroom renovations, or new kitchen equipment, United Capital Source understands the financing requirements and lending options.
Hotel Franchising & Financing Facts and Stats
The hospitality industry is lucrative due to increasing accessibility in domestic and international travel, making hotel franchising an attractive opportunity for entrepreneurs and investors. Hotel franchises allow franchisees to operate under an established brand, benefiting from its recognition and support. Many hotel owners experience profitable returns on their investments.
Hotel franchises have become one of the most popular business models in the hospitality industry. When opening a hotel franchise, franchisees have the opportunity to connect with a global support network, which can streamline operations and improve guest experiences. Some hotel franchises may involve lower operational costs, making them more accessible to new franchisees.
Initial investments for starting a hotel franchise can be substantial, often requiring significant financial resources. Royalty fees are typically a percentage of gross room revenue paid by franchisees to franchisors. In return, franchisors usually provide training and support to help franchisees successfully operate their hotels.
Market research is crucial for prospective hotel franchisees to understand customer demand and competition. Hotel owners who perform due diligence and develop a strong hotel vision often build profitable businesses. Some of the best hotel franchises for small business owners include Days Inn, Red Roof Inn, and Super 8. Holiday Inn is one of the most popular hotel franchises.
Full-service hotel franchises offer a wide range of guest services, including room service and conference facilities. These amenities can significantly enhance the guest experience and support higher occupancy rates.
How to Start a Holiday Inn Franchise
The hotel industry continues to thrive thanks to rising domestic and international travel. Holiday Inn and Holiday Inn Express are recognized hotel brands founded in 1952. They are part of the IHG Hotels & Resorts family and have become iconic names in the hotel industry. The Holiday Inn franchise offers midscale to luxury rooms and is known for its value and dependability.
Holiday Inn has four tiers: Holiday Inn, Holiday Inn Express, Holiday Inn Club Vacations, and Holiday Inn Resort. Over 6,300 Holiday Inn locations worldwide showcase the brand’s expansive reach and reliability.
Potential franchisees should be financially prepared for an initial investment, including a franchise fee and startup costs. Typical initial investments to start a Holiday Inn franchise can range from approximately $7,500,000 to $98,500,000. Holiday Inn franchises generally require a franchise fee of $139,284. Private investors may have additional costs, such as business licenses.
Franchisees may have access to a global support network and marketing strategies through Holiday Inn. After approval by IHG Development, franchisees are connected with a Hotel Openings Services & Transitions (HOST) team member. Franchisees have the flexibility to build, convert, or develop hotels in mixed-use locations.
Franchisees must be committed to quality customer service and have strong community respect. Royalty fees for Holiday Inn franchises typically include ongoing fees based on gross room revenue. Franchise owners benefit from the brand’s established customer base and loyalty program.
Holiday Inn Franchise Financing Options
Owning a Holiday Inn franchise requires a substantial financial commitment, but various small business loans can help entrepreneurs obtain financing. Whether you’re looking to acquire an existing hotel, build a new property, or renovate a location, small business owners can access various hotel business loans.
Business Term Loans
Business term loans are one of the most common loan programs for hotel owners. Term loans for hotels are available as both short-term and long-term options. Long-term loans can accommodate larger sums of money with repayment terms from 2 to 25 years. Short-term loans often require lower credit scores and provide quick funding, making them an ideal solution for urgent working capital needs.
Business Line of Credit
A business line of credit provides flexible funding to cover hotel cash flow needs. With a revolving credit structure, hotel franchise owners can draw funds for unexpected expenses, operating costs, or seasonal fluctuations.
Merchant Cash Advances
Merchant cash advances offer funding in a lump sum in exchange for a percentage of future sales. This financing option is often used by hotels experiencing high credit card transaction volume and needing fast working capital.
Equipment Financing
Many hotel owners require equipment financing for various needs. Equipment loans can serve as collateral for necessary hotel property equipment. Equipment financing can preserve working capital while upgrading your hotel infrastructure, whether for room furnishings, kitchen appliances, or front-desk systems.
SBA Loans
SBA loans are an excellent option for franchise hotel financing. An SBA loan program partners businesses with SBA-approved lenders for financing. SBA loans are frequently used to acquire and/or renovate hotels. The loan term for SBA hotel loans is 25 years. The US Small Business Administration partially guarantees these loans.
The SBA 7(a) loan program is typically faster to obtain than the 504 loan program. Interest rates for SBA 7(a) loans generally range from 2.75% plus the prime rate. Most SBA hotel loans are for 25 years since real estate is used as collateral. SBA 504 loans combine a traditional bank loan with funds from a non-profit community development corporation. You can obtain an SBA 504 loan for up to $5.5 million.
