Commercial Real Estate Construction Loans

Build Your Hotel — Construction Loans From $5M to $30M

Draw-based, interest-only financing for experienced hotel sponsors — built around your brand standards and real-world ramp-up, and structured around your exit from day one. Get a soft quote in 1-2 business days.

Apply for a Loan →Schedule a Call

Night cityscape showing a lit building under construction with crane, railway tracks, and nearby high-rises.

Since 2002 · $6.5B+ Funded · $1B AUM

Ground-Up, Expansion & Major Renovation Financing

Construction financing funds the full cost of building or improving a hotel — disbursed in stages, called draws, tied to verified milestones as work is completed and inspected. That keeps costs in check and capital in step with real progress.

Built for experienced hotel sponsors, our flexible draw-based financing is structured around your brand requirements and exit — an SBA 504 take-out, a conventional term loan, or a sale at stabilization.

Sponsors use AVANA construction financing to:

Build franchised hotels from the ground up
Fund major renovations or PIPs ahead of stabilization
Complete brand conversions or flag changes
Expand existing hotels — added keys, floors, or amenities
Bridge to an SBA 504 or conventional permanent take-out

Draw-Based, Interest-Only Structures

Borrow only as you build. Interest is charged on drawn funds only — not the full committed amount — keeping your carry cost low while construction progresses

Speed & Certainty of Execution

Soft quote within 1–2 business days. LOI typically within 3–5 days of complete pre-qualification materials. No drawn-out maybe that stalls your start date

Flexible Terms Up to 3 Years

Interest-only terms with annual extension options to accommodate construction delays, slower lease-up, or pre-opening ramp periods

Structured for Your Take-Out

Loans are designed from day one around your exit — SBA 504, conventional term, or sale — so there are no structural surprises when construction completes

Construction Loans Rates and Terms

AVANA offers construction financing through two programs with distinct pricing, structures, and eligible project types. Both are interest-only with draw-based disbursements. All rates are indicative — contact us for a project-specific quote.

Interest rates

1-Month Term SOFR
+ 4.50%–7.00%

AVANA Oaktree Private Credit Partnership

1-Month Term SOFR + 4.00%. Floor of 8.00%

AVANA-IHG Co-Lending Construction Program

LTV

Up to 75% Total

Based on up to 75% of “as-is” value or 70% of “as-stabilized” value

Loan amount

$5MM - $30MM

Designed to fund mid- to large-scale commercial real estate projects

Loan terms

Up to 3 Years

Interest-only loans with annual extension options

Uses of proceeds

Construction

Financing available for hospitality construction projects

What We Finance

Franchise Hotels →

Ground-up builds, brand conversions, and major renovations for franchised hotels within preferred IHG brands: Holiday Inn, Holiday Inn Express, EVEN Hotels, Avid Hotels, Atwell Suites

Who We Fund

Our construction programs are built for experienced hotel sponsors with a validated plan and a clear path to stabilization. You're a strong fit if:

You have a track record — 5+ years operating in hospitality or commercial real estate

Your credit is strong — 680+ FICO

Your deal is $5M–$30M — structured through the AVANA Oaktree or AVANA–IHG program

You bring equity — we finance up to 75% of as-is value, or 70% of as-stabilized

You have an exit — SBA 504 take-out, conventional term loan, or sale at stabilization

Full-recourse guaranty from principals

Checks these boxes? Get a soft quote →

Young man in brown suit jacket standing outside a multi-story building with windows and air conditioners.

Strategic Partnerships: Oaktree & IHG

Hotel entrance with large pillars, palm trees, and evening lighting under blue sky.

Through the AVANA Oaktree Private Credit Partnership, AVANA delivers institutional-grade construction financing to experienced hotel sponsors, combining AVANA's sector expertise with Oaktree's private credit platform.

The AVANA–IHG Co-Lending Construction Program offers tailored structures for IHG-branded hotel projects, giving qualified sponsors a specialized lending solution aligned with brand standards and ramp-up expectations.

These partnerships help accelerate funding timelines, sharpen pricing, and create co-investment opportunities for aligned investors.

A Streamlined Process

We make financing simple, transparent, and fast from application to funding

Submit Application

Submit your application with pre-qualification documents. We’ll review and issue a soft quote within 1-2 business days

Review

We review initial documents and confirm loan structure and key terms. If the deal meets criteria, we issue a Letter of Intent with proposed terms

Approval & Terms

We complete underwriting and order third-party reports as needed. Credit team issues final approval when complete (timing can vary)

Closing & Funding

We prepare final loan documents, open escrow, and coordinate closing. Funds are released once closing requirements are met

Proven Success Stories

We’ve helped businesses across industries

Featured

January 10, 2023

Cannabis Chain Store

Loan Purpose:

Construction

Asset Class:

Cannabis

Loan Amount:

$8,000,000

Featured

November 9, 2022

82-Room Hotel Deal

Loan Purpose:

Construction

Asset Class:

Hotel

Loan Amount:

$12,500,000

Frequently Asked Questions

Find answers to common questions

What types of construction projects do you finance?

