Investors searching hotel bridge loan, motel financing, and hotel renovation loan face RevPAR volatility, brand PIP requirements, and management transitions that residential lenders cannot underwrite.
Jaken Finance Group finances hotel and motel bridge acquisition and PIP nationwide — all 50 states. Rates: 8.99%–13.5% interest-only, terms 12–24 months.
Asset class hub: commercial property loans by asset class · Compare: commercial rehab loans
Hotel vs. motel — financing differences
| Factor | Full-service hotel | Motel / limited service |
|---|---|---|
| RevPAR driver | ADR + occupancy + F&B | Nightly room revenue |
| PIP scope | Brand-mandated — heavy FF&E | Lighter — owner discretion |
| Management | Often third-party (Marriott, Hilton) | Owner-operator common |
| Bridge LTV | 60%–65% | 65%–70% |
| Exit | CMBS, bank, flag refi | SBA (owner-op), bank |
Common hotel bridge use cases
| Scenario | Bridge fit |
|---|---|
| Independent acquisition | Fast close before flag decision |
| Flag conversion / rebrand | PIP + working capital in holdback |
| Distressed / underperforming | Reposition before permanent debt |
| FF&E replacement cycle | CapEx draw on stabilized asset |
RevPAR underwriting — what lenders review
RevPAR = ADR × Occupancy Rate — the core metric on hospitality bridge files.
| Input | Source | Red flag |
|---|---|---|
| T-12 room revenue | P&L | One peak month annualized |
| Occupancy trend | STR report / PMS export | Declining 90-day trend |
| ADR vs comp set | STR / CoStar | Discounting to fill |
| PIP estimate | Brand letter of intent | Unbudgeted FF&E |
| Management fee | Actual contract | Transition risk |
PIP draw schedule — typical structure
| Draw | Trigger | % of holdback |
|---|---|---|
| 1 | Franchise approval + demo start | 25% |
| 2 | FF&E delivery + room completion | 40% |
| 3 | Soft opening / inspection | 25% |
| Final | Brand sign-off | 10% retainage |
Draw mechanics mirror commercial rehab loans — lender inspection at each milestone.
Worked example — limited-service motel PIP
Interstate 65 corridor — 62-key limited service
| Line | Amount |
|---|---|
| Acquisition | $2,100,000 |
| PIP scope | $380,000 — rooms, lobby, signage, exterior |
| Bridge | 65% LTV + full PIP holdback |
| Pre-close RevPAR | $42 (trailing 12) |
| Post-PIP RevPAR (month 14) | $58 (+38%) |
| Occupancy | 61% → 71% |
| Exit | Regional bank refi at 1.22x DSCR on stabilized T-12 |
Flag vs. independent — financing implications
| Flagged (Marriott, Hilton, etc.) | Independent | |
|---|---|---|
| PIP mandatory | Yes — on conversion | Optional |
| Franchise fees | In pro forma | N/A |
| Exit pool | CMBS + flag lenders | Bank, SBA |
| Bridge timeline | Must align with flag approval | Faster |
Risks specific to hotel bridge
- RevPAR trough — model debt service through worst month, not peak
- PIP overrun — FF&E inflation; hold 10%–15% contingency
- Management transition — key employee retention during rebrand
- Franchise termination — verify LOI before close on conversion deals
- Environmental — Phase I on prior use (gas station adjacency, dry cleaner)
Hotel/motel bridge — RevPAR stabilization timeline
$2.4M flagged motel · 62% occupancy · $48 ADR
| Milestone | Month | Action |
|---|---|---|
| Close bridge 70% LTV | 0 | 8.99%–13.5% IO |
| PIP (property improvement plan) | 1–8 | Franchise or independent rebrand |
| Occupancy ramp 62% → 78% | 9–18 | Revenue management |
| Refi bank/SBA on stabilized NOI | 18–24 | Permanent below bridge rate |
Underwrite FF&E reserve, franchise fees, and management agreement — not SFR ARV math. Commercial CRE hub · SBA hub · bridge loans.
Related programs
- Industrial warehouse loans
- Retail strip center loans
- Multifamily bridge 5+
- Office building bridge
- Car wash & gas station financing
- Bridge loans for investors
- Owner-occupied commercial — if operator occupies office component
Get approved · Submit scenario · Commercial property calculator
RevPAR-driven underwriting
Hotels underwrite on RevPAR (occupancy × ADR), not residential rent. Bridge lenders require trailing 12-month P&L with monthly occupancy — seasonal properties must show winter trough.
| Metric | Stabilized refi target |
|---|---|
| Occupancy | 65–75%+ (product-dependent) |
| ADR trend | Growth vs discounting |
| PIP status | Complete before permanent |
| DSCR | 1.25x+ on T-12 NOI |
PIP draw sequencing
| Draw | Scope |
|---|---|
| 1 | FF&E orders + soft demo |
| 2 | Guestroom soft goods + bath |
| 3 | Public area + brand standards |
| Final | PIP sign-off + franchise inspection |
Underwriting mistakes sponsors make
- Annualizing peak summer occupancy for DSCR
- PIP incomplete at refi application
- Ignoring franchise PIP requirements on flagged assets
Permanent debt transition
Bridge at 8.99%–13.5% typically carries 12–24 months. Permanent hotel debt (CMBS, SBA, or bank) targets 1.25x DSCR on T-12 NOI at 65%–75% LTV. Plan the refi application 90 days before bridge maturity.
