Motel property loans

Ardent Capital Group brings the same method to every client: execution and strategy, clear advice for smart lending, and long-term growth. That means the right lender, structure and timing, straight advice so you borrow with confidence, and today's deal built toward where you want to be tomorrow. We are specialists in helping business owners secure finance to purchase their own property, and we understand the complex structures that often sit around it, including multiple trusts, holding companies and self-managed super funds. Motels bring their own questions around income, occupancy and whether the deal takes in the going concern, so the funding is set so repayments sit comfortably against the trade the motel actually does. We stay in your corner as the business finds its feet and the next opportunity comes up. We work from Sydney and lend Australia-wide, and our commercial property loans in Sydney page covers that market in detail. Every figure is subject to serviceability, lender appetite and approval.

It is the first thing to settle, because it changes everything else. A freehold going concern means you buy the land, the buildings, the guest units, the trading business and the attached residence as one asset, funded at 50% to 65% of value. A leasehold motel means you buy only the business and the right to trade, while a separate freeholder keeps the buildings and charges you rent. Leasehold is far cheaper to enter, lends at roughly 40% to 50%, and gives you no bricks and mortar to fall back on. Buyers routinely compare a leasehold price against a freehold price without realising they are looking at two different assets.

Motel funding runs from $50K up to $30M, which reaches from a small highway property to a larger site with restaurant and conference space. Room count, occupancy and whether you buy freehold or a leasehold interest all matter.

A leasehold motel is funded against the business, the furniture and the lease itself, not against land, so the lender is exposed if the lease ends. That is why the loan term cannot exceed the years remaining on the lease, including options you can genuinely exercise. A motel with nine years left will not carry a fifteen year loan, and that shorter term lifts the repayment materially. Funding usually sits around 40% to 50%, many major banks decline leasehold outright, and the pricing generally comes from the non-bank market. On a leasehold motel the remaining lease sets how far the funding can stretch, so we check it first and structure the loan to the years you have.

On a freehold going concern the residence is included, and it is valued and mortgaged as part of the motel rather than as a separate house on its own title. Most motels are bought by owner-operators who move in, and lenders are comfortable with that because a family living on site removes a manager wage from the cost base. You do not have to live there, but a motel run by a paid manager reads differently to a credit team, since the wage comes straight off the profit that services your loan. One thing to check early is that the residence has council approval as part of the motel use, because an unapproved one causes real trouble at valuation.

A motel freehold going concern is generally funded to 50% to 65% of value, so a deposit of 35% to 45% is common, and a leasehold motel sits lower at around 40% to 50%. Which of the two you are buying is the main lever. With extra security, a cross-collateralised structure can reach up to 100% of the price. The exact number depends on your file, so talk to us.

By a specialist motel valuer, on the trade. The valuation capitalises the earnings of the going concern, which is why two motels with the same number of rooms can value very differently. The valuer reviews the trading financials, the occupancy and room rate history, the age and condition of the units, the residence, the location and comparable motel sales. Because the value follows the earnings, a motel that genuinely lifts its occupancy becomes worth more, and that is how a revaluation and an equity release become possible later.

Yes, and it is one of the first things an assessor looks for. Passing traffic, a regional hospital, a showground, a university or a major worksite nearby all feed midweek room nights from contractors, sales reps and visiting families, and that is steadier income than tourism alone. The flip side is that lenders check for a planned highway bypass or road realignment, because a bypass can take the trade away overnight. Distance from a major centre also narrows the pool of future buyers, and some lenders apply a population or postcode limit that rules out very remote motels.

Two to three years of business financial statements and tax returns for the motel, BAS lodgements, and occupancy and room rate reports from the booking system. Lenders also want relevant accommodation or management experience, because a motel is a business you live inside, not a passive property. Motels are the most common first accommodation purchase in Australia, so lenders are more open to a capable newcomer here than they are on a large hotel, particularly where the buyer has run a small business before. Where the motel has traded under a previous owner, the vendor's figures are the starting point, and we help you interrogate them before you rely on them.

For a full-doc application, most lenders want two to three years of business financial statements and tax returns, personal tax returns for all guarantors, the contract of sale, the lease if you are buying a leasehold motel, and the occupancy and room revenue reports. Plenty of motel owners do not fit a standard full-doc assessment neatly. Alt-doc and low-doc routes exist, supported by an accountant's declaration, BAS lodgements and business bank statements, at a slightly higher rate. We work through your income situation upfront to identify the best approach.

