Drury Hotels is one of America's most respected family-owned hotel brands, known for its exceptional guest experience, consistent service standards, and strong occupancy rates. If you're looking to invest in or expand a Drury Hotels property, securing the right financing is the critical first step. This comprehensive guide covers everything you need to know about Drury Hotels franchise loans, from startup costs to qualification requirements and beyond.
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Drury Hotels is a privately-held, family-owned hotel company headquartered in St. Louis, Missouri. Founded in 1973 by Charles Drury, the company has grown into a chain of more than 150 hotels spanning 25+ states across the United States. Unlike many major hotel brands that aggressively franchise their properties, Drury Hotels operates under a more selective model that maintains tighter quality control and brand standards.
Drury Hotels operates several brand types under its umbrella, including:
What sets Drury Hotels apart in a crowded marketplace is its commitment to an all-inclusive guest experience. The brand's famous "5:30 Kickback" offers evening beverages and hot foods to guests at no extra charge. Complimentary hot breakfast is also standard at most properties. These signature amenities consistently earn Drury Hotels among the highest guest satisfaction scores in the industry, including multiple J.D. Power Awards for hotel satisfaction.
From a business perspective, Drury Hotels properties have historically demonstrated strong performance metrics. The brand's reputation for reliability and value tends to attract a loyal corporate traveler base alongside leisure guests, providing revenue stability even during economic downturns. According to data from the American Hotel & Lodging Association (AHLA), midscale and upper-midscale hotel properties like those in the Drury portfolio have shown consistent RevPAR (Revenue Per Available Room) growth in recent years, outperforming many other segments of the lodging industry.
For investors, a Drury Hotels property represents a stable, well-branded hospitality investment backed by decades of operational expertise and a loyal customer base. Whether you're acquiring an existing Drury property or pursuing new development, understanding your financing options is essential to making this investment work.
Understanding the total investment required for a Drury Hotels property is the first step in planning your financing strategy. Drury Hotels operates primarily as an owner-operator company, meaning many properties are company-owned. However, the brand does work with select third-party investors and developers in specific markets. Investment costs will vary significantly based on property type, location, existing infrastructure, and market conditions.
Here is a breakdown of typical cost categories for a Drury Hotels property investment:
For investors looking to acquire an existing Drury Hotels property or convert an existing hotel to the Drury brand, acquisition costs typically range from $3 million to $30 million or more, depending on property size, location, and market positioning. Prime urban markets and larger properties command premium valuations.
Ground-up development of a Drury Inn & Suites property typically involves the following cost categories:
For a mid-size Drury Inn & Suites with 150 rooms, total project costs could range from $15 million to $35 million. A larger Drury Plaza Hotel in an urban market could easily exceed $50 million to $100 million when factoring in premium land costs, high-end finishes, and full-service amenities.
Investors acquiring existing hotels that will convert to or maintain a Drury brand often must execute a Property Improvement Plan (PIP). PIP costs typically range from $5,000 to $25,000+ per room, depending on the current condition of the property and the gap between existing standards and brand requirements.
Beyond the initial capital investment, operators must plan for ongoing operational costs including:
Given these investment levels, virtually all Drury Hotels property investments require substantial commercial financing. That's where working with an experienced lender like Crestmont Capital becomes invaluable.
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Apply Now - Free ConsultationHotel property investments of the scale required for a Drury Hotels property involve sophisticated financing structures. Here are the primary financing vehicles available to Drury Hotels investors and operators:
Commercial Mortgage-Backed Securities (CMBS) loans and traditional balance sheet hotel loans from banks and insurance companies are the most common financing vehicles for hotel acquisitions and refinancings. These loans typically feature:
The Small Business Administration's 7(a) loan program can be used for hotel property acquisitions and improvements under certain conditions. SBA 7(a) loans offer competitive terms with government-backed guarantees that reduce lender risk and improve borrower access to capital. Key features include:
The SBA 7(a) program is particularly well-suited for smaller Pear Tree Inn by Drury properties or partial financing needs.
For owner-operators looking to acquire real estate used in their hotel operations, the SBA 504 loan program provides long-term, fixed-rate financing at below-market rates. The program works with a Certified Development Company (CDC) partner and is structured as:
This structure provides access to larger financing with lower down payments than many conventional hotel loans.
New development projects require construction loans that convert to permanent financing upon completion. Hotel construction loans typically feature:
Bridge loans provide short-term financing (typically 12-36 months) for hotel acquisitions, repositioning, renovations, and other transitional situations. They're particularly useful when:
Beyond property acquisition and development, hotel operators often need working capital to fund pre-opening expenses, seasonal cash flow gaps, equipment purchases, and other operational needs. Small business loans and business lines of credit from alternative lenders like Crestmont Capital can provide the flexible working capital hotel operators need to grow.
