Cambria Hotels has emerged as one of the most sought-after upscale hotel franchise opportunities in the U.S., attracting investors who want a premium brand with strong market positioning. Securing the right financing is the critical first step for any prospective franchisee, and understanding your options can mean the difference between a deal that closes and one that stalls.
In This Article
Cambria Hotels is an upscale hotel brand owned and operated under Choice Hotels International, one of the largest hotel franchise companies in the world. Launched in 2005, Cambria Hotels targets the upper-upscale segment of the lodging market, competing directly with brands like Marriott's Autograph Collection, Hilton's Curio Collection, and Hyatt Centric.
The brand differentiates itself through locally inspired design, premium amenities, and a focus on both business and leisure travelers. Each Cambria Hotels property is purpose-built or converted to fit the brand's design standards, featuring upscale lobbies, on-site dining, spa-quality fitness centers, and flexible meeting spaces. This is not a budget flag - it is a full-service, design-forward hotel brand that commands premium room rates in primary and secondary markets.
As of 2025, Cambria Hotels had more than 65 open properties across the United States, with dozens more in various stages of development. Choice Hotels International has made the brand a centerpiece of its upscale growth strategy, providing franchisees with strong corporate support, a national loyalty program through Choice Privileges, and global distribution through Online Travel Agencies (OTAs) and direct booking channels.
For investors, the Cambria Hotels franchise represents an opportunity to enter the upper-upscale hotel market with the backing of a publicly traded company (NYSE: CHH) that has been operating franchise systems for more than 70 years. According to Forbes, Choice Hotels consistently ranks among the top hotel franchise systems for franchisee support and return on investment.
Key Brand Highlights
Understanding the total investment required to open a Cambria Hotels is essential before approaching any lender. The costs associated with a Cambria Hotels franchise are substantial and reflect the brand's upscale positioning. Unlike a limited-service or select-service hotel brand, Cambria Hotels requires a full-service build-out or an extensive conversion of an existing property.
Based on the most recent Franchise Disclosure Document (FDD) data available, here is what prospective Cambria Hotels franchisees should expect to invest:
| Cost Category | Estimated Range |
|---|---|
| Initial Franchise Fee | $75,000 - $90,000 |
| Land Acquisition (varies by market) | $1,500,000 - $8,000,000+ |
| Construction / Conversion | $15,000,000 - $40,000,000+ |
| Furniture, Fixtures and Equipment (FF&E) | $2,000,000 - $6,000,000 |
| Technology and PMS Systems | $150,000 - $400,000 |
| Pre-Opening Working Capital | $500,000 - $1,500,000 |
| Soft Costs (Architecture, Legal, Permits) | $800,000 - $2,500,000 |
| Total Estimated Investment | $20,000,000 - $55,000,000+ |
Beyond the initial investment, Cambria Hotels franchisees pay ongoing fees to Choice Hotels International. These include a royalty fee of approximately 5.25% of gross room revenue, a marketing fee of around 3.2% of gross room revenue, and a technology fee for the brand's reservation system. These ongoing obligations should be factored into your cash flow projections when presenting a loan application to any lender.
The scale of this investment means most Cambria Hotels developments involve a combination of equity contribution from the owner or investor group and debt financing secured against the property and its projected income streams. Lenders will closely examine the market feasibility study, projected occupancy rates, Average Daily Rate (ADR), and Revenue Per Available Room (RevPAR) for the subject market before approving financing.
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Apply Now ->Financing a Cambria Hotels franchise is a multi-layered process that involves assembling a capital stack from multiple sources. Unlike a small retail franchise that might be funded with a single SBA loan, a full-service hotel development typically requires senior debt, mezzanine financing, and equity working in concert. The quality of your financing strategy will directly affect your project's timeline, profitability, and long-term success.
