Can I refinance my hotel to lower my monthly payments or consolidate my debt?

Short answer: Yes — in many cases hotel owners can refinance to reduce monthly payments or consolidate multiple debts. Whether refinancing will deliver the savings you want depends on the property value (loan-to-value), trading performance (RevPAR, occupancy and EBITDA), existing loan terms (penalties and covenants) and the structure of your borrowing. Complete a quick, free eligibility check to see realistic options for your hotel.

Get Quote Now — quick, no-obligation enquiry to match you with specialist hotel lenders and brokers.

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Table of Contents

• Quick summary
• Why hotels refinance — common objectives
• Types of refinancing & solutions
• Will refinancing lower my monthly payments?
• Can I consolidate multiple hotel debts? Pros & cons
• Key eligibility factors lenders consider
• Costs, fees and timeframe
• How UK Business Loans can help
• Practical next steps
• FAQ
• Final notes & how to start

Quick summary: the short answer

Refinancing a hotel to lower monthly payments or consolidate debt is commonly possible for limited companies and established businesses with commercial property value and demonstrable trading performance. Typical routes include re-mortgaging the hotel, taking a commercial term loan to consolidate facilities, using bridging or mezzanine finance for short-term needs, or adding unsecured business loans for working capital. Each route has trade-offs: a longer term can reduce monthly costs but increases total interest; consolidating unsecured into secured debt reduces monthly cost but places the property at risk.

Free Eligibility Check — find out quickly what lenders may offer your hotel.

Why hotels refinance — common objectives

• Reduce monthly payments by securing a lower rate or extending the term.
• Consolidate several facilities (loans, overdrafts, HPs) into one easier payment.
• Release equity for refurbishment, expansion or rebranding.
• Improve short-term cashflow to manage seasonal volatility.
• Restructure debt to avoid covenant breaches or to change interest-only/capital repayment mix.

Example: a 40-room independent hotel extended its commercial mortgage term by five years and switched to a slightly lower rate, reducing monthly payments by around 18% while funding a refurbishment from released equity.

Types of refinancing and solutions available for hotels

Re-mortgaging the commercial property

Conventional commercial mortgages (high-street banks or specialist commercial lenders) refinance against the hotel as security. Lenders focus on property valuation, loan-to-value (LTV), income produced by the business (or rent if leased), occupancy and RevPAR. Typical loan sizes start from around £10,000 upwards — many hotel refinances are substantially larger due to property values.

Commercial term loans and business refinance

Term loans arranged to the business rather than secured only on property suit trading entities with solid EBITDA but limited freehold security. These loans can be used to consolidate short-term debt into a single repayment profile.

Asset finance and equipment loans

Used for FFE, kitchen equipment or other fixed assets — these don’t refinance existing mortgages but avoid touching property security while funding improvements that can increase income.

Bridging loans & mezzanine finance

Short-term bridging is useful for urgent cashflow or to pay early repayment charges on an outgoing facility while a longer refinance is arranged. Mezzanine finance can add growth capital when senior lenders won’t cover the full requirement, though cost is higher.

Debt consolidation loans

Combine multiple debts into one loan to simplify payments. Consolidation may reduce monthly outgoings but consider fees and whether unsecured debt becomes secured against the property.

Get Started — Free Eligibility Check

Will refinancing lower my monthly payments?

Lower monthly payments are achieved by one or more of the following:

• Lower interest rate — negotiating a better margin or switching product.
• Longer term — spreading capital repayment over more years reduces monthly instalments.
• Changing repayment type — moving from capital & interest to interest-only temporarily reduces monthly cost (but defers capital repayment).

Important trade-offs: longer terms usually increase the total interest paid over the life of the loan; interest-only reduces monthly cost but leaves capital outstanding; securing cheaper rates often requires better collateral or stronger trading history.

What lenders will check

• Historic and forecast trading performance (occupancy, RevPAR, seasonal trends)
• Accounts, management accounts and cashflow forecasts
• Valuation and LTV of the property
• Existing loan schedule and early repayment charges
• Director credit and business structure

Typical documents to prepare: last 2–3 years’ statutory accounts, recent management accounts, business plan/forecasts, latest valuation or rent schedule, details of existing borrowing.

Free Eligibility Check — see if a switch can lower your monthly payments.

Can I consolidate multiple hotel debts? Pros & cons

Consolidation can simplify your finance and often reduce the monthly cash outflow, but you should weigh the consequences.

Pros

• Single monthly payment — easier cashflow management
• Potential lower overall monthly cost
• Opportunity to renegotiate covenants and terms

Cons

• Early repayment charges on outgoing facilities can be high
• Securing unsecured or high-rate debt against property increases foreclosure risk
• Longer term may mean paying more interest overall

When consolidation makes sense: you have sustained trading, reasonable LTV and clear long-term benefit (e.g., freeing management time, reduced rates). When it might not: short-term cashflow hiccups where a bridge or seasonal overdraft is cheaper.

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Key eligibility factors — what affects approval and pricing

• Loan-to-value (LTV): lower LTV improves pricing and increases lender options.
• Trading performance: RevPAR, occupancy, ADR and EBITDA are central for lenders.
• Existing covenants & penalties: early repayment charges reduce net benefit of refinancing.
• Freehold vs leasehold: lease terms, ground rent and lease length matter.
• Location & size: room count, market, and local demand influence valuation.
• Management & operator agreements: franchised or managed hotels may be assessed differently.
• Director credit & company history: matters if limited guarantees are required.

