Intro — What you need to know

When you apply for hotel finance in the UK, lenders run a sector-specific assessment. Hospitality is seasonal and asset-heavy, so underwriters want to see credible trading figures, experienced management, realistic forecasts and appropriate security. For refurbishment or acquisition projects, they’ll want detailed quotes, contractor schedules and valuations that support the requested loan size.

If you want a quick, no-obligation view of eligibility and suitable lender types, complete a short enquiry — Get Quote Now — and we’ll match your business to specialist brokers and lenders.

At a glance: Quick eligibility checklist

• Business structure: Limited company or LLP preferred (company registration and accounts).
• Trading history: Generally 6–24 months; 2+ years preferred by mainstream lenders.
• Turnover & profit: Varies by lender — many specialist lenders accept lower turnovers.
• Credit: Business and director credit records reviewed; disclose issues early.
• Security: Commercial property, fixed assets or personal guarantees commonly required.
• Valuation & location: Freehold usually easier to underwrite than leasehold; location affects LTV.
• Licences & compliance: Planning, food/hygiene, alcohol and fire safety documents needed.
• Purpose & evidence: Detailed project plan, quotes, projected occupancy and ADR assumptions.

Free Eligibility Check — takes two minutes and does not affect your credit score.

Detailed eligibility factors lenders check

Business structure & legal status

Lenders prefer incorporated entities (private limited companies, LLPs) because accounts and liabilities are clearer. If the business is part of a group, lenders will assess group accounts, intercompany loans and covenant arrangements. For start-ups or acquisitions, directors’ experience and personal guarantees often become crucial to secure funding.

Trading history & management experience

Mainstream banks commonly expect two or more years’ trading history. Specialist hospitality lenders may consider businesses with 6–12 months trading if the operator(s) have proven hotel experience and the business plan is strong. Demonstrable management track record reduces perceived operational risk.

Financial performance — turnover, profit & cashflow

Lenders look for sustainable turnover levels and clear cashflow. Key metrics include gross margin, EBITDA, seasonal peaks and troughs, and occupancy/ADR trends. Typical requirements:

• Minimum turnover: varies by lender — some specialist lenders start from ~£200k, mainstream lenders prefer higher.
• Debt service cover: lenders test ability to meet interest and repayment obligations from projected cashflow.
• Management accounts & forecasts: recent management accounts and 12–24 month cashflow forecasts are essential.

Credit history (business & director(s))

Underwriters review business credit and director credit files. “Imperfect” credit (late filings, CCJs, previous insolvency) is not an automatic bar — specialist lenders and brokers can often help — but it affects pricing and may require more security or a larger equity injection. Always disclose credit issues early; hidden problems slow applications.

Security & collateral

Common security structures for hotel finance:

• Commercial mortgage against freehold property.
• Leasehold lending with lender consent from freeholder and lease analysis.
• Debentures or fixed charges over business assets and receivables.
• Personal guarantees from directors where needed.

Typical loan-to-value (LTV) ranges depend on property, covenant and lender type — expect lower LTVs for hotels than for standard commercial offices unless the operator is established.

Purpose of funds & project evidence

Lenders want to know exactly why you need funds: refurbishment, acquisition, fit-out, working capital, or refinance. For capital projects provide contractor quotes, timelines, schedules, and market evidence (expected uplift in occupancy/ADR). For working capital, demonstrate seasonality and invoice/booking patterns.

Valuation, location & property type

Valuations assess future revenue potential as well as bricks-and-mortar. Freehold hotels in tourist or well-performing urban locations tend to secure better terms. Leasehold properties, conversions (e.g. houses-of-multiple-occupancy repurposed as hotels) or short-stay/serviced-apartment models can raise lender caution — specialist lenders are often the best fit in these cases.

Regulatory, licences & safety compliance

Lenders will check that planning is in order and that the business holds relevant licences (food hygiene, alcohol, HMO where applicable) and fire safety certificates. Any unresolved enforcement or planning issues must be disclosed and resolved to avoid delays.

Other lender-specific factors

Expect additional checks for franchise agreements, operator/management contracts, environmental performance (EPC, energy costs) and brand covenants. ESG and sustainability credentials are increasingly considered by some lenders when assessing long-term viability.

