Hospitality financing that underwrites the operator, not just the building.
Hotels are an operating business wrapped in real estate — and most banks underwrite them like any other commercial asset, then decline. We know the lenders who price hospitality based on RevPAR, flag, operator track record, and PIP cycle. Limited-service, full-service, boutique, motel — we've placed all of them.
Hotels are operating businesses wrapped in real estate. Most banks decline because their commercial desk underwrites the building as if it were retail or industrial — ignoring RevPAR, ADR, occupancy seasonality, flag quality, PIP cycle, and operator track record. Even when they say yes, the term sheet doesn't reserve for PIP, so two years later you're scrambling for capex financing while the flag threatens disenrollment. Independent boutique operators get the worst of it — written off entirely by the general commercial desk. We've placed flagged, branded, boutique, and motel files across 15+ hospitality-active lenders who actually price by RevPAR + flag + operator history, not just LTV.
Five financing structures for hospitality assets.
Hospitality is operating-business-as-real-estate. We structure for the operator track record, the flag (or lack of one), the renovation cycle, and the seasonal cashflow profile.
Limited-Service Acquisition
Hampton, Holiday Inn Express, Best Western, Comfort Inn, Days Inn. 50–65% LTV, A-bank or specialized hospitality lender.
Full-Service Acquisition
Marriott, Hilton, IHG flagged full-service. 50–60% LTV. Specialized lender list. Operator track record critical.
PIP / Renovation Financing
Property Improvement Plan capex required by flag. We layer a PIP envelope into your mortgage or as a parallel facility.
Bridge / Reposition
Conversion (motel → boutique), flag-change, post-COVID recovery. 50–65% LTV bridge with refinance into stabilized term.
Refinance / Recapitalization
Pull equity from stabilized hotels at lower rate or extend term. Common after a strong RevPAR year or flag renewal.
Hospitality asset profiles we finance.
Flag matters more than market. A flagged limited-service in a secondary city often prices better than an independent boutique in downtown Toronto. We map both for you.
Why sponsors choose Mortgage Squad Advisors.
From operator package to funded — three to five months.
Hospitality underwriting is the most extensive commercial workflow we run. Expect more diligence than any other asset class — but with the right operator package, the deal will close.
Operator + asset intake
Operator track record, STR / hotel data, T12, flag agreement, PIP schedule. We assess RevPAR, ADR, occupancy trends.
Lender shortlist
3-4 hospitality-active lenders sized for your flag and operator. Indicative pricing in 10-15 days.
Operator due diligence
Background, prior properties, references, financial capacity. Hospitality lenders underwrite operators as much as buildings.
Conditions
Appraisal (specialized hospitality appraiser), franchise comfort letter (if flagged), PIP envelope, environmental, structural.
Funding
Lawyer closes. PIP funds typically held by the lender and disbursed against approved invoices over 12-24 months.
Hospitality requires a lender who actually does hospitality.
Most generalist commercial banks decline hospitality. The 15 lenders in Canada who actually price hospitality competitively are a closed network — and we have relationships with most of them.
“We were acquiring a 124-key Holiday Inn Express in Niagara that needed a $2.4M PIP within 18 months. Three banks said they couldn't structure the PIP envelope. Mortgage Squad Advisors placed the acquisition + PIP as a single facility at 62% LTV with the PIP funds held in escrow. We closed in 16 weeks and finished the renovation 4 months ahead of schedule.”
Hotel · Hospitality across major Canadian markets
We place commercial files coast to coast. Pick your market for local context and start a pre-qualification with your deal in mind.
Don’t see your city? Browse all Canadian markets — commercial coverage is national.
Why are hotels harder to finance than other commercial?
What LTV can I get on a hotel?
What's a PIP and how do I finance it?
Will lenders finance independent boutique hotels?
What about motels — will lenders touch them?
Do hospitality lenders require franchise comfort letters?
What's the typical hotel mortgage rate?
What documents will I need?
Editorial commitment
This hotel · hospitality page is an editorial profile written from our brokerage’s perspective by Mortgage Squad Advisors Editorial Team · Licensed Mortgage Advisors · Reviewed under the Principal Broker. We receive no compensation from any specific lender for this content. On most commercial files the lender pays our placement fee; we disclose compensation in writing on every deal. Program details and rates are reviewed quarterly; last reviewed May 13, 2026.