Loan for Hotel Business

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The hotel industry contributes significantly to the fiscal growth of the Indian economy. Similar to every business requirement, this industry also needs cash to meet the business’s daily needs and move on. The availing commercial is the best way for most of the hotel proprietor who looks for running their business. We help these entrepreneurs to get the loan amount with a minimum interest rate tailored to their needs to sustain in the hotel business. With a large number of players in the market, borrowers have the liberty to choose one based on their need. They can decide the lender based on the mode of the loan process, duration, schedule and payment method with utmost comfort.

Hotel loan in India without any guarantee

The guarantee that the borrower has to meet with regard to the amount of the loan is repeatedly the chief obstacle for many specially leased hotel companies. We will arrange for a loan in India to help you start or expand your hotel business but without any collateral. Also, we will process your loan request as soon as possible. With our research in the market, we know the specific business need of this industry and can assure you that our loan amount which will meet the exact business requirements of your hotel.

Our financing purpose is to provide you with capital for the construction, renovation, furnishing, and purchase of hotels. Since most hotels require substantial capital to set up, grow and improve, most hotel companies prefer accessing hotel finance with the help of an external investing resource, small loans and sometimes both.

Actually speaking, it is difficult to overemphasize the significance of funding in this business. Certainly, this business small or big will yield returns but requires investment, in the beginning, to keep the ball rolling. In addition, a very profitable hotel needs a lot of funds to refurbish or extend its premises.

Fortunately, the financing model has changed dramatically in recent years: hotel developers are finding several channels to apply for a loan. No longer bank is the only rescuing source for hotel developers. This change is particularly glad news for entrepreneurs who cannot meet the stringent criteria that banks demand the borrowers for offering the loan. 

Tips for financing hotels for a hotel credit

WTTC – World Travel and Tourism Council has announced India as the seventh country with a GDP that accounts for a significant proportion in the tourism and travel sector. This input has an unswerving impact on the hotel industry, and the need for hotel rooms is rising by 6% annually. Alternatively, there is only a 3% increase in supply annually.

DIPP – Department of Industrial Policy and Promotion has reported that the tourism and hotel industry in India has received a foreign direct investment of $ 10.90 bn in 7 years from 2000 to 2017.

The hotel sector witnessed a substantial growth resulting in the augment in hotel credit in India. Loan payers in India provide funding specifically for those who wish to build or purchase a new hotel. They also offer the required financing and at attractive conditions. 

Tips to borrowers to avail loan for hotel business 

  • Market Testing 

The borrowers must ensure before acquiring a hotel that it belongs to a market with a high demand that can contribute to the good functioning of the hotel.

For instance, India has many tourist destinations where the demand for hotels is constantly increasing. 

When you buy a hotel in such areas, then you can automatically make a profit. But that does not rule out the competition. They are indeed heavier when compared to the usual locations. You need to invest more in such places but provide service at a competitive tariff to attract customers. 

  • Check your loan tenure 

The term of the loan directly impacts on the rate of interest. A long-term loan will be associated with a lesser rate of interest and vice versa.

You must also ensure that the repayment term is equal to the annual or monthly turnover of your hotel business. A company should not encounter financial barriers that make the return of the loan sum trouble.

  • Prepare a solid business plan.

This is an important basis for obtaining credit for your hotel business. The financing approval rate has a better chance for approval if your plan is a feasible one. 

We suggest the following to help you make a reasonable business plan

  1. Latest financial situation
  2. Financial projections for the future 
  3. Documents presented after the survey
  4. Documents confirming that the facilities comply with all customary guidelines.

If you meet the conditions mentioned above, then the lender can easily sanction the commercial loan.

  • Provide the required documents

In addition to all the business documents, the borrowers must also make sure to supply the other documents necessary to obtain credit for the hotel trade in India. 

Those documents include KYC details, proof of address, tax returns, verified transactions of existing companies, bank statements.

  • Maintain a good credit rating

Financiers emphasize on clients to have a minimum credit rating of 750 to apply for hotel business loan. If you opt for an unsecured loan, then this credit rating is obligatory.

  • PNW – Personal Net Worth 

A borrower is more likely to get credit for a hotel company in India if he has enough personal assets.

Providing proof for the PNW can confirm the repayment ability of the borrowers. Few lenders expect the PNW to be equal to or greater than the loan amount. 

By following these tips, you can get credit for the hotel business in India. If you are already a client for any financing agency, then you are even more likely to get approval. In addition, they can access pre-approved FlexiLoans offers through connected NBFCs.

Application criteria and documents 

Whether you own a large company or running a small business but want to obtain a commercial loan, we are here to serve you. Competitive interest rates and door-to-door services are the key features of private funding agencies. 

Required documents

  • ID Proof – Aadhar card / voter identity / PAN card / driver’s license / passport
  • Address Proof – last electricity bill/passport/ ration card
  • Income Proof – Salary details and bank statement for the last 6 months and form 16 for the recent financial year)
  • All rental documents – whichever applicable

Eligibility criteria

  • The minimum and maximum age of the borrower must be 21 and 65 respectively.
  • Self-employed workers who complete the tax returns process can apply

How does FlexiLoans differ in offering a business loan for hotel business 

  • The lender provides commercial loans on flexible terms. As a result, you can adjust the loan amount to meet the exact requirements.
  • The lender offers borrowers the opportunity to adjust their EMI payments.
  • A guarantee is not required in any form to use this loan.
  • The application procedure is simple and quick.
  • The funds can be used for operational cost and business expansion.
  • Avail maximum of 1 crore funding in 48 hours from the time of submitting an application to start your hotel business in more than 100 cities in India
  • Easy online process without paperwork.