Here are the core components of a typical Cambria Hotels franchise financing structure:
Most commercial lenders require the borrower to contribute 20% to 35% of the total project cost in equity. For a $25 million Cambria development, that means the developer may need to bring $5 million to $8.75 million in cash or equivalent assets to the table. Equity can come from personal savings, investor partners, real estate equity, or a combination of sources. Choice Hotels and its affiliates do not offer direct financing, so the franchisee is responsible for assembling this equity component independently.
The largest single piece of the financing puzzle is the senior loan. For a new construction Cambria Hotels, this typically starts as a construction loan and converts to a permanent mortgage upon completion and stabilization. Construction loans are short-term (usually 18-36 months) and carry floating interest rates. Once the hotel is stabilized - typically defined as achieving consistent occupancy and meeting debt service requirements - the loan converts to a permanent mortgage with a 10 to 25-year amortization schedule.
The U.S. Small Business Administration (SBA) offers two primary loan programs that can be used for hotel franchise development: the SBA 7(a) loan and the SBA 504 loan. While both have size limitations that may restrict their use for the largest Cambria projects, they are highly effective for smaller conversions, renovations, or properties in secondary markets. Learn more about SBA loan programs and how they can be applied to hotel franchise financing.
When the senior loan does not cover the full amount needed, mezzanine financing fills the gap between senior debt and equity. Mezzanine lenders typically charge higher interest rates (often 10%-18%) in exchange for taking a subordinated position in the capital stack. Bridge loans serve a similar function during the construction or lease-up phase before permanent financing is secured.
Even after a Cambria Hotels property opens, franchisees need liquidity for day-to-day operations, seasonal cash flow gaps, and unexpected expenses. A business line of credit provides flexible access to capital that can be drawn and repaid as needed, making it an essential complement to any long-term financing structure.
Cambria Hotels Financing - Key Numbers at a Glance
$20M+
Minimum Total Investment
65%
Typical Senior LTV
5.25%
Royalty Fee (of Room Revenue)
18-36
Months - Construction Loan Term
65M+
Choice Privileges Members
The SBA 7(a) loan program is the most versatile and widely used SBA financing tool. For Cambria Hotels franchisees, SBA 7(a) loans can be used for real estate acquisition, construction, equipment purchases, working capital, and even franchise fees. The maximum loan amount is $5 million, which makes this program most applicable to smaller hotel conversions or renovations rather than large new-construction projects.
Key advantages of the SBA 7(a) program include lower down payment requirements (as low as 10%), longer repayment terms (up to 25 years for real estate), and competitive interest rates. The SBA does not lend directly - instead, the loans are issued by approved lenders such as banks, credit unions, and non-bank lenders. According to SBA.gov, the 7(a) program approved over $27 billion in loans in fiscal year 2023 alone, making it one of the most active commercial financing programs in the country.
The SBA 504 program is specifically designed for real estate and major equipment purchases. For hotel developers, this can be an effective way to finance the land and building portion of a Cambria Hotels project. The 504 structure involves a bank or lender covering 50% of the project cost, a Certified Development Company (CDC) providing 40% via an SBA-backed debenture, and the borrower contributing 10% as equity.
The SBA 504 program offers some of the lowest fixed interest rates available for commercial real estate, making it highly attractive for hotel developers with strong creditworthiness and sufficient equity. However, the maximum debenture amount is $5.5 million, which again limits its applicability to smaller Cambria projects or renovation financing.
For larger Cambria Hotels developments, conventional commercial real estate loans from banks and commercial lenders are the primary financing vehicle. These loans are not government-guaranteed, so they typically require stronger borrower qualifications, including higher credit scores, larger equity contributions (25%-35%), and demonstrated experience operating hotels or hospitality businesses.
Conventional hotel loans are evaluated on the projected performance of the property using metrics like RevPAR (Revenue Per Available Room), Net Operating Income (NOI), and Debt Service Coverage Ratio (DSCR). Lenders typically require a DSCR of at least 1.25x, meaning the property must generate at least 25% more income than is needed to service the debt. According to The Wall Street Journal, hotel financing has remained one of the more specialized segments of commercial real estate lending, with experienced operators receiving more favorable terms than first-time hotel developers.