Yes, it is possible, and we arrange these. It is also one of the more intricate purchases in commercial finance, and the detail is what decides whether it works. The fund borrows under a limited recourse borrowing arrangement, so the motel sits in a separate holding trust and the lender can only come after that one property. From 10 August 2026 a new arrangement can only be used for business real property: a trading motel generally qualifies, and the ATO treats a manager's residence at a motel as incidental to the business. Who lives in that residence, and why, is the question that needs answering. Your operating company leases the motel back from the fund, in writing, at market rent supported by an independent appraisal, and the rent has to actually be paid. Cross-collateralisation is not available inside super, so the fund needs its own deposit and the 100% LVR structures described elsewhere on this page do not work here. Lenders cap SMSF lending below a standard purchase, generally between 65% and 75%, and want cash left in the fund after settlement. We know this sounds complicated, and we can assist to make things clearer. Reach out to our team and we will guide you through the entire process. We structure the finance, tell you which lenders will take a motel as SMSF security and on what terms, and bring in the SMSF specialists and licensed advisers who set the fund side up. You will not be working it out on your own. Get that right and it is a solid, compliant structure. Our SMSF hospitality and accommodation page covers how a fund buys a venue freehold and leases it back to the company that runs it.

Often, yes. A decline usually means the motel went to a lender whose appetite did not match the asset, not that the motel is unfundable. Banks are cautious on leasehold motels, on regional postcodes and on buyers with no accommodation background, and several have quietly narrowed their criteria. Non-bank and specialist lenders assess motels differently and are frequently more comfortable with going-concern structures, leasehold interests and shorter trading histories. We will give you a straight answer on whether it is fundable elsewhere.

Yes, and it is one of the most common reasons motel owners come back to us. A room refurbishment can be built into the facility or drawn against progress invoices as rooms come back online, and lenders prefer a staged plan that keeps part of the motel trading rather than shutting the doors. Furniture and fittings, commercial laundry, pool plant and highway signage can also be funded separately by chattel mortgage rather than capitalised into the property loan. Where the trade has grown since you bought, a revaluation often releases the equity to pay for it.

Going direct means one lender's appetite and one set of criteria. Motels are a sector where appetite varies enormously: some banks will not touch a leasehold motel, others have postcode limits that quietly rule out the regional towns where the best motels trade, and a few are actively writing them. A specialist broker knows which lenders are genuinely writing motels this quarter and how each one reads a going concern with a residence attached. Presenting a motel to the wrong credit team is how a fundable purchase gets declined.

Most of the time, no. Where a purchase requires significant preparation due to its complexity, a small mandate fee may apply, and we will always be upfront about this before any work begins.

Although we are based in Sydney, we service clients across all major Australian cities, including Melbourne, Perth, Brisbane, the Gold Coast, Adelaide, Canberra and Hobart, along with their surrounding regional areas. Wherever your motel is located, we can arrange your finance.

Although our main speciality is property loans for business owners, we also assist with motel fit-out finance and working capital for motels. On asset finance, that covers guest room furniture and fittings, commercial laundry equipment, pool plant, reception and booking technology, and highway signage. On working capital, we arrange business overdrafts, lines of credit and cash-flow funding to cover the off-peak trough, a refurbishment between peak periods, and wages. We also arrange home loans, planned alongside your commercial borrowing: cross collateralisation, guarantees, shortfalls and trust income included. See home loans for business owners. Where you are developing rather than buying, we also arrange motel development finance.

Yes. That is our core ethos, helping you understand the right strategy, structure and clear advice from the very first conversation. Our main borrower profiles are motel owner-operators and accommodation buyers seeking finance from $50,000 upwards, and a motel is very often a first commercial purchase, so it is well within our wheelhouse. We will walk you through the freehold and leasehold difference, the deposit you will genuinely need, and what the lender will ask for, before you commit to anything.

No. Arranging finance and advising on financial products are two different disciplines, and we do the first. What we bring is the credit analysis lenders require, the structuring of the facility, and the strategy for putting your application in front of lenders whose appetite matches it.

Because we act as a credit representative under an Australian Credit Licence, we do not give financial product, superannuation, taxation or legal advice, and nothing we provide should be taken as such. Where your circumstances need that input, we are happy to work with your accountant, financial adviser and solicitor to understand the full picture before anything is submitted.

The information on this page is general in nature and does not take account of your objectives, financial situation or needs.