Hotel Property Loans from 6.80% - 9.50%

In our experience, the amount you can borrow for a hotel property loan depends heavily on the ownership structure, whether gaming is involved, and your track record as an operator. For freehold hotels with gaming, we typically see lenders offer up to 65% of the purchase price. Freehold properties without gaming can generally access about 50% LVR. Where we often find the best outcomes is with leasehold hotels with gaming, which can achieve up to 70% based on a going concern valuation conducted by a bank-instructed valuer.

With our access to 60+ lenders, we can help clients secure hotel finance ranging from $500,000 to well over $50 million. If you have a guarantor willing to support your application, we’ve arranged deals where clients have borrowed up to 100% of the purchase price.

We find most hotel property loans require a deposit of 30% – 50%, though this varies significantly based on your circumstances. For freehold hotels with gaming, we typically advise clients to budget at least 35% deposit. Freehold pubs without gaming usually require 50% or more in our experience. Leasehold hotels with gaming generally need around 30% deposit.

These requirements are higher than standard commercial property because, frankly, hospitality businesses are considered specialised assets that require experienced management to succeed. Your deposit can come from cash savings, equity in other properties, or through a guarantor arrangement.

We always recommend having additional funds available for stamp duty, legal fees, and working capital—in most cases we see clients underestimate these costs initially.

Hotel property loan interest rates currently range from 6.80% – 9.50%, though we’ve secured rates at both ends of this spectrum depending on the deal. In our experience, rates are influenced by your operator experience, the property’s trading history, ownership structure, and whether gaming is involved.

We consistently find that properties with strong net gaming takings and experienced publicans attract more competitive rates (sometimes significantly below the headline figures). One thing we’ve noticed is that the difference between lenders can be substantial, which is why comparing options from our panel of 60+ lenders often uncovers savings clients wouldn’t find approaching banks directly.

From what we see, lenders prefer applicants with at least three years’ experience as a successful publican if you plan to manage the hotel yourself.

However, we’ve found experience requirements vary considerably between lenders. Some non-bank lenders we work with will consider applicants with one to three years’ hospitality experience, while private capital providers often assess newer operators on a case-by-case basis. In our experience, transferable skills from related industries such as restaurant management, hospitality operations, or licensed venue management can genuinely strengthen your application.

We’ve helped many first-time publicans secure hotel property loans by presenting their experience and business plans effectively to the right lenders – it’s often about matching you with a lender whose appetite fits your profile. We also recommend joining the Australian Hotels Association for training, industry benchmarks, and networking opportunities that can bolster your application.

This is something we discuss with clients regularly, as each structure has quite different implications. Freehold hotel finance involves purchasing both the property and the business, giving you complete ownership of the real estate and operations. Leasehold hotel finance covers purchasing the business while leasing the premises from a landlord.

In our experience, each structure attracts different lending criteria and LVR limits. Freehold with gaming typically achieves up to 65% LVR, while leasehold with gaming can access up to 70% based on going concern valuation. We often find leasehold arrangements offer higher yields on investment since you’re not outlaying capital for the property itself, but you’ll need to carefully consider lease terms, rent reviews, and options remaining.

Both structures have distinct tax implications and exit strategies, so we always recommend discussing these with your accountant before proceeding. Learn more about commercial property purchase loans to understand your options.

Hotel property loans are assessed quite differently from standard commercial mortgages, and this catches some clients off guard. In our experience, lenders typically require a serviceability ratio of 1.5 to 2 times the proposed interest expenses, meaning your income must cover loan repayments by that margin.

We find the key metrics lenders focus on include net gaming takings, total revenue, gross margins, EBITDA, wages as a percentage of turnover, and overall financial performance. For leasehold properties, lenders also consider the lessee’s interest value through going concern valuations. What we consistently see is that banks want to examine trading history (preferably three or more years), revenue breakdown across gaming, bar, food, and accommodation, and the venue’s competitive position.

Having a comprehensive business plan with realistic forecasts significantly strengthens your application—this is something we prepare at no additional cost. Our commercial property borrowing calculator can help you estimate your potential borrowing capacity.

Yes absolutely. Motel finance and management rights finance are areas we specialise in. Motels typically qualify for up to 70% LVR based on going concern valuations, similar to leasehold hotels. Management rights finance is structured differently, and we find it’s often split into a residential mortgage for the manager’s unit (up to 80% LVR) and a commercial loan for the business goodwill component (around 60-65% LVR).

Overall, we typically see management rights lending allow up to 70% of the total purchase price. What we’ve noticed is that lenders assess factors including the letting pool composition, remaining term of management agreements, and your experience in accommodation management quite carefully. We also arrange caravan park finance and serviced apartment loans through our network of 60+ specialist lenders.

According to Tourism Accommodation Australia, the accommodation sector continues to show strong growth potential, which has kept lender appetite healthy.

Hotel property loans require comprehensive security arrangements, and we always ensure clients understand these obligations upfront. Standard requirements we see include a mortgage over the hotel property (or lease assignment for leasehold), a registered fixed or floating charge over business assets, directors’ guarantees, and a specific charge over the liquor licence.

For hotels with gaming, lenders also require security over gaming machine entitlements where state legislation permits. In our experience, a deed of consent between lessor, lessee, and the bank is required for leasehold properties. Personal guarantees from all directors are standard across the board, and some lenders may seek additional residential property as security to reduce risk (though we’ve negotiated around this requirement in certain situations). Before proceeding, we always recommend obtaining independent legal and financial advice to understand your obligations fully.

The Queensland Office of Liquor and Gaming Regulation provides useful guidance on licensing requirements that affect security arrangements. If you’re looking to restructure existing hotel finance, learn more about commercial property refinancing.