Hotel loan calculator
Put in the rooms, rate and occupancy, and the sizer works out net operating income, the payment, your debt service coverage and the largest loan the property supports. The numbers below are an example 64-room motel. Replace every one with yours.
How the sizer gets from rooms to a loan amount
A hotel lender sizes the loan on the income the property already earns, then checks it against the price. The sizer runs the same four steps.
1. RevPAR and revenue
Revenue per available room is ADR times occupancy. In the example, $89 at 62% is $55 a night for every room, sold or not. Times 64 rooms times 365 nights gives $1,289,005 of rooms revenue, and the 2% of other income brings the total to $1,314,785.
2. Net operating income
Take out operating costs (56% of revenue in the example, $736,280), franchise fees, management, property taxes and insurance ($98,000 together) and a reserve for furniture, fixtures and equipment ($52,591). What is left, $427,914, is the net operating income. Debt service, depreciation and income tax are not costs at this line.
3. Debt service coverage
A $2,880,000 loan at 10% amortized over 25 years costs $314,047 a year. $427,914 divided by $314,047 is a DSCR of 1.36. The hotel earns $1.36 for every $1 of mortgage payment.
4. The largest loan
Divide NOI by the lender's minimum DSCR to get the most debt service the bank will accept: $427,914 / 1.25 = $342,331 a year. At the same rate and term that payment carries a loan of $3,139,383. The lender also caps the loan at a share of the price (90% of $3,200,000 is $2,880,000), and you get the smaller of the two: $2,880,000.
Breakeven occupancy is the occupancy at which NOI exactly pays the mortgage. In the example it is 48.6%, against 62% today. The gap between the two is your cushion for a bad year, and it's one of the first numbers a credit committee checks.
What the sizer leaves out
- The SBA guaranty fee and closing costs, which are usually financed and make the loan larger.
- A property improvement plan (PIP). A brand will often require one on a sale, and lenders add it to the project cost.
- Working capital and the global cash flow test, where the lender adds your other income and debts.
- Seasonality. A lender looks at the lowest months to see whether the hotel can carry its payment all year.
Program defaults. SBA 7(a) sets the rate to the SBA maximum for loans above $350,000, prime plus 3 points (10.00% with prime at 7.00% on October 22, 2026, Federal Reserve H.15), a 25-year amortization and 90% of cost. On a hotel purchase SBA allows 25 years on the real estate share only, or on the whole loan when real estate is 85% or more of the project; furniture, goodwill and working capital get 10 years, so a blended term can be shorter. SBA 504 sets 85% of cost, because hotels need 15% down in 504. Blend the rate yourself: the CDC's 25-year debenture priced at 6.97% for October 2026 (priced 2026-10-08) on 35% of the project, and your bank's rate on 50%. Bank or conventional has no program rule to follow, so its 65% of price and the 7(a) cap rate are placeholder assumptions, not published figures: replace them with your lender's terms. Your lender may quote lower than any of these. See SBA 7(a) for hotels and SBA 504 for hotels.
Questions people ask
What DSCR do hotel lenders want?
For an SBA 7(a) loan to buy a hotel, SOP 50 10 8.1 sets 1.25x on the business's historical cash flow; for most other SBA 7(a) and 504 loans the floor is 1.15x. Banks lending without SBA set their own minimum, often higher for hotels. The sizer starts at 1.25x; change it to whatever your lender quotes.
Why does my lender use a lower occupancy than the seller quoted?
Lenders underwrite the trailing twelve months the tax returns and STR reports support, not a pro forma. If the seller says 70% but the returns show 61%, expect the bank to size the loan on 61%. Run the sizer both ways to see what the gap costs you.
Does the sizer include the SBA guaranty fee?
No. The guaranty fee is usually financed into the loan, which makes the loan slightly larger than the amount you asked for. Add it to the loan amount if you want the payment to include it.
Have a deal under contract?
Send the numbers to Janover Capital, which runs this site and arranges hotel financing through lenders. A person there reads every request and replies.