Beyond the real estate and construction components, Cambria Hotels franchisees need to finance a significant amount of equipment. From commercial kitchen appliances and laundry systems to fitness equipment and AV technology for meeting rooms, the equipment budget alone can exceed $2 million. Equipment financing allows operators to spread these costs over 3-7 years, preserving working capital for operations.
Even seasoned hotel developers need access to flexible capital for operational needs. Small business loans from alternative lenders like Crestmont Capital can provide quick access to $10,000 to $5 million for a variety of business purposes, including hiring and training staff, marketing campaigns, technology upgrades, and unexpected capital expenditures. These loans are faster to approve and fund than traditional bank loans, making them a valuable tool for hotel operators managing fast-moving operational needs.
For franchisees who need capital beyond what construction and equipment financing provides, long-term business loans offer repayment periods that match the multi-year nature of hotel investment returns. These loans can be structured with terms up to 10 years or longer, providing the payment stability that hotel operators need when managing complex, capital-intensive businesses.
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Apply Now ->Qualification requirements for Cambria Hotels franchise financing vary depending on the type of loan you are pursuing. However, there are several baseline criteria that most lenders will evaluate regardless of the specific loan product.
Before any lender will consider your application, you must qualify as a franchisee with Choice Hotels International. Cambria Hotels requires prospective franchisees to demonstrate substantial financial capacity, relevant real estate or hospitality experience, and the operational infrastructure to open and manage a full-service hotel. Choice Hotels will conduct its own due diligence, including a review of your net worth, liquidity, and business experience.
For most construction and permanent hotel loans, lenders will evaluate the following:
Pro Tip: Prepare a Comprehensive Loan Package
Lenders reviewing hotel franchise loans want to see your full business plan, market feasibility study, personal financial statements, tax returns for 2-3 years, a detailed construction budget, and a pro forma income statement projecting 3-5 years of hotel operations. The more complete your package, the faster and more favorably lenders will respond.
Crestmont Capital has been helping hotel franchisees and hospitality investors access the capital they need since our founding. As the #1 business lender in the United States, we offer a broad range of financing solutions specifically designed to meet the complex, multi-layered needs of hotel franchise developers and operators.
Our expertise in franchise financing means we understand the unique aspects of the Cambria Hotels business model - from the capital intensity of new construction to the working capital demands of running a full-service hotel operation. We work with franchisees at every stage of the development cycle, from pre-opening to stabilization and beyond.
Here is what sets Crestmont Capital apart for Cambria Hotels franchise applicants:
If you are already operating a hotel and considering whether a Cambria Hotels conversion makes sense, you may want to compare this opportunity with other upscale hotel franchises. Our guides on the Hilton Garden Inn franchise loan and the DoubleTree by Hilton franchise loan provide comparable breakdowns to help you evaluate your options. According to CNBC, upscale hotel franchise investments have shown resilience in post-pandemic travel markets, with premium brands recovering faster than budget segments.
To illustrate how Cambria Hotels franchise financing works in practice, here are five representative scenarios based on common development situations that hotel investors encounter.
An experienced hotel developer wants to build a 160-room Cambria Hotels in a major metropolitan market. Total project cost is estimated at $38 million. The developer brings $10 million in equity (26% of total cost). A senior construction loan covers $22 million (58% LTV). A mezzanine lender provides $6 million to bridge the gap. At stabilization, the construction loan is replaced by a permanent mortgage from a life insurance company or CMBS lender.
A real estate investor acquires a vacant office building in a growing secondary market for $4 million and plans to convert it into a 120-room Cambria Hotels at an all-in cost of $22 million. The conversion qualifies for SBA 504 financing, which covers the first $5.5 million via the CDC debenture. A bank provides the remaining senior debt, and the investor contributes $3 million in equity. The SBA structure allows the investor to preserve more liquidity than a conventional loan would require.
