Hotel & Hospitality Bridging Loans | Finance from £25k to £60m

Hotel & Hospitality Bridging Loans

Hotel Bridging Loans

Hotels, guest houses, bed and breakfasts, aparthotels, and serviced accommodation present unique lending challenges that place them outside the scope of standard property bridging. These are trading businesses as much as they are property assets — their value is driven by occupancy rates, average daily rates, revenue per available room, and operational management rather than simple bricks-and-mortar comparables. Hotel and hospitality bridging loans are specialist short-term facilities structured around the trading nature of these assets, providing acquisition capital, refurbishment funding, and interim finance for operators and investors in the hospitality sector.

Platinum Global Bridging Finance arranges hotel and hospitality bridging loans from our office at 64 Knightsbridge, London. We access specialist hospitality lenders and commercial bridging providers experienced in trading business valuations, structuring facilities from £500,000 to £25 million. Indicative terms are delivered within 24 hours.

What Are Hotel Bridging Loans?

Hotel bridging loans are short-term, asset-secured facilities used to acquire, refurbish, reposition, or refinance hospitality properties. The loan is secured against the hotel or hospitality property and is repaid through a defined exit strategy — typically a refinance onto a specialist hospitality mortgage, a sale of the asset as a going concern, or completion of a repositioning strategy that increases the trading value.

The critical difference from standard commercial bridging is the valuation methodology. Hotels are valued as trading businesses using an EBITDA multiple or a profits method, rather than on a per-square-foot or comparable sales basis. This requires specialist valuers — RICS-accredited surveyors with specific hospitality sector experience — and lenders who understand the relationship between trading performance, management quality, and asset value.

Hotel Bridging Lending Criteria

• Loan sizes from £500,000 to £25 million
• LTV up to 70% on the property value, assessed by specialist hospitality valuers
• Interest rates from 0.70% per month
• Terms from 6 to 24 months
• Interest can be rolled up — no monthly payments required
• Available to individual operators, hospitality groups, limited companies, and SPVs
• Experienced operators preferred — first-time buyers need management team with credentials
• Trading and non-trading hotels considered
• No broker fee on facilities of £500,000 or above

When Hotel Bridging Loans Are Used

Acquiring a Going Concern

An operator or investor acquires an established, trading hotel. The purchase includes the property, the business, and often the staff under TUPE regulations. A bridge provides the acquisition capital while the buyer arranges long-term hospitality finance or stabilises trading performance post-acquisition. Speed is often critical — hotel businesses deteriorate during prolonged sale processes as staff leave, bookings decline, and maintenance is deferred.

Purchasing a Closed or Distressed Hotel

Hotels that have ceased trading — perhaps due to the previous owner’s financial difficulties, COVID-era closures, or operational failure — are often available at significant discounts to their trading value. A bridge funds the acquisition and the capital expenditure needed to reopen and reposition the asset. The exit is a refinance at the improved trading value or a sale once the hotel is operating profitably. These turnaround opportunities can generate substantial returns for experienced operators who can restore trading performance.

Refurbishment and Repositioning

An existing hotel owner needs capital for a major refurbishment — upgrading rooms, public areas, kitchens, and facilities — to move the property up-market. A bridge funds the works, with the exit being a refinance at the post-refurbishment trading value. Room rate increases and improved occupancy following the upgrade typically justify the capital investment. A 3-star hotel repositioned as a 4-star can achieve 30-50% higher room rates, transforming the EBITDA and the asset value.

Change of Use to Hospitality

Converting a non-hospitality property — such as a large residential house, office building, former care home, or pub — into a hotel, guest house, or serviced apartment building. A bridge funds the acquisition and conversion, with the exit being a hospitality mortgage once the property is trading and generating revenue. This is particularly common in tourist destinations where residential properties with period character can be converted into boutique hotels at values significantly above their residential worth.

Seasonal Cash-Flow Bridging

Hospitality businesses with seasonal trading patterns — coastal hotels, rural retreats, ski lodges, event venues — may experience cash-flow gaps during low season when occupancy drops to 20-40% but fixed costs (staff, rates, insurance, maintenance) continue. A short-term bridge secured against the property provides working capital until peak season revenue restores cash flow. These facilities are typically 3-6 months and are repaid from the revenue generated during the trading season.

Serviced Accommodation and Aparthotels

The serviced accommodation market has grown significantly, driven by platforms like Airbnb, Booking.com, and corporate travel demand. Investors acquiring properties for serviced accommodation or aparthotel use need specialist bridging that understands the hybrid nature of these assets — part residential, part hospitality. We arrange bridging for serviced accommodation acquisitions and conversions, with exits via specialist SA mortgages or hospitality lenders.

