Much like other industries around the world, the hospitality industry has been hit hard by the recent pandemic. Hotel owners have found themselves with empty rooms and slowly emptying cash reserves as they keep up with payroll and mortgage payments. While the Federal Reserve is working to remedy the situation, you should look for other financing options for your hotel.

By finding different hotel financing options available to you, you can prepare and protect your business in these uncertain times. As the world adapts to the new normal, expect to see an uptick in bookings in the coming months.

Be ready for this gradual return of travelers and local tourists in 2021!

How to Get Hotel Financing & Equipment Financing

Several lenders are actively offering their services, but it’s a matter of learning how to take advantage of these financial products and finding the best offer and equipment financing company for you.

Here are a few options available to you and how to apply for them:

Ask to Modify Your Loan Terms

Given the current situation, a direct and honest approach will be useful. If you have an active loan, communicate your current financial situation to your lender with your business attorney and accountant present.

Ask your lender to modify your existing loan terms or request payment deferments to reduce some of the pressure.

It would be best if you prepared to adopt cost-cutting measures for your operations as well, as they might demand concessions for the changes to your contract.

Look into the Requirements for an SBA Loan or Stimulus Aid

The U.S. Small Business Administration (SBA) has an economic injury disaster loan for business owners looking for suitable financing options. Developed with the economic impact of COVID-19 in mind, these loan options offer hotel owners the support they need as they recover from their recent revenue loss.

Each state has its own version of this loan plan; contact your local representative to determine how to apply for one.

Look for Alternative Financing

Unfortunately, many businesses do not meet the requirements for an SBA loan, or the aid runs out too quickly before everyone gets what they need for their business to survive.

When this happens, look to Regents Capital for alternative funding options, like our hotel financing options. Whether you have existing loans or not, you should consider seeking out better loan options to fund your business continuity plans.

We offer several financing and loan options to hotel owners, including a business line of credit, a working capital loan, and equipment financing programs.

Find out which financing program offers the most advantage for your business without causing long-term problems to your revenue flow.

Bring in a Partner

The recent pandemic has upended several businesses, especially those in the hospitality industry. If you foresee challenges in the coming months, you might want to bring in a partner.

The money your potential partner will bring into the venture can help you manage operating costs, including payroll, supplies, and equipment acquisitions.

Plus, you have the ability to decide how large their percentage is as you negotiate with them, allowing you to retain majority control over your business.

Who to Approach for Hotel Financing

No one could have prepared themselves for the socio-economic impact of COVID-19 and 2020, but that doesn’t mean you have to close your doors permanently!

As you adopt and implement new health and safety protocols, you will need funding to keep your operations running smoothly, and pivot when needed. Regents Capital Corporation is your financial partner during these trying times and looks forward to working with you to help you succeed with our many flexible hotel financing options!

Contact our team to learn more about your hotel financing options!

The coronavirus pandemic has been a learning experience for many business owners. For instance, never has it been more pronounced that flexibility, mobility of operations, and the ability to react to unprecedented events and make wise business decisions fast are crucial for businesses to ride the tide when a crisis washes over their industry.

Gyms and health and fitness establishments were among the businesses most severely affected by the pandemic. As companies that relied a lot on walk-ins and members using on-site facilities for revenues, gyms saw sharp declines in capital. Many were forced to close down permanently.

Unfortunately for some gym owners, closing their doors did not end their financial turmoil because they were still in the middle of paying off the equipment they purchased through bank loans and investor equity. Gyms that opted for equipment leasing fared much better in comparison.

The Benefits of Leasing Gym Equipment

The situation above has highlighted the importance of gym equipment leasing, especially for independent business owners who don’t have financial support from a franchisor. As the coronavirus pandemic has demonstrated, assets in the form of specialized equipment are difficult to liquidate.

Businesses not saddled with the long-term responsibilities of equipment ownership (e.g., 5-year payment plans, maintenance, and repair expenses) had the advantage of decommissioning equipment with minimal financial losses.

Here are some other benefits of leasing gym equipment that are proving to be extra useful during this pandemic:

• Your capital is not tied up to your equipment. When you buy any equipment, you’re effectively signing off a percentage of your expected monthly revenue to their repayment. Renting gym equipment significantly reduces that monthly bill. The business has to pay only for as long as the equipment is needed, or until the lease contract expires.
• If your monthly membership reaches substantial numbers, it can easily cover the cost of your monthly lease.
• Rent-to-own schemes are available, and these arrangements typically spread the cost of acquisition over a longer period. Essentially, you pay less each month but will gain ownership of the equipment at a much later date. This is not a loss since the cost-benefits of gym equipment do not come from ownership but from utilization.
• Interest rates for leasing are often fixed and unaffected by economic upheavals (unlike financing contracts for equipment acquisition with variable interest).
• You have an opportunity to buy equipment at discounted prices. Of course, these pieces of equipment are unlikely the newest models on the market. Still, you could be first in line to purchase well-maintained equipment that customers don’t mind if they’re not brand-new (e.g., weights, bench presses).
• It’s easier and more affordable to upgrade to new equipment when you’re leasing. You can simply not renew your current contract and ask for a new lease agreement for more modern gym equipment.

Leasing does not guarantee that a business will experience zero financial fallout in events like the current pandemic. It can, however, soften the blow. If ownership is your long-term goal, you can reduce your gym’s financial liability by leasing the machines and equipment with technologies that advance rapidly (e.g., elliptical machines and treadmills).

Regents Capital Is Here for Gyms in Tough Times

Our founders at Regents Capital have been providing equipment financing advice and solutions for decades. Which means we can advise you on your leasing plans and needs!