If you’re a hotel owner looking to complete a Property Improvement Plan (PIP), renovate rooms, or expand your property—without draining your capital reserves—SBA 7(a) cash-out refinancing could be the smartest move you make this year.
Unlike traditional financing, the SBA 7(a) program allows you to refinance existing debt and access additional funds for upgrades, brand compliance, or even working capital, all under flexible, affordable terms. In this guide, we’ll break down what you need to know and how GHC Funding can help you make it happen.
What Is SBA 7(a) Cash-Out Refinancing?
The SBA 7(a) loan is the U.S. Small Business Administration’s most popular financing program. It’s used by small business owners across industries to buy real estate, refinance debt, and inject working capital.
Cash-out refinancing through the SBA 7(a) program allows hotel owners to refinance existing commercial mortgage debt and pull out equity to reinvest into their properties. This is especially useful for:
- Brand-required Property Improvement Plans (PIPs)
- Room and amenity upgrades
- ADA compliance renovations
- Expansions or acquisitions
✅ Official SBA 7(a) Loan Guide
Key Benefits for Hotel Owners
At GHC Funding, we structure SBA 7(a) loans for hotel operators looking to grow. Here’s what makes this program especially powerful for hospitality:
- Up to 100% Loan-to-Value (LTV) – Leverage the full value of your property without large equity requirements.
- Cash-Out Allowed – Use funds for PIPs, renovations, or business operations.
- Fully Amortizing Terms – Loans up to 25 years with no balloon payments.
- Low Interest Rates – Competitive fixed or variable rates, often Prime + 1% to 2.75%.
- Preserve Capital – SBA’s low down payment requirement helps maintain your liquidity.
Who Qualifies?
To qualify for SBA 7(a) hotel refinancing, you’ll need:
- A U.S.-based for-profit business
- Good credit (typically 660+)
- Strong operating history and financials
- Sufficient equity in your property
Even if your hotel hasn’t fully bounced back post-COVID, lenders are often flexible when you work with a partner like GHC Funding.
📘 NerdWallet’s SBA Loan Requirements Overview
What Can You Use the Cash For?
Here’s what hotel owners are doing with SBA 7(a) cash-out proceeds:
- Meeting brand-mandated renovations (like Marriott, Hilton, IHG)
- Upgrading HVAC, roofing, and parking infrastructure
- Adding rooms, kitchens, or wellness centers
- Paying off high-interest commercial loans
- Boosting marketing budgets during slower seasons
💡 LendingTree on Hotel Renovation Financing
Why GHC Funding?
GHC Funding isn’t your average broker. We specialize in SBA 7(a) and alternative commercial real estate financing for hospitality. Here’s what sets us apart:
- No Broker Fees or Points – We’re direct and transparent.
- SBA Experts – Our team knows how to package deals that close.
- Fast Pre-Approvals – Get answers quickly so you can plan ahead.
- Flexible Lending Network – We work with SBA-preferred lenders who understand hotels.
🏨 Learn more: https://ghcfunding.com
Real-World Scenarios
Example 1
A 40-room independent hotel in Florida refinanced $1.9M in existing debt, pulled out $400K in equity, and used it to install solar panels and upgrade all guest bathrooms—while locking in a 6.75% fixed rate for 25 years.
Example 2
A branded motel in Texas completed a $250K PIP using SBA 7(a) cash-out refinancing, allowing them to remain compliant with franchise requirements and avoid penalties.
Is SBA 7(a) Right for Your Hotel?
Here are some signs it might be the perfect fit:
- You own your hotel real estate and have equity
- You need at least $500K for renovations or business growth
- You want long-term, affordable financing
- You want to reduce your monthly debt payments
Even if you’re not sure you qualify, GHC Funding can help evaluate your scenario and find creative ways to structure a loan that works for you.
Get Started with GHC Funding
If you’re planning a renovation, looking to expand, or simply want to optimize your capital structure—don’t go it alone. GHC Funding can help you take advantage of the SBA 7(a) cash-out refinancing program with speed and confidence.
📞 Call us at 833-572-4327
🌐 Or visit: https://ghcfunding.com
Related Resources:
- SBA.gov: 7(a) Loan Program Details
- NerdWallet: SBA Loan Guide for Hotels
- LendingTree: SBA 7(a) Explained