Typical lender types & which eligibility they favour

Not sure which lender fits your hotel? Get Quote Now and we’ll match you to the most suitable options.

Documents you’ll need for a fast decision

• Company registration & ownership details
• Management accounts (last 6–12 months) and statutory accounts (last 2–3 years if available)
• VAT returns and recent bank statements
• Business plan with occupancy, ADR and cashflow forecasts
• Property title, lease (if leasehold) and recent valuation (if available)
• EPC, planning permissions, licences (food, alcohol), fire safety/insurance details
• Contractor quotes, schedule of works and cost breakdown for refurbishment
• Director ID and proof of address

Note: bridging or merchant finance can require less historic trading data but will usually ask for stronger security or a higher cost of funds.

How to improve your eligibility

Practical steps to strengthen an application:

• Prepare clear, conservative cashflow forecasts and show sensitivity to lower occupancy scenarios.
• Reduce discretionary director drawings in the months before application to improve net cashflow.
• Gather competitive contractor quotes and a phased schedule to reduce cost surprises.
• Consider an equity injection or lower LTV to access better rates and more lenders.
• Work with a specialist broker — they know which lenders accept specific hotel models (e.g. boutique, branded, leisure-focused).

Mini example: A regional 30-room hotel with 18 months’ trading and experienced management improved LTV by injecting 20% equity and secured a refurbishment facility within eight weeks via a specialist lender.

Costs, timescales & key risks

Typical costs to budget for:

• Interest rates: vary widely by lender, risk profile and security.
• Arrangement / facility fees: typically 1%–3% (sometimes higher for specialist/bridge deals).
• Valuation, legal and survey fees: pay as part of the transaction costs.
• Early repayment charges or exit fees on some products.

Typical timescales:

• Bridge/merchant funding: same day to a few days
• Asset & equipment finance: days to 2 weeks
• Commercial mortgage for hotels: 4–12 weeks (subject to valuation, legal and consent timelines)

Risk & disclosure: Applying for finance requires accurate disclosure. UK Business Loans is an introducer and does not provide lending or regulated financial advice. We connect your enquiry to lenders and brokers who may contact you. Submitting an enquiry does not affect your credit score. Our panel arranges finance from £10,000 and upwards.

How UK Business Loans helps

Our process is designed to be quick and low effort for hoteliers:

1. Complete a short enquiry form (business name, contact, approximate turnover, loan amount, purpose).
2. We match you to lenders and specialist brokers that understand hotel finance.
3. Receive a free eligibility check and contact from relevant partners with indicative terms.

Start now — Get Quote Now (it takes less than 2 minutes).

Learn more about sector-specific options on our hotels business loans page.

Frequently asked questions

What minimum turnover do hotel lenders require?

It depends. Specialist lenders and asset-based providers may accept lower turnovers (from around £200k), while mainstream banks generally favour higher turnovers — often £500k+. The right match depends on loan purpose, security and operator experience.

Can I get finance with poor credit?

Yes — some specialist lenders and brokers work with imperfect credit. Expect higher rates or additional security. Be transparent about past issues to enable proper matching.

Do I need to own the hotel property to borrow?

No. You can access finance as a leaseholder, or via asset finance and working capital products that don’t require property security. Owning the freehold generally provides more options and better pricing.

How long will an application take?

From hours (merchant/merchant cash advance) to several weeks for full commercial mortgages. Accurate documents and clear project plans speed the process.

Will submitting an enquiry affect my credit score?

No — a standard enquiry via our short form does not affect your credit score. Lenders may carry out checks later if you progress an application.

Still unsure? Get a Free Eligibility Check and we’ll advise which lender types fit your hotel and next steps.

Ready to check eligibility?

If you need funding for refurbishment, acquisition, working capital or refinance, complete our short form and get matched to lenders and brokers who specialise in hospitality finance. It’s free and no obligation. Start your Free Eligibility Check now.

Written by UK Business Loans — industry lead in hotel & hospitality finance introductions. Published: 29 October 2025. Last updated: 29 October 2025.

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