Hotels

SBA 504 hotel loans

An SBA 504 hotel loan is a two-lender structure for owner-operated hotels: a bank funds the first lien, a Certified Development Company (CDC) funds a long-term, fixed-rate second lien backed by an SBA-backed debenture, and the borrower contributes equity. The fixed-rate second lien is what makes 504 cheaper than most conventional hotel debt.

Get loan optionsSize my loan

Key facts

Figures as of 2026-10-31. Program rules change by notice, so an advisor confirms current terms with lenders before you rely on any figure.

Key facts with sources and as-of dates
ItemFigureSource and date
Bank first lienAbout 50% of project costSBA SOP 50 10 (confirm the revision in effect at application); as of 2026-10-31
CDC debentureAbout 35% of project cost; 25-year fixedSBA SOP 50 10 (confirm the revision in effect at application); as of 2026-10-31
Borrower equity (hotel is special-purpose)15% base; +5% for start-ups or new constructionSBA SOP 50 10 (confirm the revision in effect at application); as of 2026-10-31
CDC debenture cap$5M standard; $5.5M for qualifying energy-efficiency projectsSBA SOP 50 10 (confirm the revision in effect at application); as of 2026-10-31
Minimum DSCR1.25xSBA SOP 50 10 (confirm the revision in effect at application); as of 2026-10-31
Upfront debenture fees (financed)2.15%Corin sizing estimate; as of 2026-10-31
Ongoing debenture fees (bundled in rate)1.09%Corin sizing estimate; as of 2026-10-31
Typical close45–75 days after a complete fileSBA SOP 50 10 (confirm the revision in effect at application); as of 2026-10-31

How the 504 stack is built

The project cost, including acquisition, renovation, closing costs and eligible soft costs, is funded by three layers: the bank's first lien, the CDC debenture and the borrower's equity. The debenture rate is set when the debenture is sold, and the fixed rate then runs for the full term.

Corin arranges the stack as a licensed broker. We introduce the bank and CDC, size each layer and coordinate the file; the lenders make every credit decision and fund at closing.

What a hotel needs to qualify

Hotels are special-purpose property, so equity is higher and lenders weight franchise standing, property condition and the operator's record. The borrower must operate the hotel (through an eligible operating company) and sign personal guaranties from principal owners.

  • Owner-operated hotel; a passive investor structure usually does not fit
  • Franchise in good standing, and a property improvement plan (PIP) scoped and budgeted if one is open
  • Cash flow supporting at least 1.25x on the combined debt
  • Personal guaranties from the principal owners

Frequently asked questions

How much equity does an SBA 504 hotel loan need?

The base is 10%, plus 5% because a hotel is special-purpose property, so 15% in the base case. Start-ups and new construction add another 5%. Confirm the current rules against SBA SOP 50 10.

What is the maximum SBA 504 loan for a hotel?

The CDC debenture is capped at $5M ($5.5M for qualifying energy-efficiency projects). The bank first lien comes on top of that, so total project size can be much larger. A 7(a) + 504 stack can raise SBA exposure further.

Can I use 504 to finance a PIP?

Yes. Eligible renovation costs, including a franchise PIP, can be included in project cost when scoped and budgeted at application.

How long does an SBA 504 loan take?

Typical range is 45–75 days. Timelines are typical ranges after a complete file and are subject to lender approval, appraisal, title, and diligence. They are not guaranteed.

Related programs

Talk through your deal with an advisor

Send the basics and a licensed Corin advisor reviews which programs and lenders may fit, or size the loan yourself first.

Get loan optionsSize my loan