Madera, CA motels and hotels pay for room upgrades and equipment with a mix of funding: equipment financing for televisions, room furniture and laundry machines, a term loan for movable lobby and breakfast furnishings, and working capital for payroll and supplies when bookings dip; fixed exterior work and heating and cooling units are excluded. Buying or refinancing the property is outside what Elkmont arranges; the rest goes to funding partners, who review and decide.
An Elkmont Loans article on equipment financing, term loans and working capital for Madera, California motels and hotels.
Room furniture, televisions and linens
A guest room holds three kinds of cost with different lives. The television and the mini-fridge are equipment with serial numbers; the through-wall heating and cooling unit is a building system outside this site. Beds, dressers, desks and seating are the furniture, fixtures and equipment a brand or an inspector calls FF&E. Linens and towels are supplies that are used up within a year or two. The first two groups can go on equipment financing; linens are better bought from working capital or a credit line, because they are gone before an agreement would end.
Illustration only, invented figures: a 24-room motel replaces every room's television and mini-fridge set at $1,180 each, delivered, and the case goods at $2,350 a room: $28,320 plus $56,400, $84,720 in all. On 60-month equipment financing at an annual rate of 10.5%, the payment is $1,820.96 a month, about $76 per room per month by our arithmetic, and the 60 payments total $109,258. A partner may treat the television sets and the furniture as separate items with different useful lives. The equipment financing page sets out loans, leases and finance agreements for lodging equipment.
An on-site laundry is equipment as well. Commercial washer-extractors and dryers come with serial numbers and a dealer quote, and their monthly payment can be set beside what the motel pays an outside linen service. Where the payment is the smaller of the two, the difference still has to cover water, gas and the staff hours to run the machines, so that comparison is worth working out before the quote is signed.
Lobby furniture, signs and outdoor seating
Movable sign equipment, freestanding lobby seating, breakfast furniture and removable lighting can be itemized on a term loan; exterior paint, parking lot resurfacing and other fixed property work are excluded. A branded property may have a property improvement plan from its franchisor that lists required upgrades and dates; the request should identify eligible movable items and equipment, not fixed property work.
Illustration only, invented figures: a motel plans $38,000 of movable lobby furniture, a $14,500 freestanding sign, $22,000 of removable outdoor seating and $31,500 of movable breakfast-area furnishings, $106,000 together. The $106,000 movable lobby package has an $1,801.07 monthly payment at 10.75% for 84 months. It repays $151,290, including $45,290 of interest. How a business term loan is set up and paid back has its own page.
Payroll and supplies during slower weeks
Housekeeping, the front desk and maintenance are paid every pay period whether the rooms are full or not, while revenue moves with occupancy night by night. A few slower weeks can leave a motel short for payroll, laundry supplies and utilities even when the year as a whole is sound.
Illustration only, invented figures: a 40-room motel that runs at 70% occupancy at an average rate of $92 a night falls to 52% for three weeks. Over those 21 nights it sells about $13,910 less in rooms, by our arithmetic. Its biweekly payroll is $9,600, and three weeks hold 1 or 2 paydays, depending on where the first one falls. A working capital loan sized to that shortfall carries the payroll until occupancy returns, and its schedule is known from the start.
The county's lodging businesses carry real payrolls: 25 of the 37 traveler accommodation establishments in Madera County, CA had five or more employees in 2023, 67.6% by our arithmetic from County Business Patterns (12 had fewer than five; NAICS 7211, which covers hotels, motels and similar lodging).
What a lender reviews from a motel owner
Each funding partner applies its own requirements when reviewing the motel request. Items a partner can look at from a motel or hotel owner:
- Monthly property-management reports covering occupancy and the average daily rate
- Business bank statements showing room-revenue deposits
- Recent business tax returns and a profit and loss statement for the year to date
- For a branded property, the franchise agreement and any property improvement plan
- The deed or ground lease, and the payment on any existing mortgage
- Vendor quotes for the furniture and equipment
- The property insurance declarations page
The mortgage matters to a partner because its payment comes out of the same room revenue, even though Elkmont does not arrange mortgages or property purchases. County lodging figures and more funding notes are on the hotel and motel funding page; the request form starts a request, and the Elkmont blog has articles for other trades.
By Elkmont Loans · Updated
