How You Can Get an SBA Hotel Loan in India?

To set up a hotel business can be quite a daunting and intimidating task.

Here is a multitude of factors that need to be taken into consideration in order for the hotel business to be set up in proper accordance and flourish.

There are a great number of aspects that need to be taken care of. Staffing, hotel brand, infrastructure design, employment of works, and power distribution are some of them.

Being able to have a business financing for the hotel is one of the key aspects that help set the ball in motion in establishing a restaurant.

Hotel

One of the many ways through which a hotel can be established is through an SBA hotel loan. Small Business Loans for hotels allow aspiring business owners to get attractive hotel loans at competitive terms and rates.

What is an SBA Loan?

SBA or small business loans are government schemes that allow new and pre-existing business owners the opportunity to get a collateral-free credit loan if they manage to fit the eligibility criteria. These loans are a great means by which business owners can receive financial support in order to establish and grow their business.

How to Get an SBA Hotel Loan in India?

If you are Indian hotel business owner, or willing to establish one, then a hotel loan is the way to go.

There are many online loan service providers and banks that offer different hotel loan options for growing businessmen. Those who are looking for a hotel loan can approach these forums to procure one.

Related: Step by Step Guide for Getting a Loan for Engineers

By clearing the eligibility criteria for these loan service providers, one can easily get a hotel loan.

Eligibility Criteria:

The following are the basic eligibility criteria to apply for an SBA Hotel loan:

  • The business for which the hotel loan is being applied for must have been in operation for a time period of 6 months without any interruptions.  If the loan is for the opting of anew hotel business, then the loan applicant must produce 1-year worth of business proceeding. This is to establish the fact that the applicant will be able to repay the loan without any complications.
  • The business for which the loan is being taken should be in the non-restricted area.
  • The business owner should have incurred a turnover of a minimum of Rs.90,000 in the last 3 months from preceding the hotel loan application.

Documents for Hotel Loan Application

To apply for a hotel loan, the business owner must have the following documents that need to be attached with the loan application:

  • Address proof of business
  • Proof of business registration
  • GST filing
  • Trade License
  • VAT registration
  • Company PAN card (if available)
  • Aadhaar card of business owner/ proprietor
  • Copy is partnership deed (if the business is under a partnership)
  • Bank statement for the last 1 year

These are some of the documents that are needed to be attached and submitted along with the hotel loan application form to the loan providers.Depending on the source for the loan, the applicant may need to attach other specified documents in order to get the clearance for the hotel loan.

Steps to Apply for a Hotel Loan:

Step1: Find an SBA loan service provider either online or by approaching a bank.

Step 2: Compare different schemes and plans for the hotel loan and select the loan option that best fits your needs and has the necessary financial and payment benefits.

Step 3: Check whether or not you meet the eligibility criteria for applying for that hotel loan option.

Step 4: Fill out the loan application form with the necessary data.

Step 5: Attach the required documentation with the loan filled out loan application form. And submit then to the loan provider or bank.

Step 6: After submitting the loan application, wait for the loan provider to verify the hotel loan application and sanction it if all remain in order.

Step 7: After verification, the loan amount will be credited to the provided bank account which can then be used by the business owner to establish and/ or upgrade their hotel business.

Loan AmountThe loan amount ranges from Rs.10000 to Rs.2 crore depending on the business and loan provider.
Interest RateStart from 15 % per annum.
Fee for Processing2%
Time PeriodUp to 3 years.
Repayment MethodMonthly, Bi-monthly, Yearly.
Fee for Pre-Closure0

Benefits of a SBA Hotel Loan in India

When it comes to the hotel business industry, having the necessary amount of financing and capital is of key importance in order to flourish. By applying for a hotel loan, business owners can cut through a lot of the red tape that would otherwise inhibit the growth of their hotel business.

  • Personalization:  There are different types of hotel loans that can be customized and tailored to the specific needs of different business owners. This makes the loan more flexible and understanding of the requirements of the applicants.
  • Hidden Costs: There are no hidden costs when it comes to hotel loans in India. All the payments and schemes are laid out for the applicant to understand and compare and all future payments are made apparent at the time of application of the hotel loan.
  • Easy Liquidity: Hotel loans allow the applicant to better streamline their cash flow and thus help them get more fluent liquidity of assets for financial use.
  • Unsecured Loans: Some of the Hotel loans in India require n collateral to be given upon which the loan amount is distributed. The absence of security allows the applicant to have lesser worries and easy acquisition of the hotel loan.
  • Multiple Repayment options: Applicants of a hotel loan have the benefit of having flexible repayment option for the loan. The applicant can choose to repay their loan on a monthly, bi-monthly, yearly, or fortnightly basis, whichever they are most comfortable with.