Hotel · Hospitality

Hospitality financing that underwrites the operator, not just the building.

Hotels are an operating business wrapped in real estate — and most banks underwrite them like any other commercial asset, then decline. We know the lenders who price hospitality based on RevPAR, flag, operator track record, and PIP cycle. Limited-service, full-service, boutique, motel — we've placed all of them.

Term sheets in 10–15 days15+ hospitality-active lenders RevPAR / ADR underwriting

5-star rated| FSRA #13737| 5-min pre-qualification

Hotels, motels, boutique hospitality

Borrow 50–70% of the property's value

We underwrite to your hotel's actual performance — revenue per room, occupancy, flag strength — not generic asset-class rules.

50–70%

LTV (by flag tier)

RevPAR

Key metric

STR

Smith Travel data

60–90d

To funding

Flag tier · lender appetite

Marriott

Flagged top-tier accesses tightest pricing; independent files require RevPAR story.

Get pre-approved Run DSCR

Maya · AI · 24/7

What lender will finance a flagged hotel?

5-star rated| FSRA #13737| 50+ langs

50-65%

LTV (stabilized)

10-15d

Term sheet turn

15+

Hospitality lender partners

PIP-aware

Renovation reserves

Hotels are operating businesses wrapped in real estate. Most banks decline because their commercial desk underwrites the building as if it were retail or industrial — ignoring RevPAR, ADR, occupancy seasonality, flag quality, PIP cycle, and operator track record. Even when they say yes, the term sheet doesn't reserve for PIP, so two years later you're scrambling for capex financing while the flag threatens disenrollment. Independent boutique operators get the worst of it — written off entirely by the general commercial desk. We've placed flagged, branded, boutique, and motel files across 15+ hospitality-active lenders who actually price by RevPAR + flag + operator history, not just LTV.

Financing options

Five financing structures for hospitality assets.

Hospitality is operating-business-as-real-estate. We structure for the operator track record, the flag (or lack of one), the renovation cycle, and the seasonal cashflow profile.

Limited-Service Acquisition

Hampton, Holiday Inn Express, Best Western, Comfort Inn, Days Inn. 50–65% LTV, A-bank or specialized hospitality lender.

$3M – $30M75-120 days

Full-Service Acquisition

Marriott, Hilton, IHG flagged full-service. 50–60% LTV. Specialized lender list. Operator track record critical.

$10M – $75M+90-150 days

PIP / Renovation Financing

Property Improvement Plan capex required by flag. We layer a PIP envelope into your mortgage or as a parallel facility.

$500k – $10M45-90 days

Bridge / Reposition

Conversion (motel → boutique), flag-change, post-COVID recovery. 50–65% LTV bridge with refinance into stabilized term.

$2M – $20M30-45 days

Refinance / Recapitalization

Pull equity from stabilized hotels at lower rate or extend term. Common after a strong RevPAR year or flag renewal.

$3M – $50M+60-90 days

What we finance

Hospitality asset profiles we finance.

Flag matters more than market. A flagged limited-service in a secondary city often prices better than an independent boutique in downtown Toronto. We map both for you.

🏨

Limited-Service Flagged

Marriott/Hilton/IHG/Choice

🏛️

Full-Service Flagged

Westin, Sheraton, DoubleTree

🌆

Boutique Independent

Toronto, Vancouver, Montreal

🛏️

Extended-Stay

TownePlace, Residence Inn, Homewood

🛣️

Motel / Roadside

Highway-adjacent independent

🏞️

Resort / Destination

Lake / mountain / golf-attached

🏗️

Conversion Plays

Office → hotel, motel → boutique

🔄

PIP / Renovation Cycle

Mid-cycle capex envelopes

What you get

Why sponsors choose Mortgage Squad Advisors.

Up to 65% LTV stabilized; PIP reserves built into the structure from day one

RevPAR / ADR / occupancy underwriting — not generic asset-class pricing

Flag-tier appetite mapping (Marriott / Hilton / IHG / Choice / Wyndham / Best Western)

Independent + boutique placed with specialty hospitality desks

Acquisition + PIP financing structured as one transaction (avoids re-underwriting in year 2)

Seasonal cashflow modelled — interest reserves sized to the slow quarter, not the annual average

Bridge for PIP-required acquisitions where post-renovation NOI doesn't yet support permanent debt

$0 placement fee on most senior debt — lender pays our compensation

Term sheets in 10–15 business days from STR report + sponsor profile

20+ years across every hospitality cycle — including the 2020–2022 RevPAR collapse and recovery

Maya · 24/7 AI advisor

Have a question right now? Maya answers instantly in 50+ languages.

Chat Call

How it works

From operator package to funded — three to five months.

Hospitality underwriting is the most extensive commercial workflow we run. Expect more diligence than any other asset class — but with the right operator package, the deal will close.