An investor group identifies an existing Cambria Hotels property being sold by its original developer. The purchase price is $18 million for a 145-room hotel that has been operating for three years and is achieving 72% occupancy. The group secures a conventional hotel acquisition loan at 65% LTV ($11.7 million), contributes $5 million in equity, and uses a $1.3 million bridge loan from Crestmont Capital to cover the gap during the closing process. The bridge loan is repaid within 6 months from operating cash flow.
A hotel owner with an existing upscale property wants to convert it to the Cambria Hotels brand. The property is valued at $12 million and requires $3.5 million in renovations to meet Cambria Hotels brand standards. The owner uses an equity line against the existing property to fund $1.5 million of the renovation and secures a $2 million equipment financing package from Crestmont Capital to cover FF&E. The renovation is completed in 18 months and the property opens under the Cambria banner at full brand standards.
A developer has secured all construction financing for a new Cambria Hotels but realizes they need additional working capital during the pre-opening period. They need funds to hire and train staff, launch a digital marketing campaign, set up the technology infrastructure, and cover operating costs during the soft opening period. Crestmont Capital provides a $750,000 working capital loan that is repaid from the hotel's operating revenue within the first 18 months of operation. The fast approval and flexible terms allow the developer to focus on the hotel opening rather than worrying about short-term cash needs.
The minimum total investment for a Cambria Hotels franchise is approximately $20 million, though most new construction projects in primary markets cost $30 million to $55 million or more. This includes land, construction, FF&E, franchise fees, pre-opening costs, and working capital. The actual amount depends heavily on the market, the size of the property, and whether you are building new or converting an existing building.
Yes, but with limitations. The SBA 7(a) program has a maximum loan amount of $5 million, and the SBA 504 program has a maximum debenture of $5.5 million. These programs are most applicable to smaller conversions, targeted renovations, or working capital components of a larger project. For a full new-construction Cambria Hotels, SBA financing typically covers only a portion of the total capital stack.
Most senior lenders require a minimum equity contribution of 25% to 35% of the total project cost for hotel development loans. For a $25 million project, that means bringing $6.25 million to $8.75 million in equity. SBA-backed loans may require as little as 10% equity, which can make them attractive for qualified borrowers. Higher equity contributions generally result in more favorable interest rates and terms.
Most conventional hotel lenders prefer borrowers with personal credit scores of 680 or above. SBA lenders may work with scores as low as 640. For alternative financing products like working capital loans or equipment financing, minimum credit scores can be as low as 550-600 depending on the lender and other factors such as revenue, time in business, and collateral.
Choice Hotels International does not offer direct financing to franchisees. The company does provide access to its network of preferred lenders who are familiar with the Cambria Hotels brand and have experience underwriting Choice Hotels franchise projects. However, franchisees are responsible for securing their own financing through these or other sources.
Approval timelines vary significantly by loan type. SBA loans typically take 30-90 days from application to approval. Conventional construction loans can take 45-120 days due to the appraisal, environmental review, and legal documentation required. Alternative lenders like Crestmont Capital can approve working capital and equipment financing in as little as 24-72 hours. Starting the financing process early and having a complete application package ready will minimize delays.
Cambria Hotels franchisees pay a royalty fee of approximately 5.25% of gross room revenue, a marketing fee of approximately 3.2% of gross room revenue, and a technology fee for the Choice Hotels reservation system. Total ongoing fees typically represent 9%-11% of gross room revenue, which should be factored into your cash flow projections and DSCR calculations.
Yes. Renovation financing for Cambria Hotels can take several forms, including SBA loans, conventional commercial renovation loans, and alternative business loans. If the renovation budget is under $5 million, SBA 7(a) or SBA 504 financing may be available. For larger renovations, a commercial real estate renovation loan from a bank or private lender is typically more appropriate. Crestmont Capital can also provide business loans for smaller renovation components or FF&E replacements.
