Hotel Market Update: September 2026

By Katie Vivian – Hotel Loan Originator

How Much Can I Borrow Against My Hotel?

Historically, hotel owners could look primarily at LTV to get a good sense of potential loan proceeds. If a lender was willing to go to 65% LTV, the math was relatively straightforward.

Today, several additional constraints can ultimately determine proceeds, and in many cases, cash flow metrics rather than LTV size the loan.

While every deal and lender is different, here are some general metrics we’re seeing in the hotel lending market:

• LTV: Life Companies: 55%–65% | CMBS: Up to 70% | Credit Unions/Banks: Up to 70%–75% | Debt Funds: Up to 70%–75% | SBA: Up to 90%

• DSCR: Generally 1.25x–2.00x+, depending on lender type and deal profile, with LifeCos requiring stronger coverage 

• Debt Yield: Often 10%–15%+, depending heavily on lender type, leverage and asset quality

• PIP / CapEx: Upcoming renovations may need to be funded or reserved for at closing

• Franchise Term: Remaining franchise term can impact both loan term and lender appetite

• Sponsorship: Experience, liquidity, net worth and overall portfolio performance continue to matter

The key is that different lender types can size the exact same hotel very differently.

A Life Company, CMBS lender, bank, credit union, debt fund or SBA lender may each arrive at a very different maximum loan amount based on their individual underwriting requirements.

So while your hotel may support a certain leverage level from a valuation standpoint, DSCR, debt yield, PIP requirements or another underwriting constraint could ultimately reduce proceeds.

With hotel loans originated during the low-rate environment continuing to approach maturity, it’s increasingly important for owners to understand not only what their hotel is worth, but what loan amount today’s cash flow can actually support.

If you have a hotel loan maturing in the next 12–18 months, we’re happy to underwrite the property and provide an indication of how different lender types are likely to size and price the loan in today’s market.