Operator + asset intake

Operator track record, STR / hotel data, T12, flag agreement, PIP schedule. We assess RevPAR, ADR, occupancy trends.

Lender shortlist

3-4 hospitality-active lenders sized for your flag and operator. Indicative pricing in 10-15 days.

Operator due diligence

Background, prior properties, references, financial capacity. Hospitality lenders underwrite operators as much as buildings.

Conditions

Appraisal (specialized hospitality appraiser), franchise comfort letter (if flagged), PIP envelope, environmental, structural.

Funding

Lawyer closes. PIP funds typically held by the lender and disbursed against approved invoices over 12-24 months.

Run the math first

Why a broker beats your bank

Hospitality requires a lender who actually does hospitality.

Most generalist commercial banks decline hospitality. The 15 lenders in Canada who actually price hospitality competitively are a closed network — and we have relationships with most of them.

Capability

Mortgage Squad Advisors

Your bank

Lenders shopped

15+ hospitality-active

1 (often will decline)

RevPAR / ADR underwriting

Yes — STR data interpreted in-house

Generic DSCR

Flag-aware pricing

Marriott vs Hilton vs IHG modelled separately

One blanket policy

PIP envelope structuring

Layered into mortgage or as parallel facility

Sponsor finds it elsewhere

Boutique / independent

Specialized lender relationships

Usually declined

Time to first quote

10-15 days

6-10 weeks

Operator track record

Pre-vetted with lender ahead of submission

Submit-and-hope

“We were acquiring a 124-key Holiday Inn Express in Niagara that needed a $2.4M PIP within 18 months. Three banks said they couldn't structure the PIP envelope. Mortgage Squad Advisors placed the acquisition + PIP as a single facility at 62% LTV with the PIP funds held in escrow. We closed in 16 weeks and finished the renovation 4 months ahead of schedule.”

— Tina F., Director, Niagara Hospitality Group

By market

Hotel · Hospitality across major Canadian markets

We place commercial files coast to coast. Pick your market for local context and start a pre-qualification with your deal in mind.

Don’t see your city? Browse all Canadian markets — commercial coverage is national.

Why is hotel financing treated differently from other commercial real estate?

A hotel is two assets in one: an operating business and the real estate it runs on. Unlike a leased office or industrial building where a signed tenant covenant carries the debt, a hotel re-sells every room every night — its income resets daily and depends on management, demand, and the local market. Lenders underwrite that reality. They focus on cash-flow metrics, not just bricks-and-mortar value: RevPAR (revenue per available room), ADR (average daily rate), occupancy, and the net operating income those drive after departmental and undistributed costs.

They also weigh the flag — the brand the property operates under — and the operator running it. A property with strong, stable RevPAR and a credible operator supports more debt than the appraised value alone would suggest; a weak or volatile one supports less. That is why a generalist commercial desk that prices off cap rate and square footage routinely mis-reads hospitality. Getting it financed means presenting it the way a hospitality lender actually evaluates it: as a business with a building attached, not a building with some income.

How much does the franchise flag affect my hotel financing?

The flag — whether the hotel runs under a recognized brand or trades as an independent — shapes lender appetite, pricing, and resale liquidity more than almost any other single factor. A nationally recognized brand brings a reservation system, loyalty demand, brand standards, and a predictable revenue floor. Lenders read that as lower volatility, so flagged limited-service typically draws the widest lender list and the tightest terms. Independent and boutique properties can absolutely be financed, but the lender list narrows and the structure leans harder on the operator’s track record and the property’s competitive position.

The flag also carries an obligation that catches owners off guard: the Property Improvement Plan (PIP) — the franchisor’s mandated renovation schedule for rooms, lobby, and common areas. A looming PIP is a real capital liability a lender will price for, and an unfunded one can threaten the franchise agreement itself. We map your flag’s standing and PIP timeline up front so the financing reflects the brand’s reality, not a generic assumption.

What loan-to-value and structure should I expect on a hotel mortgage?

Expect a lower loan-to-value than most other commercial assets — commonly in the 50–65% range, with flagged limited-service at the upper end and independent or full-service properties often lower. The discount reflects operating risk: income that resets nightly is simply riskier collateral than a long-leased building, so lenders hold a larger equity cushion. Amortization tends to run shorter than the 25–30 years common elsewhere, which raises the debt-service payment the cash flow has to cover.

Lenders also weight the sponsor heavily. An experienced operator — ideally with comparable properties under management — meaningfully improves both approval odds and terms, while a first-time hotelier should plan for tighter leverage. Personal guarantees are the norm on hospitality debt, and lenders frequently require interest or capital reserves sized to the property’s seasonal low, not its annual average. Knowing these parameters before you write an offer keeps your equity assumptions and closing timeline realistic. Model the payment with our commercial calculators before you commit.

Which lenders actually finance hotels in Canada?