Pre-qualify hotel bridge · commercial property loans by asset class · (833) 264-7776
Room prices, payrolls, and what they do not measure
Hotel bridge loans are not priced off a residential rent roll. Two federal series describe the lodging business itself, and neither one is a renovation bid.
The producer price index for hotels and motels was 183.402 in August 2026, up from 178.424 in August 2025. That is about 2.8%. See FRED series PCU721110721110. This index tracks prices for hotel and motel services. It is not a furniture or construction index. Do not inflate a property-improvement budget by 2.8% and call it a sourced FF&E number.
The consumer price index for lodging away from home was 190.316 in August 2026, compared with 184.457 a year earlier, about 3.2%. See FRED series CUSR0000SEHB. Guests paid a bit more for a room. Your trailing twelve can still fall if occupancy fell faster than rate rose. Read the monthly P&L. Do not annualize July.
Accommodation employment was 1,916.5 thousand in September 2026, versus 1,921.4 thousand in September 2025. See FRED series CES7072100001. National payrolls were nearly flat. A limited-service motel that cannot staff the desk will miss the occupancy ramp in the bridge model even when the PIP finishes on time.
Depreciation class is not the same as a house
IRS Publication 946 draws a line sponsors mix up. Residential rental property generally uses a 27.5-year recovery period. Nonresidential real property uses 39 years. A dwelling unit, for this purpose, does not include a unit in a hotel, motel, or other establishment where more than half the units are used on a transient basis. See IRS Publication 946. A typical transient motel therefore sits outside the residential-rental class. Personal property inside the rooms can have a shorter life than the building. This is a description of the published rule, not tax advice. Your preparer has to classify the specific assets.
That split changes the permanent-loan story more than the bridge coupon. A buyer who models the building like a 27.5-year rental house will overstate early depreciation. Lenders underwriting a refinance still care about cash DSCR on the trailing twelve, not about the depreciation schedule. Keep both numbers, and do not substitute one for the other.
The bridge and the 504 loan are different debts
Jaken Finance Group’s hotel and motel bridge is interest-only at 8.99%–13.5%, with terms of 12–24 months, in all 50 states. A complete bridge file closes in 7–10 business days. Leverage on these hospitality files is commonly tighter than a house flip, often in the 60%–70% range shown above, because revenue moves with occupancy.
A 504 loan is a different product. The Small Business Administration describes it as long-term, fixed-rate financing of up to $5 million for major fixed assets. Certified development companies originate it with a senior lender. It is a permanent-debt tool for an eligible operating business. It is not the acquisition bridge, and Jaken Finance Group does not originate it as the short-term facility on this page. If the exit is SBA, start that application while the PIP is still underway. Waiting until month 22 wastes the seasoning the permanent lender will ask to see.
Example: interest while a 48-key PIP is only half drawn
Illustration only. It is not the 62-key interstate example earlier.
| Line | Amount |
|---|---|
| Purchase price | $3,200,000 |
| Bridge at 65% of price | $2,080,000 |
| PIP budget held back | $480,000 |
| PIP contingency, 10% | $48,000 |
| Total facility if fully drawn | $2,608,000 |
At an example rate of 11%, interest on the $2,080,000 acquisition piece is about $19,067 a month before any PIP draw. Eleven percent is inside 8.99%–13.5%. If the PIP is drawn evenly and the average PIP balance over eight months is half of $480,000, that is $240,000. Interest on that average balance for eight months is about $17,600. Combined carry for those eight months is roughly $170,000 before operating shortfalls. A model that expenses only the acquisition interest will look $17,000 to $18,000 too optimistic.
Debt service for the exit should use the worst three months in the trailing twelve, not the grand-opening month. If those weak months do not cover the bridge interest, the sponsor’s liquidity has to. National room-price indexes rising about 3% do not fill a winter trough at a highway motel.
What to send with a hotel or motel package
- Monthly trailing-twelve P&L, with occupancy and average daily rate by month, including the slow season.
- A management agreement or an owner-operator plan, and who runs the desk during the PIP.
- The brand’s property-improvement letter, or a statement that the asset will stay independent.
- Franchise fees in the pro forma if a flag is part of the exit.
- Phase I environmental if the site has a prior gas station, dry cleaner, or underground tank.
- A PIP budget with a named contingency. Ten to fifteen percent is the range to discuss, not a hidden cushion.
- The permanent-debt path: bank, 504, or another takeout, and the month you will apply.
- Proof the sponsor can fund interest and payroll if occupancy dips during construction.
Pre-qualify the bridge with the trailing twelve attached, or submit the scenario. For the payment test on a stabilized takeout, use the commercial property calculator. Call (833) 264-7776 when a purchase contract is already ticking.
Rates, terms and conditions offered only to qualified borrowers and are subject to change at any time without notice. All loans are subject to full underwriting for loan approvals. Jaken Finance Group only finances non-owner occupied investment properties.