This article from Sableport Capital Group in DeLand, Florida explains how small hotels, motels and inns pay for room refreshes: reserves, term loans, FF&E equipment financing, leases and phased work, with invented worked figures and Volusia County, FL lodging counts. It covers renovation financing only; buying or refinancing a building is outside this site.
The Direct Answer: Four Ways to Pay for a Refresh
A refresh replaces soft goods such as carpet, drapery, bedding and upholstery, sometimes with case goods such as beds, desks and dressers. It does not change the building. Because it is a purchase with a life of several years, it is financed like equipment: with a term loan, an equipment loan or a lease, or paid for from a replacement reserve. Phasing the work spreads the cost over time.
The hotel and motel page covers lodging funding generally.
Hotels and Motels in the Volusia County, FL Counts
Traveler accommodation counted 152 employer establishments in Volusia County, FL in 2023, with 2,396 employees and $87.2 million in payroll; 44.7% had fewer than five employees (County Business Patterns 2023). Nonemployer Statistics counted 160 lodging businesses without paid employees for 2024 (Nonemployer Statistics 2024), a separate program.
Those counts include independent motels, inns and flagged hotels. A flagged property's refresh can be set by its franchisor's standards; an independent sets its own schedule.
A Hotel Renovation Loan Worked by Hand
Illustration only, invented figures: a 42-room motel refreshes every room at $5,800 a room, $243,600 in all (our arithmetic). A term loan over 72 months at an invented 10% annual rate costs about $4,513 a month; equipment financing over 60 months at an invented 9.5% costs about $5,116 a month (our arithmetic). The shorter term costs more each month and less in total interest.
The term loan page explains fixed installments.
Motel Financing Options for Independent Hotel Owners
| Option | What it covers | How the money goes back |
|---|---|---|
| Replacement reserve | Any refresh the cash covers | No payments; the reserve is rebuilt from revenue |
| Term loan | Soft goods, case goods and labor | Equal installments to a fixed end date |
| Equipment financing | Furnishings and equipment | Fixed payments, secured by the items |
| Lease | Furnishings, televisions, laundry | Monthly payments; return, renew or buy at the end |
| Line of credit | Small phased purchases | Interest on the drawn balance only |
Phasing a Refresh to Keep Rooms Available
Illustration only, invented figures: the same motel refreshes 14 rooms at a time, three phases of $81,200 each (our arithmetic). Each phase can be financed on its own or drawn from a line, and the rooms already refreshed earn while the next phase is under way. Phasing also limits how many rooms are out of service at once.
A partner reading a phased request wants the full plan, the cost of each phase and the occupancy history for the months each phase falls in.
A Motel Financing Agreement: Clauses to Read
- The rate, term and total cost in dollars.
- What secures it: the furnishings, a blanket lien, or both.
- Any personal guarantee.
- Prepayment charges.
- Whether a franchisor must approve the work before funding.
A Hotel Loan Calculator Next to a Lease
Illustration only, invented figures: leasing the same furnishings at $4,350 a month for 60 months totals $261,000 before any buyout (our arithmetic), against about $306,963 on the 60-month equipment loan above (our arithmetic). The loan ends with the motel owning the furnishings; the lease ends with a choice.
Furnishings kept until they wear out favor the loan; items replaced on a cycle, such as televisions, can favor the lease.
What Happens on a Hotel Loan Default
Miss one payment and a late fee can follow, then a formal notice of default. Once in default, the funder can claim the furnishings or other pledged assets and pursue a personal guarantee if one was signed. Calling the funder before a payment is missed leaves room for a modified schedule. Match the payment to the weakest months on the statements before signing.
Replacement Reserves and When to Use Cash Instead
A property that sets aside a share of room revenue each month for replacements can pay for a refresh without any financing, and avoids interest entirely. Financing makes sense when the reserve falls short or when using it would leave too little cash for payroll in slow months. An owner can combine the two: reserve cash for part of the cost and a loan for the rest.
Motel Financing Companies and Where Requests Go
Equipment funders that know hospitality furnishings, banks that lend to lodging businesses, and specialty funders that read booking payouts all take on refresh requests. A request through Sableport goes to partners that consider that kind of request, and the partner decides. Buying or refinancing the building itself is a mortgage question for a different kind of lender.
By Sableport Capital Group · Updated