We fund ground-up builds, expansions, brand conversions, and major renovations for experienced sponsors of franchised hotels — including preferred IHG brands such as Holiday Inn, Holiday Inn Express, EVEN Hotels, Avid Hotels, and Atwell Suites. Each project should have a clear business plan, a validated construction budget, a confirmed general contractor, and a defined route to stabilization — a sale, SBA 504 take-out, or conventional term loan refinance.

What are the typical loan amounts, leverage, terms, and pricing?

Construction loans range from $5M to $30M with leverage up to 75% of as-is value or 70% of as-stabilized value. Terms are up to 3 years, structured as interest-only, with annual extension options. Pricing is floating over 1-Month SOFR: the AVANA Oaktree program ranges from SOFR + 4.50%–7.00%; the AVANA–IHG program starts at SOFR + 4.00% with a floor of 8.00%. An origination fee and exit fee apply — contact us for project-specific terms.

How long does it take to close, and how do construction draws work?

From a signed LOI, expect to close within approximately 45 days. Timeline is primarily driven by third-party reports — appraisal, environmental, and property condition assessment. After closing, proceeds are disbursed in stages called draws, tied to verified construction milestones supported by inspection reports and lien waivers from contractors and subcontractors. Sponsors with permits in hand, a confirmed GC, and organized pre-closing documentation typically move faster.

Can construction financing pair with SBA or permanent debt?

Yes — and for most sponsors this is the intended structure. Many borrowers arrange their permanent take-out (SBA 504 or conventional term loan) before construction begins and use the construction loan as interim financing. We can align the construction loan term, extension provisions, and interest reserve sizing to your expected permanent financing timeline — reducing structural friction at maturity and avoiding duplicate diligence where possible.

How does the AVANA Oaktree Private Credit Partnership help with construction deals?

The AVANA Oaktree Private Credit Partnership provides the institutional capital behind our hotel construction lending — $5M to $30M, interest-only for up to 3 years with annual extensions, priced at 1-Month SOFR + 4.50%–7.00%. Oaktree's private credit platform brings capital depth and institutional structuring, while AVANA brings hotel-sector expertise and speed of execution.

What are the terms for the AVANA–IHG Co-Lending Construction Program?

The AVANA–IHG Co-Lending Construction Program supports IHG-branded hotel construction with loan amounts from $5M to $30M, terms up to 3 years plus annual extensions, and rates starting at 1-Month SOFR + 4.00% with a floor of 8.00%. Loans are interest-only, secured by a senior first mortgage, with leverage up to 75% of as-is value or 70% of as-stabilized value. An origination fee of 2.0% and exit fee of 1.0% apply. Minimum 680 FICO, 5+ years sponsor experience, and a top 200 US market location required.

Ready to Build? Let's Start Your Loan

Submit a short pre-qualification and our hotel construction lending team will respond within 1–2 business days with a soft quote. Tell us the brand, location, total project cost, and your exit plan — that's all we need to get started.

Apply for a Loan →Schedule a Call ↗

Insights

May 28, 2026

When the SBA Process Gets Complicated, You Need a Lender Who Has Been There Before



Education

May 5, 2026

White Paper: How Credit Unions Can Serve the Real Estate Financing Needs of Younger Business Owners



Education

April 3, 2026

What Kills a Multifamily Deal Late in the Process and How Brokers Can Prevent It



Education

Our Team

About Sanat Patel

As Chief Lending Officer at AVANA Companies and Chair of the Board at AVANA Bank, Sanat Patel brings more than three decades of experience in financial services, private credit and commercial banking, with a proven track record in loan structuring, risk management, and balance sheet growth. Sanat has led strategic initiatives that connect institutional capital with entrepreneurial ambition, supporting the growth of businesses, and owners engaged in commercial real estate across the U.S. He has built and scaled lending platforms in partnership with banks and credit unions, developing tailored financial solutions that drive job creation and foster inclusive economic development.

Sanat Patel

Chief Lending Officer

Topics

Audiences

Topics

Audiences

Commercial Real Estate Construction Loans

Build Your Hotel — Construction Loans From $5M to $30M