Hotel & Hospitality Loans Australia

Most lenders cap hotel and hospitality loans at 50% to 65% LVR, depending on the asset type, trading history, occupancy rates and borrower profile. Branded hotels in strong metropolitan markets with consistent revenue may attract the upper end of the range. Seasonal, regional or leasehold assets generally attract a lower LVR or require a specialist lender.

Most hospitality property purchases require a deposit of 35% to 50% of the purchase price or going concern valuation. The exact amount depends on the asset type, lender, trading performance, management structure and overall borrower strength. Stronger trading history and higher occupancy can support a better LVR outcome.

Leasehold hospitality finance is possible but more difficult than freehold. The lender cannot take security over the land and building, so the loan is assessed primarily on the business income and the remaining lease term. Specialist commercial or private lenders are more likely to consider leasehold hospitality deals than major banks.

Most lenders require a minimum of two years of verified trading accounts for hotel and hospitality loans. Lenders review profit and loss statements, BAS, tax returns and bank statements to confirm consistent trading income. Some specialist lenders may consider shorter trading history where the asset has strong occupancy, a management agreement or a recognised brand affiliation.

Yes. Occupancy rate is a key metric for hotel lenders. Higher and consistent occupancy supports stronger income evidence and a better loan outcome. Lenders also look at RevPAR (revenue per available room), average daily rate and seasonal patterns. Low or declining occupancy can reduce lender appetite and may require a larger deposit.

In some cases, an SMSF may be able to purchase eligible commercial hospitality property through a compliant limited recourse borrowing arrangement. The transaction must meet SMSF lending rules, and specialist lenders who support SMSF commercial deals are required. You should obtain qualified financial, legal and tax advice before using an SMSF to buy hospitality property.

A going concern valuation values the property as an operational business, including the land, building, equipment, licences and trading goodwill. Most hotel and hospitality lenders require a going concern valuation rather than a standard property valuation. The going concern value can be higher or lower than the bricks-and-mortar value depending on trading performance, and affects the LVR and loan amount available.

Typical documents include the contract of sale, two to three years of profit and loss statements, tax returns, BAS statements, bank statements, liquor licence details, management agreements, lease agreements if applicable, entity documents and evidence of deposit. The exact file depends on the lender, loan type and asset structure.