Say you have spent a few weekends looking at a 52-room flagged motel off I-4, somewhere between Orlando and Kissimmee. The seller wants $3.9 million, the occupancy looks steady, and the broker keeps telling you there is another buyer.
You have enough cash for a down payment, but not enough to pay for the property outright, so the SBA loan is the plan. The question is what you actually have to do, and in what order, to get from “I like this property” to “the keys are mine.”
That question matters more in Florida than in most states, because the competition for decent hotels here is real. Visit Florida reported about 143.3 million visitors to the state in 2025, which was a new record, and hotels sold slightly more rooms in the first quarter of 2026 than in the same quarter a year earlier.
Sellers know this, and they tend to favor buyers whose financing looks organized. The steps below follow the order a hotel purchase usually moves in, so you can see where each piece fits before the clock starts.
Step 1: Check That the Deal Fits the Program, Then Find a Lender That Does Hotels
Before you collect a single document, confirm that the deal fits inside an SBA 7(a) loan at all. The SBA states that the maximum loan amount for a 7(a) loan is $5 million, and you apply through a lender, not through the SBA itself. The SBA guarantees 75% of the loan for 7(a) loans over $150,000, which is the reason a bank is willing to lend against a hotel with only a 10% minimum down payment.
If your total project cost (purchase price, renovation, closing costs, and working capital) pushes the loan past $5 million, you are probably looking at an SBA 504 loan or a conventional loan instead, and it is better to know that in week one than in week six.
The second half of this step is the one first-time hotel buyers skip. Not every SBA lender wants hospitality, and some banks that are happy to fund a dental practice will decline a motel without saying much about why. Hotels need a lender that understands franchise agreements, renovation obligations, and seasonal revenue, and that has a credit committee that has said yes to hotels recently.
This is where a lender-matching service can save weeks: 7aSavvy is an SBA 7(a) loan broker that matches Florida borrowers with lenders that fund SBA 7(a) loans in Florida for business and real estate purchases (hotels included) in the $500,000 to $5,000,000 range, connects them with a decision-maker at Vice President level or higher inside that lender, and stays on the file until closing, matching the borrower with another lender if the first one does not work out.
The broker is paid by the lender when the loan funds, so the borrower does not pay a fee for the match. Whichever route you take, the goal for Step 1 is the same: get your deal in front of a lender that already finances hotels, rather than sending your application everywhere like confetti and hoping one of them bites.
Step 2: Gather the Hotel’s Operating History
A hotel is an operating business that happens to sit on real estate, and lenders underwrite the business first. Before your lender issues a term sheet, it will want to see how the property has actually performed. Ask the seller for these early, ideally as a condition of your letter of intent:
- Three years of business tax returns and profit and loss statements for the hotel, plus a current year-to-date statement.
- The STR report, if the property has one. An STR report is a benchmarking report that compares the hotel’s occupancy, average daily rate, and revenue per available room against a set of nearby competing hotels.
- Monthly revenue figures as well as the annual totals, because a lender looking at a Florida hotel will want to see how deep the slow months go.
Three terms come up constantly here, so it helps to know them. Occupancy is the percentage of available rooms that were sold. Average daily rate (ADR) is the average price paid per sold room. Revenue per available room (RevPAR) is total room revenue divided by all available rooms, sold or not, which makes it the single number lenders lean on most when they compare one hotel against another.
If the seller is slow to hand over the numbers, that is information too. A hotel with messy books is not automatically a bad deal, but it will take longer to finance and the lender will ask more questions.
Step 3: Get the Franchisor Involved Early
If the hotel carries a brand flag (a franchise affiliation with a national hotel brand), the franchisor is effectively a third party to your loan. Two things come out of that relationship that your lender will need.
The first is the property improvement plan, usually called a PIP. A PIP is the list of renovations the brand requires a new owner to complete, often within a set period after the sale, to keep the flag. It can include new carpet and furniture in every room, lobby work, signage or a full bathroom renovation. The cost of the PIP has to be paid somewhere, and lenders usually want to see it either built into the loan or covered by cash you set aside.
The second is the franchise approval, which often comes with a comfort letter (a letter from the franchisor to the lender confirming the franchise will stay in place if the lender has to step in). The franchise brand also has to be eligible for SBA financing. The SBA reinstated its franchise directory in 2025, so your lender will check whether the brand is listed before it goes much further.
None of this happens quickly. Franchisor approvals and PIP inspections can take weeks, so it makes sense to start the conversation with the brand as soon as you have an accepted offer.