Debt Service Coverage Ratio (DSCR) measures a property's ability to generate enough income to cover its debt payments. It is calculated by dividing the Net Operating Income (NOI) by the annual debt service (principal plus interest). Most hotel lenders require a minimum DSCR of 1.25x, meaning the hotel must generate at least 25% more income than its debt payments. A DSCR below 1.0x means the property cannot cover its debt from operations alone, which is a significant red flag for lenders.
As of 2025, Cambria Hotels has more than 65 open properties in the United States, with additional properties in various stages of development. Choice Hotels International has identified Cambria Hotels as a key growth brand for its upscale expansion strategy, targeting primary markets and high-demand secondary markets across the country.
A construction loan is a short-term, often interest-only loan that covers the costs of building or renovating a hotel. Construction loans typically have terms of 18-36 months and floating interest rates. Once the hotel is built and reaches stabilized occupancy (usually 60%-70%), the construction loan is paid off with a permanent loan - a longer-term mortgage with a fixed or floating rate and a 10-25 year amortization. Some lenders offer "construction-to-perm" products that automatically convert without requiring the borrower to refinance.
Most lenders and the Cambria Hotels franchisor prefer borrowers with prior hotel ownership or management experience. First-time hotel investors can still qualify, but they may face more scrutiny, higher down payment requirements, and less favorable terms. Partnering with an experienced hotel operator or management company can help first-time investors overcome this barrier and improve their financing options.
Cambria Hotels targets urban infill locations, college towns, resort destinations, and high-demand suburban markets with strong corporate and leisure demand generators. The brand has expanded beyond major gateway cities into high-growth secondary markets, making it accessible to investors who may not have the capital for a New York City or San Francisco development but can still deliver strong returns in markets like Nashville, Scottsdale, or Raleigh.
Yes. Mezzanine financing is commonly used in hotel development when senior debt does not cover the full project cost and the developer wants to minimize equity dilution. Mezzanine lenders take a subordinated position in the capital stack and typically charge higher interest rates (10%-18%) in exchange for the increased risk. For Cambria Hotels projects, mezzanine financing is most commonly used on new construction deals where the total cost exceeds what senior lenders will finance at their standard LTV ratios.
Crestmont Capital helps hotel franchise investors by providing fast access to a wide range of financing products, including SBA loans, conventional commercial loans, equipment financing, business lines of credit, and working capital loans. Our team of hotel financing specialists works with borrowers at every stage of the development cycle - from pre-development planning to post-opening operations - to ensure they have the capital they need to succeed.
Opening a Cambria Hotels franchise is one of the most substantial investments an entrepreneur or real estate developer can pursue in the hospitality sector. The brand's premium positioning, strong corporate support from Choice Hotels International, and growing national footprint make it an attractive franchise opportunity - but the capital requirements demand careful planning and a sophisticated financing strategy.
Whether you are assembling a capital stack for new construction, seeking SBA financing for a conversion project, or simply need working capital to support a pre-opening period, understanding your options is the critical first step. According to Bloomberg, upper-upscale hotel investments have demonstrated strong risk-adjusted returns in recent years, driven by robust travel demand and limited new supply in key markets.
Crestmont Capital is here to help you navigate every stage of the financing process. Our team of hotel and franchise financing specialists will work with you to structure the right combination of debt, equity, and working capital to bring your Cambria Hotels vision to life. Apply today and take the first step toward owning one of America's most recognized upscale hotel brands.
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Apply Now ->Disclaimer: The information provided in this article is for general educational purposes only and is not financial, legal, or tax advice. Funding terms, qualifications, and product availability may vary and are subject to change without notice. Crestmont Capital does not guarantee approval, rates, or specific outcomes. For personalized information about your business funding options, contact our team directly.