Qualifying for SBA Loans
Applicants must meet specific criteria to obtain SBA hotel loans. An ideal business loan credit score is typically 670 or higher to obtain favorable loan terms. A detailed business plan is essential for securing an SBA hotel loan, and organizing your financial documents is critical when applying for one.
For hotel financing, the SBA partners businesses with SBA-approved lenders. Due to their favorable terms, SBA loans are highly sought after in the hospitality industry.
What are the advantages of Holiday Inn Franchise Business Loans?
Holiday Inn franchise loans offer tailored financing options to meet the unique needs of hotel business owners. By partnering with a globally recognized hotel brand like Holiday Inn, entrepreneurs gain access to a loyal customer base and benefit from the company’s established reputation in the hospitality industry.
Financing options are flexible and designed to support various hotel financing needs, including property acquisition, renovations, and new construction. Business owners also have the opportunity to convert existing hotels or build new properties in strategic locations, maximizing market potential.
Lower interest rates may be available for qualified applicants with strong credit and solid financials, further enhancing the loan’s affordability. Holiday Inn’s robust brand support, proven marketing campaigns, and global infrastructure also strengthen its long-term growth prospects.
What are the disadvantages of Holiday Inn Franchise Business Loans?
While Holiday Inn franchise loans provide significant benefits, there are also some crucial challenges to consider. The initial investment and franchise fee can be substantial, which may pose a barrier for some small business owners.
In addition to upfront costs, ongoing royalty fees and operational expenses can affect overall profit margins. The application and approval process for franchise financing can be time-consuming and often requires extensive documentation and financial disclosures.
Applicants with lower credit scores may face higher interest rates, making financing less affordable. Furthermore, the terms outlined in the franchise agreement can be strict, potentially limiting a franchisee’s operational flexibility and decision-making authority.
Holiday Inn Franchise Business Loan Pros & Cons
Pros:
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Access to global support and an established brand reputation
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A variety of financing options, including SBA hotel loans
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Favorable loan terms for qualified applicants
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Opportunities to develop in high-traffic markets
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Structured support from IHG Hotels through HOST team
Cons:
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High initial investment and franchise fee
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Ongoing royalty fees and marketing campaigns
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Complex loan applications with detailed financial requirements
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Possible higher interest rates for lower credit scores
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Limited flexibility due to franchise agreement requirements
How To Apply for Holiday Inn Business Loans:
The amount of paperwork required depends on the product you choose. Funds can be approved and distributed for most products within 1-3 business days. Here’s how to apply:
Step 1: Choose the Right Product
The first step is choosing the most sensible solution to the problem at hand. This should require some research, as each product is designed for different types of expenses and cash flow cycles. Are you looking to cover a short-term or long-term expense? Is demand expected to increase or decrease in the coming months?
Considering the funds’ purpose will also help us determine the correct borrowing and terms for your needs.
Step 2: Gather Your Documents
Here are the documents and information required for Franchise Financing Loans:
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Driver’s license
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Voided business check
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Bank statements from the past three months
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Invoice for equipment (for Equipment Financing)
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Credit card processing statements from the past three months (for Merchant Cash Advance)
SBA loans require additional documents and information, such as financial statements. To learn what’s needed for the SBA-backed loans, visit our SBA loan page.
Step 3: Fill Out Application
You can begin the application process by calling us or filling out our one-page online application. Either way, you’ll be asked to enter the information from the previous section along with your desired funding amount.
Step 4: Speak to a Representative
Once you apply, a representative will contact you to explain the repayment structure, rates, and terms of your available options. This way, you won’t have to worry about any surprises or hidden fees during repayment.
Step 5: Receive Approval
If you’re approved, we’ll contact you within 24 hours. After closing, funds for most business financing products should appear in your bank account within 24 hours to one week.
Your Holiday Inn Business Loan Gets Set Up – Now What?
Your business loan isn’t just a way to get financing for your business. It’s also an excellent opportunity to start building (or improving) your credit.
Regardless of the type of business loan you get, make all your required payments on time and in full. If you get a business credit line or another form of revolving credit, keep your balance below the credit limit.
Consistently making your business financing payments on time and in full will positively impact your credit. And that means preferred rates and terms when you next need business financing.
What If I’m Declined For a Small Business Loan?
If your application is declined, it’s possible that you applied for the wrong product to meet your cash flow needs. In this case, we would likely recommend a different product with a less hazardous repayment structure.
Your application might also be declined if it is determined that you cannot afford to take on more debt at this time.
If your credit score is holding you back from accessing financing, consider working with a reputable credit repair service to raise your scores.