Hotel properties require significant investment in equipment ranging from commercial kitchen equipment and laundry systems to HVAC systems and technology infrastructure. Equipment financing allows operators to spread these costs over time without tying up working capital or diluting equity.
Understanding how hotel financing is structured helps investors make better decisions and negotiate more favorable terms. Here's a detailed look at how Drury Hotels property loans work from application through funding:
Hotel loans, particularly for branded properties like Drury, involve a more detailed underwriting process than standard commercial real estate loans. Lenders evaluate both the real estate itself and the operating business that generates revenue from the property.
Before submitting a formal loan application, lenders will typically want to review:
Lenders commission detailed analyses of the hotel property and its competitive market, including:
Hotel loan underwriting focuses heavily on the property's income-generating ability. Key metrics lenders analyze include:
Once underwriting is complete, the lender issues a term sheet outlining the proposed loan terms including amount, interest rate, LTV, amortization schedule, recourse/non-recourse provisions, and covenants. Negotiating favorable terms requires experience with hotel lending nuances.
Hotel loan closings involve extensive documentation including the loan agreement, mortgage/deed of trust, assignment of leases and rents, environmental indemnity, and various other security documents. Closings typically take 45-90 days for conventional hotel loans.
Crestmont Capital is a leading business financing provider helping hospitality investors and hotel operators across the United States access the capital they need to grow. Whether you're acquiring your first Drury Hotels property, executing a renovation to meet brand standards, or expanding your portfolio, Crestmont Capital has financing solutions designed for the hospitality industry.
Unlike banks that treat hotel loans as a niche product, Crestmont Capital's team specializes in hospitality financing. We understand the seasonal cash flows of the hotel business, the unique underwriting requirements for branded hotel properties, and the operational capital needs that hotel owners face throughout the year.
Crestmont Capital offers a range of financing solutions for Drury Hotels franchise owners and operators:
$15M+
Typical Full-Service Property Investment
150+
Drury Hotels Properties in the U.S.
25+
States Where Drury Hotels Operates
70%+
Average Industry Occupancy Rate Goal
1.25x
Minimum DSCR Required by Most Hotel Lenders
50%
Minimum Equity Required for New Hotel Development
Hotel financing qualification standards are more rigorous than many other business loan types given the capital intensity of hospitality investments. Here's what lenders typically look for when evaluating Drury Hotels property loan applications:
Hotel lenders place significant weight on borrower experience. While first-time hotel investors can obtain financing, those with proven track records of successful hotel operations receive more favorable terms. Lenders typically look for:
Even borrowers with less-than-perfect credit may have financing options. Crestmont Capital works with a wide range of borrowers including those with credit challenges. Our bad credit business loans and alternative financing solutions can help hotel investors access capital even when traditional banks say no. Stronger collateral, larger down payments, and documented management experience can help offset credit concerns.
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Check My Options NowLet's look at how different types of Drury Hotels investors have successfully used financing to achieve their goals:
The Situation: Michael, an experienced hotel investor with two limited-service properties in his portfolio, identified an existing Drury Inn & Suites with 145 rooms in the Midwest. The property was available for $14.2 million and had demonstrated consistent occupancy above 72% and strong cash flow over the prior three years.
The Financing Solution: Michael secured a conventional hotel acquisition loan for $9.5 million (67% LTV) at a fixed rate with a 10-year term and 25-year amortization. His existing property portfolio and documented management experience were key factors in securing favorable terms. He also obtained a separate business line of credit for $500,000 to cover working capital needs during his first year of operation.
The Outcome: Michael's acquisition closed within 75 days, and the property's DSCR comfortably exceeded 1.35x in its first full year under his ownership, validating the investment thesis.
The Situation: A regional development company secured an agreement with Drury Hotels to develop a new 180-room Drury Inn & Suites in a growing secondary market. The total project budget was $24 million, including land, construction, FF&E, and pre-opening costs.
The Financing Solution: The development was financed with a combination of:
The construction loan converted to a 10-year permanent loan upon stabilization at 75%+ occupancy, which was achieved within 18 months of opening.
The Situation: Sandra owned a Drury Hotels property that needed significant renovation to meet updated brand standards. The Property Improvement Plan called for $2.8 million in updates over 18 months, covering room refreshes, lobby renovation, food service area upgrades, and technology infrastructure improvements.
The Financing Solution: Sandra secured a renovation loan from Crestmont Capital structured as a long-term business loan with draws tied to project milestones. This allowed her to manage cash flow effectively throughout the renovation period without disrupting hotel operations or depleting her reserves.
The Outcome: The renovated property saw a 12-point increase in guest satisfaction scores and a 15% increase in RevPAR in the first year following renovation completion, validating the renovation investment.
The Situation: Carlos, a successful commercial real estate investor with no prior hotel experience, wanted to acquire a Pear Tree Inn by Drury as his first hospitality investment. The 78-room property was priced at $4.8 million in a market he knew well from prior commercial real estate activity.