Worked Example: Boutique Hotel Acquisition

An experienced hotelier acquires a 22-room boutique hotel in the Cotswolds for £2.8 million. The hotel is trading but underperforming — current EBITDA is £180,000 per annum against a potential of £350,000 with improved management and a room refurbishment programme. The buyer plans a £400,000 refurbishment over 6 months while maintaining partial trading.

Bridging facility: £1.96 million acquisition (70% LTV) plus £400,000 refurbishment = £2.36 million total. Interest rate: 0.75% per month on drawn funds, rolled up. Term: 18 months. Total interest (on average drawn balance of £2.1 million over 12 months): approximately £189,000. Arrangement fee at 2%: £47,200. Specialist hospitality valuation: £5,000. Legal fees: £10,000. Total bridging cost: approximately £251,200.

Exit: specialist hospitality mortgage at 65% of the post-refurbishment trading value (estimated at £4.5 million based on improved EBITDA of £350,000 at a 13x multiple) = £2.925 million. This repays the bridge and provides the operator with a stabilised, income-producing asset with approximately £1.575 million of equity.

What Lenders Look For in Hospitality Bridging

Hospitality bridging lenders assess deals differently from standard commercial lenders. The key factors are the property value and condition — its physical state, location, accessibility, and kerb appeal. The current and projected trading performance — revenue, occupancy rate, average daily rate (ADR), revenue per available room (RevPAR), and EBITDA. The borrower’s hospitality experience and management capability — lenders want to see operators with a track record of running profitable hospitality businesses. The local market — tourism demand, competitor set, transport links, seasonality, and barriers to entry. The refurbishment or repositioning plan and its projected impact on trading — detailed costings, realistic timelines, and evidence-based revenue projections. And the exit strategy — a confirmed hospitality mortgage AIP or a clear path to sustainable trading that supports long-term refinance.

First-time hotel buyers without hospitality experience will face a narrower lender panel and may need to demonstrate a management team or operational partner with relevant credentials. An operator with 10 years of experience running similar establishments will receive significantly better terms than a first-time buyer with no track record.

Costs of Hotel Bridging

Monthly interest rates for hospitality bridging typically range from 0.70% to 1.0% per month, reflecting the specialist nature of the asset class. Arrangement fees are typically 1.5-2% of the loan. Specialist hospitality valuations cost £3,000-£8,000 depending on the size and complexity of the hotel. Legal fees: £5,000-£12,000 for complex trading business transactions. On a £2 million hotel bridge held for 12 months at 0.75% per month, the total interest cost would be approximately £180,000. Including arrangement fee (£40,000), valuation (£5,000), and legal costs (£8,000), the total cost would be around £233,000.

Frequently Asked Questions

Can I get a bridging loan on a hotel that is not currently trading?

Yes. Closed or non-trading hotels are acceptable to specialist lenders, though the valuation will reflect the closed status and the capital expenditure required to reopen. The lender will want to see a credible reopening plan and evidence of the borrower’s capability to execute it.

How is a hotel valued for bridging purposes?

Hotels are valued using the profits method (based on maintainable EBITDA) or a comparative method (price per room against comparable transactions). A specialist RICS-accredited hospitality valuer is required — not a standard commercial surveyor. Valuations typically take 2-3 weeks for a trading hotel and include an assessment of the accounts, occupancy data, and market positioning.

Can I use hotel bridging for serviced apartments or Airbnb?

Serviced apartments and short-let portfolios sit between residential and hospitality lending. Some bridging lenders treat them as commercial hospitality; others as residential investment. We identify the most appropriate lender based on the specific property, trading structure, and exit strategy.

What is the minimum number of rooms for hotel bridging?

There is no fixed minimum, but most specialist hospitality lenders focus on properties with 8+ rooms. Smaller guest houses and B&Bs (under 8 rooms) may be assessed on a residential rather than trading basis, which can actually simplify the lending process.

Does Platinum Global charge a fee?

No broker fee on facilities of £500,000 or above.

Related Bridging Loans

• Bridging Loans — our main UK bridging loans page
• Leisure Property Bridging Loans
• Care Sector Bridging Loans
• Large Bridging Loans
• Limited Company Bridging Loans
• Commercial Bridging Loans
• Refurbishment Bridging Loans
• London Bridging Loans