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
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.