Hotel and Motel Merchant Cash Advance & Business Funding
Independent hotels and motels can get a merchant cash advance based on card deposits and online travel agency payouts. Occupancy follows the travel season, and BLS staffing for hotels runs lowest in January and highest in July. Funders size the payment on the slow season and look closely at brand-required renovations.
How do funders read hotels and motels?
Funders read occupancy trends through deposits, the share of revenue from online agencies, and the franchise agreement if there is one. A property with a renovation deadline from its brand gets questions about the timeline and cost. Equipment financing often fits large replacements better.
How does money come in for hotels and motels?
Guests pay by card at check-in or checkout. Bookings through online travel agencies arrive either as a virtual card or as a payout after the stay, less the agency's commission. Corporate and group accounts are often billed and paid on terms. Deposits move with occupancy, events and the season.
Which months are slowest for hotels and motels?
This table shows how many people private hotels and motels (NAICS 721110) businesses employed each month, as an index where the year's average is 100. It comes from the Bureau of Labor Statistics Quarterly Census of Employment and Wages, the most recent full year available. Staffing is a stand-in for how busy a business is. Deposits can move more or less than headcount, so read it as the shape of the year, not your numbers.
| Month | Staffing index (average = 100) | |
|---|---|---|
| January | 97 | lowest |
| February | 97 | |
| March | 99 | |
| April | 99 | |
| May | 101 | |
| June | 103 | |
| July | 104 | highest |
| August | 103 | |
| September | 101 | |
| October | 100 | |
| November | 99 | |
| December | 99 |
The low point is January at 96.7 and the high point is July at 103.5, a swing of 6.9 points. Winter is the lean stretch for most properties outside warm-weather destinations.
| Quarter | Total payroll index (average = 100) |
|---|---|
| Quarter 1 | 99 |
| Quarter 2 | 99 |
| Quarter 3 | 100 |
| Quarter 4 | 102 |
Payroll by quarter can rise at year end for reasons like bonuses and overtime, not only more work.
What do hotels and motels use merchant cash advances for?
- A brand-required property improvement plan.
- Replacing HVAC units, mattresses or laundry equipment.
- Payroll through the slow season.
- Reservation system and door lock upgrades.
- Marketing to build direct bookings.
What does an advance payment look like in a slow month?
Say a business like yours deposits $200,000 in an average month, and a funder sets a fixed payment of $20,000 a month, 10% of that average. If deposits follow the staffing curve above, here's what the same payment takes in the slowest and busiest months:
| Deposits | Fixed payment | Share of deposits | |
|---|---|---|---|
| Average month | $200,000 | $20,000 | 10.0% |
| January, the slowest | $193,400 | $20,000 | 10.3% |
| July, the busiest | $207,000 | $20,000 | 9.7% |
The payment doesn't change, but in January it takes 10.3% of deposits instead of 10%. Ask the funder to size the payment on the slow months, or ask how reconciliation works before the slow season starts.
Which funding options fit hotels and motels?
Each page runs one option against this industry's slow months.
Same-day merchant cash advance for hotels and motels
Money the same business day for an urgent cost, with the fixed daily debit measured against January.
Business line of credit for hotels and motels
A draw sized for January, repaid in thirds, with the interest on the balance worked out.
MCA consolidation for hotels and motels
One payment in place of two, with the share of deposits before and after in January.
Revenue-based financing for hotels and motels
A remittance that moves with revenue, so January sends less, and the months to reach the repayment cap.
Run a business like this?
Tell us your slow months up front and we'll look for funders that size for them. Call 877-FUND-654 with any question. We call you back, usually the same business day, and we always talk with you before we shop your file.