Step 4: Put Together Your Own Financial Package
While the seller and franchisor are doing their parts, you will be assembling yours. The table below is a typical starting checklist for a hotel acquisition; your lender may ask for more.
| Document | What it shows the lender |
|---|---|
| SBA Form 1919 (Borrower Information Form) | Who owns the borrowing company and basic eligibility questions |
| SBA Form 413 (Personal Financial Statement) | Your assets, debts and cash available for the down payment |
| Personal tax returns (usually three years) | Your income history and other obligations |
| Proof of equity injection | Bank statements showing where the down payment is coming from |
| Resume or management plan | Your hotel experience, or the experienced manager you will hire |
| Purchase agreement and letter of intent | The price, the terms and what is included in the sale |
| Business plan with projections | How you expect the hotel to perform after the purchase, including the PIP |
Two items on that list deserve extra attention. On equity, the SBA rules that took effect in June 2025 require a minimum 10% equity injection on a change of ownership, and a seller note can cover no more than half of that injection and must stay on full standby (no payments) for the life of the loan. In practice, many hotel lenders ask for more than 10% down, so plan for that possibility. On experience, lenders want to know who will run the property day to day. If you have never operated a hotel, naming an experienced general manager or a management company in your plan can make a real difference to how the lender reads the file.
Ownership and eligibility rules for SBA loans have also changed more than once in the last two years, including rules about who can own the borrowing business. Ask your lender to confirm the current requirements for every owner before you spend money on reports.
Step 5: Underwriting and Approval
Once your lender has the full package, the underwriter writes a credit memo and decides whether the loan works. The main test is debt service coverage. The debt service coverage ratio (DSCR) is the hotel’s net operating cash flow divided by its annual loan payments; a DSCR of 1.25, for example, means the hotel earns $1.25 for every $1.00 of debt payment.
Lenders apply their own minimums, and hotels are often held to a stricter standard than steadier businesses because revenue can swing with the season and with the weather.
How the approval happens depends on the lender. An SBA Preferred Lender (a lender in the SBA’s Preferred Lenders Program) has been given authority by the SBA to approve 7(a) loans itself, without sending each file to the SBA for review, which usually shortens the timeline. Lenders without that status submit the loan to the SBA for a decision.
Expect pricing to be based on the prime rate, usually somewhere between prime plus 1 and prime plus 3, with a term of up to 25 years when real estate is part of the deal. Loans of 15 years or longer also carry an SBA prepayment penalty during the first three years (5%, then 3%, then 1%), which matters if you plan to refinance or sell early.
Step 6: Third-Party Reports and Florida-Specific Checks
After approval, the lender orders the reports it needs to close. For a hotel, these usually include an appraisal of the property and the business as a going concern, an environmental review of the site and, for a flagged property, confirmation of the PIP scope and cost. You will usually pay for these reports, so it is sensible to hold off ordering them until the lender has issued its approval or commitment.
Florida adds a few items that buyers from other states sometimes miss:
- Insurance. Coastal and wind-exposed properties can carry high property, windstorm, and flood insurance costs, and the lender will include those premiums in its cash-flow analysis. Get real insurance quotes early rather than using the seller’s old figures.
- State taxes at closing. Florida charges documentary stamp tax on deeds, notes, and mortgages, and a separate intangible tax on mortgages, so your closing costs will be higher than the same purchase in many other states. Ask your closing attorney or title company for an estimate.
- The lodging license. The Florida Division of Hotels and Restaurants requires a new owner to hold a license before beginning operation. A change of ownership does not always need a new inspection if the previous owner had a satisfactory inspection within 120 days, but the license application itself should be filed ahead of your closing date.
Step 7: Closing and the First Months
The standard SBA 7(a) process typically runs 45 to 90 days from application to closing, and hotel deals with a franchisor approval and a PIP tend to sit toward the longer end of that range. At closing, you will sign the loan documents and a full personal guarantee (every owner of 20% or more personally guarantees the loan), the down payment and closing costs are wired, and the PIP funds are usually held back and released as the renovation work is completed.
The first months after closing are when the PIP work begins, and that work has to be scheduled around guests. Many owners plan the noisiest renovation for the slowest season, which in much of Florida means the late summer and early fall. Your lender will also expect regular financial reporting, so it is worth setting up clean bookkeeping from the first day rather than inheriting the seller’s system.
If there is one lesson in all of this, it is that the order matters. A Florida hotel purchase falls apart less often over price than over timing: a franchisor that has not approved the transfer, an insurance quote that arrives late, or a lender that was never comfortable with hotels in the first place. Line those pieces up early, and the SBA loan becomes the routine part of the deal.
