Commercial Real Estate Loans

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Commercial Mortgage Loans Misc

Bed & Breakfast Loans and B & B Lenders


Bed & breakfast loans can be difficult to fund.  Lenders tend to not like this product category as it carries a few stigmas.  For example, out of the way rural location (resort areas), lack of borrower experience (as many wish to "retire" into owning a B & B) and relatively small loan amounts.

Conventional B & B Loans

Loan to values on conventional programs for B & B's can still go as high as 60% on purchases and rate and term refinances and up to 55% on cash out refinances.  Keep in mind however that conventional programs vary widely from one lender to the next and it is not uncommon for a lender to ask for cross colaiterilize to improve their position.

  • Loan to Value is up to 75% of appraised value
  • Cash-out up to 60% of appraisal value
  • Fixed periods from 3, 5, 7, 10 years.
  • Loan amounts from $400,000 - $5,000,000

Bed and Breakfast SBA 504 and SBA 7a

The 504 and 7A loan programs, which are guaranteed through the Small Business Administration offer some of the best finance options for borrowers seeking acquisition and refinancing capital (Note that it is possible to refinance a B & B via the 7a program). The primary benefit of the 504 program is twofold, high leverage (85% LTV), long term, fixed rate financing.  The 7a program is geared towards loans under $2,000,000 and is an ideal program for B & B loans.

Note that we offer a SBA 7a thats structured as a 5 year fixed, 25 year amortization loan.   

Loan Structures

  • Financing available on projects up to $10,000,000
  • Bank financing typically provides a first mortgage of up to 50% of the total project cost.  This loan can range from $500,000 to $6,000,000.
  • The SBA, through a Certified Development Company (CDC) provides up to
    35% of total project cost in a second lien position.  This loan can range from $300,000 to $2,000,000.

Terms and Interest Rates

  • First Mortgage - up to 25-year term on your purchase with fixed and variable interest rates available.
  • Second Mortgage - up to 20-year term for real estate.  Fixed rate is determined at SBA guaranteed 504 debenture sale  
  • Fees also include customary closing costs, such as appraisal & environmental report, construction loan fees (if applicable), and bridge loans.

Bed and Breakfast Loan Eligibility

Eligibility, pricing and loan programs boil down to the following:

  • Management Experience
  • Cash Flow Coverage
  • Equity Injection (cash down)
  • Location of prospective B & B
  • Personal Credit Score
  • Total amount financed
  • SBA or non-SBA loan

Get real answers now on your B & B mortgage by taking a few minutes to fill out the commercial loan application.  Or feel free to call to discuss your potential Bed and Breakfast Loan. 

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