Will MCA funders write deals on hotels?

Yes, but selectively. Independent hotels, branded franchises (Hilton, Marriott, IHG, Choice, Wyndham), and motels all qualify, but each is underwritten differently. Branded franchises see better pricing because the underlying brand standards reduce default risk. Independents and motels see higher factor rates and shorter terms. Most MCA funders cap hotel deals at $300K–$500K for first position.

What factor rate does a hotel see?

Branded franchise (Hilton, Marriott, IHG, Hyatt) with 24+ months in flag, 650+ FICO, $80K+ monthly deposits: 1.24–1.32 factor on a 9–12 month term. Independent or boutique hotel: 1.30–1.40 on 9 months. Motel or extended-stay: 1.34–1.44 on 6–9 months. Roadside/single-property motels often see 1.40+ on shorter terms.

How much can a hotel qualify for?

Single branded property: $50K–$250K typical, capped at 0.8–1.2x monthly deposits. Multi-property operator: $200K–$750K. Independent hotel: $25K–$150K. The fundable amount is calculated on the trailing 6–12 month deposit average to smooth out seasonality.

Should I look at SBA 504 instead of MCA?

For property acquisition, renovation, or refinancing, almost always yes. SBA 504 finances hotel real estate at 5.5–7% APR with 20–25 year amortization. For working-capital needs (FF&E refresh, PIP compliance, marketing, off-season payroll), MCA can fit. SBA 7(a) is also useful for working capital and tops out at $5M. Match the product to the use.

How does franchise PIP (Property Improvement Plan) timing affect MCA?

PIPs are mandatory renovations the franchisor requires every 5–7 years. They cost $200K–$2M+ per property and have hard deadlines. MCA can bridge a PIP timing gap (you've ordered the FF&E, payment is due in 30 days, the SBA 504 close is 6 months away), but should not finance the full PIP — that's SBA 504 or specialty hospitality lender territory. PIP bridges typically size $50K–$200K.

MCA for hotels & motels 2026 — the merchant's funding guide

Hotels and motels are a serious capital category — most operators carry real estate, FF&E, brand obligations, and seasonal revenue swings that make capital planning complicated. MCA fits some hotel use cases (PIP bridges, off-season payroll, marketing pushes) and is wrong for others (property acquisition, full PIPs, long renovations). Here's the honest 2026 picture on factor rates by brand tier, fundable amounts, and when SBA 504 or specialty hospitality lending is the right call.

The 60-second answer

A branded franchise hotel (Hilton, Marriott, IHG, Hyatt, Choice) with 24+ months in-flag, 650+ FICO, $80K+ monthly deposits funds at 1.24–1.32 factor on a 9–12 month term, at 0.8–1.2x trailing 6-month average monthly deposits. Independent and boutique hotels: 1.30–1.40. Motels and roadside extended-stay properties: 1.34–1.44.

The big strategic call: hotel operators often default to MCA for capital needs that SBA 504 (real estate, PIPs), SBA 7(a) (working capital up to $5M), or specialty hospitality lenders (Stonehill PACE, Aries Conlon, ARC PE) would price 30+ points cheaper. MCA fits short, definable working-capital gaps. It doesn't fit property acquisition or 18-month renovations.

Why hotels underwrite the way they do

Hotel underwriting is meaningfully different from other SMB MCA categories because of structural realities:

Real estate is on the balance sheet. Most hotel operators own or ground-lease the property. That real estate is the dominant asset and dominant collateral conversation — for SBA 504 financing it's the whole point, for MCA it's mostly irrelevant since the funder won't perfect against the property.
Brand standards and PIPs. Branded franchises must complete Property Improvement Plans on the franchisor's schedule. These can run $200K–$2M+ and have hard deadlines. Underwriters check PIP timing because a property heading into a PIP year has known capital needs.
Franchise fee obligations. Royalty, marketing, and reservation system fees run 10–15% of room revenue at most brands. Underwriters subtract these from gross revenue when sizing the deal.
Seasonality is severe. Resort markets do 70%+ of annual revenue in a 6-month window. Business-travel hotels swing on conference calendars and corporate quarter ends.
ADR (Average Daily Rate) volatility. Rates flex 30–50% between high and low season. Underwriters look at occupancy and RevPAR trends, not just deposits.
OTA fee load. Properties heavy on Expedia, Booking.com, and Airbnb pay 12–25% of bookings to the OTA. Underwriters know what direct-vs-OTA mix means for net cash flow.

