Running a Hotel is not for everyone, it not only needs a 24 hours alignment to provide the best service to the customers, there’s also the huge working capital requirements that a Hotel needs on a regular basis. A primary need is to arrange working capital during the off season period as almost every tourist hotel waits for the prime tourist season to get full occupancies, it also means it has to run the show during the non-peak season and during that non-peak season the hotel has to continuously manage the regular upkeep and also pay the employees regularly and then there’s the regular need to invest in hotel to modernize and upgrade so that one may command the right charges on the hotel booking marketplaces, the upgrades could be like adding a kitchen, investing in a bar or a conference room or a business section also it may cover adding items like a kids playing section and a library. The list is endless however, the options to raise money are limited.
While covering for working capital needs requires short term hotel financing, whereas investing in new add-ons require long term business loans or the hotel loans. Amongst the options the hotels have raising money from the local lenders is a very risky affair as they charge a huge amount of interest which is normally much more than the amount they can earn, which makes it useless and unnecessary mode of raising the funds. The traditional lenders do offer the business loans for hotel financing however there are several bottlenecks that it comes along with, firstly the traditional lenders demand collaterals and a lot of hotels run on the leased or rented premises which rules them out of the purview of the traditional lenders. Secondly, the traditional lenders demand multiple documents which makes it a lengthy process and also not every hotel has the required documents. And then there’s this lengthy application process that the traditional lenders follow which requires multiple branch visits and an overall timeline of weeks or even months which makes the entire process of applying for hotel loans useless.
The best option that the hotels have for raising hotel financing is to go with the digital lenders which offer special products for hotel loans. Here’s how the business loans for hotels is revolutionized with the digital lenders:
The digital lenders analyze the credit worthiness of hotels on the basis of their business transactions and hence offer unsecured hotel business loans. They look at the transactions with travel booking aggregators and based on the business patterns and cycle they offer hotel financing.
- Special Products
The digital lenders offer special products to hotels for the specific needs, they offer working capital loans or the unsecured credit limits to hotels as business loan to cover their expenses during the lean periods. Also, they offer long term hotel financing or term loans to hotels, which they can use to invest in modern facilities and amenities.
- Application Process
Digital Lenders offer a really simple application process which requires the hotel owners to fill a simple online form with business details and KYC, also unlike the traditional lenders the digital lenders do not require any branch visits to complete the hotel financing application.
- Quick and Simple
The entire process followed by the digital lenders for hotel loans is quick and simple, the entire underwriting and scorecard is automated and is done using machine learning, which ensures once the hotel business owners fill the form they get the decision on their business loan as quickly as within 24 hours.
- Loans up to INR 50 Lacs
The top digital lenders like Indifi offer business loans for hotels starting from INR 50,000 to up to INR 50 Lacs for both their short term and long term hotel loan needs.
- Flexible Repayments
The leading digital lenders like Indifi not just have a special product for hotel financing, they also offer flexible repayment options for hotels based on their business transactions, the repayments could be linked to business transactions itself which means there is no need to separately plan for EMIs or the hotels may also pay for business loans in Monthly, Fortnightly or Weekly Installments.