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Loan Program Details

Permanent Loans

Eligible Collateral Stabilized hotel with a track record (at least 6 months performance history), occupancy over 59%
Loan Purpose Acquisition, refinancing, or asset repositioning
Loan Amount $3 million to $20 million per asset
Loan-to-Value (LTV) Loans up to 80% of appraised value (proceeds typically max at 75% loan-to-value/LTV); mezzanine financing layer possible
Interest Rate Fixed or floating
Term 3 to 10 years
Amortization Up to 25 years
Prepayment Provision Options include no pre-pay fee, yield maintenance, declining percentage, or defeasance (depends on loan program)
Debt Service Coverage Typically 1.40X minimum

Construction Loans

Eligible Collateral Development of new hotel properties or additions to existing facilities
Loan Purpose Construction-only or construction/mini-perm forward commitment
Loan Amount $3 million to $20 million
Loan-to-Value (LTV) Up to 75% of total project costs or 75% LTV of stabilized appraised value, whichever is lower
Interest Rate Fixed rates are indexed to like-term Treasury or Swap rates and floating rates tied to LIBOR or Prime rate
Term 3 to 5 years
Amortization Interest-only during construction term, 20-25-year amortization during mini-perm term
Prepayment Provision Options include no pre-pay fee, yield maintenance, or declining percentage (depends on loan program)
Debt Service Coverage Typically 1.15X year, 1.25X year 2, and 1.40X year 3 of mini-perm term
Experience Borrowers should have a strong financial position, hospitality track record, and development experience

Bridge Loans

Eligible Collateral Value-added hotel repositioning opportunity
Loan Purpose Acquisition, refinancing, conversion, or renovation
Loan Amount $3 million to $20 million
Loan-to-Value (LTV) Up to 75% of total costs or 75% of appraised value
Interest Rate Fixed rates are indexed to like-term Treasury or Swap rates and floating rates tied to LIBOR or Prime rate
Term 3 to 5 years
Amortization Interest-only or 25-year amortization
Prepayment Provision Options include no pre-pay fee or declining percentage (depends on loan program)
Debt Service Coverage 1.40X at stabilization
Experience Borrowers should have a strong financial position, hospitality track record, and experience with like value-added projects

Rates, Terms & Conditions Driven By:

  • Sponsor Financial Strength and Hotel Experience
  • Operating Performance vs. Competitive Set (Smith Travel Research Report)
  • Net Operating Income
  • Brand/Flag
  • Loan-to-Value (LTV), Loan-to-Cost (LTC)
  • Debt Service Coverage Ratio (DSCR)
  • Location/Market
  • Capital Markets (i.e. current lender appetite for hospitality)
Hampton Inn Photo
I am a first time user of the conduit market for the financing of hotels.  I wish to add my voice to the many that have already extolled the virtues of using Larkin Hospitality Finance in expediting the loan approval process.  Cameron Larkin was extremely professional and diligent in his efforts to obtain the best deal for me.  I had a hotel that only had six months operating experience in a highly competitive market, yet he was able to lock in an extremely favorable rate in today's environment.  I would recommend Larkin Hospitality Finance to anyone needing loan services. - John Ferguson - President, Ferguson Properties, Inc.