Factor rates by tier

A-paper hotel operator (multi-property branded franchise OR single premium-brand flag with 36+ months in-flag, 700+ FICO, $150K+ monthly deposits, healthy STR/CompSet RevPAR index): 1.22–1.28 factor, 12-month term. Funders: Forward Financing premium, Credibly premium, hospitality specialists like Stonehill at lower MCA-equivalent pricing.
B-paper hotel operator (single branded property, 24+ months, 620–700 FICO, $60K–$150K monthly): 1.28–1.36 factor, 9–12 month term. Funders: Credibly standard, Forward Financing, Reliant.
C-paper hotel or motel operator (independent property, under 24 months in current ownership, FICO under 620, $30K–$60K monthly): 1.36–1.46 factor, 7–9 month term. Funders: Credibly, Reliant, Mulligan Funding.

The bank-statement story that gets you funded

Hotel files have a recognizable shape underwriters expect. The healthy pattern looks very different from a restaurant or retail file.

The healthy pattern

Daily deposits from card processor (Shift4, FreedomPay, Heartland, Authorize.Net). Underwriters expect consistent daily card settlements with weekend bumps.
Weekly OTA payouts visible. Expedia and Booking.com weekly settlements show diversified booking channels.
Smooth franchise-fee ACH outflows. Monthly royalty/marketing/RSF payments to the franchisor on schedule signal a property in good standing.
Predictable payroll cycle. Biweekly or weekly payroll outflow matching property size. A 60-room limited-service hotel running payroll consistent with 12-18 FTEs is what underwriters expect.
Property tax and insurance escrow visible. Predictable, recurring, signals legitimate operations.

What kills the file

Franchise default notices. Any franchisor letter on file (royalty late, PIP non-compliance, brand-standards issue) is an instant decline.
Property tax or insurance lapse. Lapse = property at risk = no deal.
Mortgage delinquency. Even one 30-day late on the underlying property loan tanks the file.
Existing MCA daily debits on the property. Hotel stacking is a structural collapse pattern.
STR/CompSet declining RevPAR. A property running below its competitive set for 6+ months signals operational issues underwriters won't fund around.

Which funders actually fund hotels

Forward Financing — funds A and B-paper hotels with manual review. Best for branded multi-property operators.
Credibly — funds branded and independent hotels at standard MCA pricing with transparent prepayment discount.
Reliant Funding — willing on B/C paper hotels and motels.
Mulligan Funding — selectively funds hospitality; underwriters understand seasonality.
Stonehill / Aries Conlon / specialty hospitality lenders — not MCA, but worth knowing about for PIPs, renovations, acquisitions, and bridges above $500K. Pricing typically 10–14% APR.

Funders to avoid for hotel deals: anyone who quotes you a $500K MCA on a single motel doing $70K/month (the math fails), brokers who skip the franchise-standing conversation, anyone bundling a property-acquisition loan with an MCA, and any deal with a confession of judgment in a state where it's still allowed.

Fundable amounts

Single independent hotel or motel: 0.6–1.0x trailing monthly deposits, $25K–$150K typical.
Single branded franchise hotel: 0.8–1.2x trailing monthly deposits, $75K–$300K.
Multi-property branded operator: 0.9–1.3x combined deposits, $200K–$750K.
Resort property: Sized off trailing 12-month average to smooth seasonality, similar multiples to comparable urban properties.

The most common hotel-MCA mistake: taking a 6-month MCA in November to cover off-season payroll and OTA-fee gaps, then hitting March still in the hole because January–February revenue couldn't service the daily ACH. If you're MCA-funding the off-season, take a 9–12 month term and a payment rate (% of deposits) structure so payments scale with revenue.

