Hotel & Motel Financing — Purchase, PIP & Rehab Bridge

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

1. RevPAR trough — model debt service through worst month, not peak
2. PIP overrun — FF&E inflation; hold 10%–15% contingency
3. Management transition — key employee retention during rebrand
4. Franchise termination — verify LOI before close on conversion deals
5. Environmental — Phase I on prior use (gas station adjacency, dry cleaner)

Related programs

• Industrial warehouse loans
• Retail strip center loans
• Bridge loans for investors
• Owner-occupied commercial — if operator occupies office component

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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