If you’re unsure about likely valuation or LTV, specialist brokers in hospitality can obtain fast valuation estimates and match you to lenders who understand seasonal cashflow.

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Costs and fees to expect when refinancing

• Arrangement / facility fees (typically a percentage of the loan)
• Valuation and surveyor fees
• Legal fees (lender and borrower solicitor costs)
• Broker fees (if applicable)
• Early repayment charges on existing loans
• Costs for AML, company searches and credit checks

Timeframe: straightforward remortgages 6–12 weeks; complex or covenant-heavy deals longer. Bridging options can complete in days to weeks if speed is essential.

Example quick calculation: if refinancing reduces monthly payment by £3,000 but costs £18,000 in fees, the break-even is six months — after which you begin to enjoy net savings.

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How UK Business Loans can help

UK Business Loans does not lend. We introduce hotel owners to specialist lenders and brokers who understand hospitality finance. Our service saves time, increases the chance of receiving relevant offers, and is free and without obligation.

• Fast matching to lenders/brokers experienced in hotels
• Free, no-obligation quotes and eligibility checks
• Confidential and secure information sharing to only relevant partners

If you want targeted options for hospitality, see our dedicated hotels page for sector-specific guidance on lenders and products: hotels business loans.

Start Your Enquiry — Free Eligibility Check

Practical next steps — action plan for hotel owners

1. Gather documents: last 2–3 years accounts, latest management accounts, occupancy/RevPAR data, existing loan agreements.
2. Get a recent valuation or ask a broker for an estimate.
3. Complete the short enquiry form (it takes minutes) so we can match you to the right lenders — Get Quote Now.
4. Compare offers, check fees, early repayment charges and flexibility.
5. Discuss terms with the lender or broker and consider independent professional advice if needed.

Frequently Asked Questions (FAQ)

Can I refinance a hotel with poor credit?

Possibly. Specialist lenders may place more weight on asset value and trading performance than director credit, but weak credit can affect pricing and limit options. Complete a quick enquiry to see matched options.

How long does refinancing a hotel typically take?

From initial enquiry to completion usually 6–12 weeks for standard remortgages; complex, leasehold or covenant cases take longer. Bridging finance is faster for urgent needs.

Will refinancing affect my credit score?

Initial soft checks or an enquiry typically won’t impact credit. Lenders may perform full credit checks later which can be recorded. Ask your introducer or broker about the checks they will run.

Can I refinance a leasehold hotel?

Yes — but lenders will scrutinise the lease length, ground rent, tenant covenants and any service charges. Short leases may reduce borrowing capacity.

What if my hotel valuation is lower than expected?

A lower valuation reduces the amount you can refinance and may require additional security or a different product. Brokers can present alternative solutions such as mezzanine or investor funding where appropriate.

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Final notes, reassurance & compliance

Ready to explore your options? Complete our short enquiry for a free eligibility check and quick quotes from lenders and brokers who specialise in hotel finance. It’s no obligation and typically returns responses within hours.

Important: UK Business Loans is an introducer. We do not lend or provide regulated financial advice. We connect you with lenders and brokers who will provide offers subject to their eligibility checks and terms.

Start Your Free Eligibility Check

Written by: UK Business Loans content team | Date: [Insert publish date]

1. Can I refinance my hotel to lower my monthly payments or consolidate debt?
Yes — many hotel owners refinance via commercial remortgage, business term loan, bridging or mezzanine finance to lower monthly payments or consolidate debt, subject to property valuation, LTV, trading performance (RevPAR/occupancy) and existing loan penalties.

2. How can I consolidate multiple hotel debts into a single payment?
You can often consolidate multiple facilities into one commercial refinance or term loan, but weigh early repayment charges, potential new security on the property and the total interest over a longer term.

3. What do lenders check when assessing hotel refinancing eligibility?
Lenders typically review property valuation and LTV, historic and forecast trading performance (RevPAR, occupancy, EBITDA), lease terms or management agreements, existing covenants and director/company credit.

4. How long does hotel refinancing usually take from enquiry to completion?
Standard remortgages commonly take 6–12 weeks to complete, while complex leasehold or covenant-heavy deals can take longer and bridging finance can be arranged in days to weeks for urgent needs.

5. Will submitting an enquiry via UK Business Loans affect my credit score?
No — our free, no-obligation eligibility enquiry does not impact your credit score, although lenders may perform full credit checks later if you choose to proceed.

6. What fees and costs should I expect when refinancing a hotel?
Expect arrangement/facility fees, valuation and surveyor costs, legal fees, broker fees, AML/search charges and any early repayment penalties on outgoing facilities.

7. Can I refinance a leasehold hotel or a hotel with poor credit?
Yes — leasehold hotels can be refinanced though lenders will scrutinise lease length and ground rent, and specialist lenders may consider weaker director credit if asset value and trading performance are strong.

8. What documents should I prepare for a hotel refinancing eligibility check?
Prepare the last 2–3 years’ statutory accounts, recent management accounts, cashflow forecasts, occupancy/RevPAR data, a recent valuation or rent schedule and details of existing borrowing.

9. How does UK Business Loans help me find the right hotel refinance options?
UK Business Loans is a free introducer that matches your short, no-obligation enquiry to FCA-regulated lenders and brokers specialising in hotel finance to speed up relevant offers and comparisons.

10. Which types of finance can reduce monthly payments or fund hotel improvements?
Common options include commercial mortgages, business term loans, debt consolidation loans, bridging and mezzanine finance, plus asset/equipment finance for FFE or refurbishment, each with different costs and suitability.