Use cases that get funded

PIP bridge (small to mid-scope). FF&E down payments, vendor deposits while waiting for SBA 504 close. Well-understood by hospitality-aware underwriters.
Off-season payroll bridge. Predictable annual gap, MCA fits if sized to repay during peak season.
Marketing push pre-peak season. Paid search, OTA placement, corporate-rate sales blitz. Measurable ROI.
Insurance annual lump-sum. Annual policy in full saves 8–12% vs monthly.
Soft renovation (rooms refresh, public area refresh). Mid-$50K to $200K-scope renovations that fit a 9–12 month payback.

Use cases that get declined or repriced: property acquisition (SBA 504), full PIP ($500K+) (SBA 504 or specialty), long renovation (18-month payback doesn't fit MCA), mortgage payoff (refi territory, not MCA).

What to do before applying

Pull 12 months of bank statements showing seasonal cycle. Three months can hide the off-season collapse.
STR (Smith Travel Research) report if available. Showing your property running at-or-above CompSet RevPAR is a paper-grade lift.
Document franchise standing. Recent franchisor inspections, brand-standards compliance, royalty current. Print the confirmation.
PIP schedule disclosed. Underwriters want to know if a $1M PIP is due in 18 months — that changes their willingness to write a current MCA.
Compare against SBA 7(a) for working capital, SBA 504 for real estate / PIP, specialty hospitality lenders above $500K. Document why MCA is the right call for the specific use.

The honest tradeoff

A 1.30 factor on a 10-month hotel MCA is roughly 45–55% APR-equivalent. For a marketing push that lifts occupancy 4 percentage points during peak season (often $80K–$200K of incremental revenue), the math clears in 12–18 months. For a PIP bridge that gets you to SBA 504 close 4–6 months out, the math also clears.

What doesn't work: financing a $400K PIP entirely on MCA, or using MCA to plug a chronically declining RevPAR trend. Properties losing 8%+ year-over-year revenue that try to MCA their way through it are the modal failure case in this segment. The underlying problem (location, brand fit, management) doesn't get fixed by more debt — it gets accelerated.

Frequently asked questions

Will MCA funders write deals on hotels?: Yes, but selectively. Independent hotels, branded franchises (Hilton, Marriott, IHG, Choice, Wyndham), and motels all qualify, but each is underwritten differently. Branded franchises see better pricing because the underlying brand standards reduce default risk. Independents and motels see higher factor rates and shorter terms. Most MCA funders cap hotel deals at $300K–$500K for first position.
What factor rate does a hotel see?: Branded franchise (Hilton, Marriott, IHG, Hyatt) with 24+ months in flag, 650+ FICO, $80K+ monthly deposits: 1.24–1.32 factor on a 9–12 month term. Independent or boutique hotel: 1.30–1.40 on 9 months. Motel or extended-stay: 1.34–1.44 on 6–9 months. Roadside/single-property motels often see 1.40+ on shorter terms.
How much can a hotel qualify for?: Single branded property: $50K–$250K typical, capped at 0.8–1.2x monthly deposits. Multi-property operator: $200K–$750K. Independent hotel: $25K–$150K. The fundable amount is calculated on the trailing 6–12 month deposit average to smooth out seasonality.
Should I look at SBA 504 instead of MCA?: For property acquisition, renovation, or refinancing, almost always yes. SBA 504 finances hotel real estate at 5.5–7% APR with 20–25 year amortization. For working-capital needs (FF&E refresh, PIP compliance, marketing, off-season payroll), MCA can fit. SBA 7(a) is also useful for working capital and tops out at $5M. Match the product to the use.
How does franchise PIP (Property Improvement Plan) timing affect MCA?: PIPs are mandatory renovations the franchisor requires every 5–7 years. They cost $200K–$2M+ per property and have hard deadlines. MCA can bridge a PIP timing gap (you've ordered the FF&E, payment is due in 30 days, the SBA 504 close is 6 months away), but should not finance the full PIP — that's SBA 504 or specialty hospitality lender territory. PIP bridges typically size $50K–$200K.