Wow! That is a big question. Here is a short answer: If you are purchasing a bed and breakfast you will likely obtain financing from a bank. A small B&B with modest income is generally viewed as real estate: loan approval will be based on real estate value and your personal income and assets (your ability to repay the loan). A larger inn with significant revenue is viewed as a business: financing will be based on business value and revenue (ability to repay the loan) and is obtained from a commercial bank. The usual down payment required by a commercial lender is 20%-30% of the purchase price. Other loan sources are credit unions, economic development corporations and individuals (silent partners, the seller, etc.). Financing may come from a combination of sources and the SBA or USDA may participate.
Financing a bed and breakfast can be complex and this is a simplified answer to your question! If you have a specific scenario you would like to discuss, we would be happy to talk with you, so don’t hesitate to contact us.