Far fewer than you might assume. Many of the big banks’ generalist commercial desks are cautious on hospitality or decline it outright, and government-backed insurance has limited appetite here — CMHC is built around residential and multi-family, so hotels generally fall outside conventional insured programs. That leaves a smaller, specialized field. Specialty hospitality lenders with dedicated credit teams understand RevPAR, flags, and PIP cycles, and they price accordingly. Private and alternative capital fills the gaps the institutions leave — bridge financing for a repositioning, a flag change, a PIP-required acquisition, or a recovery story where stabilized income hasn’t yet caught up to permanent-debt requirements.

The practical problem is access: this is a relationship-driven, largely closed network, and approaching it cold — or with the wrong lender for your flag and operator profile — wastes weeks and burns credibility. We maintain working relationships across 100+ lenders, including specialty hospitality desks and private capital, so your file goes to the few who actually want it rather than the many who will pass.

What does a mortgage broker add on a hotel financing deal?

On hospitality, the broker advantage is real and measurable. The work is in the packaging: assembling a clean trailing-12-month operating statement, the STR (Smith Travel Research) report that benchmarks your RevPAR against the competitive set, the franchise agreement and comfort-letter path, the PIP schedule and completion status, and an operator profile that proves you can run the asset. Hospitality lenders underwrite all of that, and a file that anticipates their questions moves faster and prices better than one that doesn’t.

The second half is access — routing that package to the handful of lenders whose appetite fits your specific flag, asset type, and sponsor strength, then negotiating leverage, amortization, PIP envelope, and reserves across competing term sheets rather than accepting a single bank’s shelf offer. As a full commercial desk and an FSRA-licensed brokerage (#13737) with fees disclosed in writing and service in 50+ languages, we structure the borrowing around the operating business you actually run. Start with our commercial hub or send us your operator package.

FAQ

Common questions, answered.

Don’t see yours? Ask Maya — instant answer, any time.

Why are hotels harder to finance than other commercial?

Hotels are an operating business — revenue depends on daily occupancy, ADR, and operator skill rather than long-term lease covenants. Most banks underwrite real estate, not operating businesses. The lenders who finance hospitality have specialized credit teams that understand the cyclicality and operator dependence; we have relationships with most of them.

What LTV can I get on a hotel?

Stabilized flagged limited-service: 55-65% LTV. Full-service flagged: 50-60% LTV. Independent boutique: 50-55% LTV. Motel/roadside: 50-60% LTV depending on operator and condition. Higher LTVs are achievable on owner-occupied or with mezzanine layers.

What's a PIP and how do I finance it?

Property Improvement Plan — flag-mandated renovation schedule (rooms, lobby, F&B, exterior). Typical PIPs run $15-40k per key on a 7-10 year cycle. We can layer the PIP envelope into your acquisition mortgage (held in escrow, drawn against approved invoices) or as a parallel facility post-closing.

Will lenders finance independent boutique hotels?

Yes — but the lender list narrows sharply. Boutique requires a strong operator track record, healthy STR positioning vs the comp set, and usually a lower LTV (50-55%). We work with 3-4 specialized lenders who actively pursue boutique hospitality.

What about motels — will lenders touch them?

Yes, with the right operator and clean environmental. Motels with stable cashflow and a credible operator can finance at 50-60% LTV. The pricing is wider than flagged hotels but the deal is workable. We've placed many motel acquisitions and motel-to-boutique conversions.

Do hospitality lenders require franchise comfort letters?

For flagged hotels yes — the franchisor (Marriott, Hilton, IHG, Choice, Best Western) issues a comfort letter to the lender confirming the franchise agreement is in good standing and outlining termination conditions. We coordinate this with the franchisor's lending desk early in conditions.

What's the typical hotel mortgage rate?

Limited-service flagged: 5-yr GoC + 200-300bps. Full-service flagged: 5-yr GoC + 250-350bps. Boutique/independent: 5-yr GoC + 300-450bps. Bridge runs 9-13%. Pricing depends heavily on operator strength and STR positioning.

What documents will I need?

Asset: T12, STR data, flag agreement, room mix, PIP schedule, current PIP completion status, capex history, franchise comfort letter. Sponsor/operator: hospitality CV, prior property list, banking, T2s, REO schedule, government ID. Plus appraisal (lender-ordered specialized hospitality appraiser).

Editorial commitment

This hotel · hospitality page is an editorial profile written from our brokerage’s perspective by Mortgage Squad Advisors Editorial Team · Licensed Mortgage Advisors · Reviewed under the Principal Broker. We receive no compensation from any specific lender for this content. On most commercial files the lender pays our placement fee; we disclose compensation in writing on every deal. Program details and rates are reviewed quarterly; last reviewed May 13, 2026.

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Hotel deal in motion? Let's structure it.

Send us your operator package + asset summary. We'll come back with a hospitality-lender shortlist + indicative pricing within 10-15 business days.