The hotel industry is a sector that attracts investors and business buyers. Do you want to buy a hotel or renovate your establishment? It is then imperative to find the necessary funds since the costs of the work can quickly rise. Renovating a hotel and choosing a mortgage should not be taken lightly. We therefore present you with the solutions best suited to your requirements.
Create an Excel amortization table
Professionals in the hotel and restaurant sector must ensure that their financing is well understood. In fact, this involves the use of an Excel amortization table. This is a table that will show the investor the loan repayment schedules. It will thus provide a clearer vision of the status of the reimbursement.
The Excel amortization table will detail the amount to be repaid between capital and interest. You will find 4 columns:
● The amount of the monthly payment taken from your account every month;
● The interest repaid or the monthly cost of credit;
● The capital repaid;
● The remaining capital due to the bank.
Evaluate the maximum authorized debt ratio
As a general rule, the threshold of ratings Bank debt is 33%. This figure represents 1/3 of the income of the person applying for the loan.
In the context of a hotel, the maximum debt ratio is a rate used to assess the recurring inflows and outflows of money. It also serves as an index of real estate borrowing capacity. It should not exceed 33%, although in some cases the bank is quite flexible if the hotel investor proves that the expenses before the real estate transaction are above the debt threshold and that he can manage them without any problems!
Multiple projects to be financed with a mortgage
A hotel renovation project and therefore the fact of choosing a suitable mortgage must be prepared in advance as it is an important investment. Between the work to be done, the upgrades to standards and the communication campaigns, a substantial budget must be planned. Various financing options are then available for the investor:
● The bank loan with a personal contribution of 20% of the total cost of the project;
● Leasing or leasing, available only for certain equipment;
● Rental management;
● Beer contracts.
When renovating a hotel or restaurant, a bank loan is the most popular solution. However, this is a fairly complex process since banks require significant guarantees, a well-developed business plan and a complete file...
Other possible options
To find financing, you can also turn to the public investment bank or BPI, which provides support to companies in difficulty. Using a financing broker is also an excellent option to help you with the various financing procedures and the preparation of your file! To go further, click hither !