The Financing Solution: An SBA 7(a) loan was the ideal vehicle for Carlos given his limited hotel experience. The SBA's loan guarantee reduced lender risk, allowing Carlos to secure financing with a 15% down payment ($720,000) and a 25-year amortization schedule that created manageable debt service. He also hired an experienced hotel management company to operate the property, addressing the lender's experience concerns.
The loan application process for a hotel investment requires careful preparation. Here's a step-by-step guide to successfully applying for a Drury Hotels property loan:
Before approaching lenders, take a thorough inventory of your financial position including your credit score, liquid assets, net worth, and income. This will help you understand what loan products you qualify for and what terms to expect.
Clarify what type of Drury Hotels investment you're pursuing (acquisition vs. new development), what markets you're targeting, what size property you're seeking, and your target returns. This clarity will help you communicate effectively with lenders and advisors.
Hotel loan applications require extensive documentation. Begin collecting:
Reach out to Crestmont Capital's hospitality financing specialists. We'll assess your situation, discuss your goals, and identify the most suitable financing options for your Drury Hotels investment. Our team can also help you understand what additional documentation may be needed and how to strengthen your loan application.
With Crestmont Capital's guidance, you'll submit a comprehensive loan application package. Our streamlined application process minimizes the burden on you while ensuring lenders have everything they need to make a decision efficiently.
Once your application is under review, lenders will conduct their due diligence including ordering appraisals, environmental assessments, and reviewing property condition reports. Stay responsive to information requests to keep the process moving.
Upon loan approval, you'll receive a commitment letter outlining your loan terms. Review the terms carefully with your attorney and financial advisors before proceeding to closing. Crestmont Capital will coordinate with all parties to ensure a smooth closing process.
Start the process today by applying for your Drury Hotels franchise loan.
Drury Hotels operates primarily as a company-owned and managed brand, which sets it apart from many major hotel chains that aggressively franchise. However, Drury does work with select third-party developers and investors in specific markets and under specific conditions. Prospective investors should contact Drury Hotels corporate directly to discuss development opportunities. Financing for approved Drury Hotels projects follows the same principles as other branded hotel investments.
2. What credit score do I need to qualify for a Drury Hotels property loan?Most hotel lenders require a minimum personal credit score of 650-680 for hotel acquisition loans. However, borrowers with scores above 720 will typically receive significantly better terms including lower interest rates and higher loan-to-value ratios. If your credit score is below 650, Crestmont Capital may still have options through alternative lending programs, particularly if you have substantial equity, strong operating history, and other compensating factors.
3. How much down payment is required for a Drury Hotels property acquisition?Down payment requirements for hotel acquisitions typically range from 25-40% of the purchase price for conventional hotel loans (reflected in LTV ratios of 60-75%). SBA-backed loans may allow for lower down payments of 10-20% for qualifying borrowers. New development projects generally require 35-50% equity from the developer, though mezzanine financing can help bridge part of the gap.
4. Can I use an SBA loan to finance a Drury Hotels property?Yes, both SBA 7(a) and SBA 504 loans can be used for hotel property acquisitions under certain conditions. SBA 7(a) loans are capped at $5 million, making them most suitable for smaller Drury Hotels properties like Pear Tree Inn by Drury locations. SBA 504 loans can accommodate larger amounts through the bank/CDC structure. Crestmont Capital has experience navigating SBA hotel financing and can help you determine which SBA program is best suited to your situation.
5. What are typical interest rates for Drury Hotels property loans?Hotel loan interest rates vary based on loan type, term, LTV, borrower creditworthiness, and market conditions. As of 2026, conventional hotel loan rates typically range from 6.5% to 9.5% for fixed-rate products. SBA 7(a) rates are variable and typically track above the prime rate. SBA 504 loans offer long-term fixed rates that have historically been below conventional hotel loan rates. Contact Crestmont Capital for current rate information specific to your situation.
6. How long does it take to close a hotel acquisition loan?Hotel loan closings typically take 45-90 days from the time a complete application package is submitted. The timeline depends on the complexity of the transaction, the lender's internal processing capacity, and the time required for third-party reports like appraisals and environmental assessments. Bridge loans and alternative financing from lenders like Crestmont Capital can sometimes close faster when speed is critical.
7. What is the DSCR requirement for a Drury Hotels property loan?Most hotel lenders require a minimum Debt Service Coverage Ratio (DSCR) of 1.25x, meaning the property's Net Operating Income must be at least 25% greater than the annual debt service (principal and interest payments). Some lenders require 1.30x or 1.35x for hotel properties given their operational complexity. Drury Hotels' strong reputation and consistently high occupancy rates relative to the competitive set can help support favorable DSCR projections.
8. Can first-time hotel investors qualify for a Drury Hotels property loan?First-time hotel investors can qualify for hotel financing, though it may be more challenging than for experienced operators. To offset limited experience, first-time hotel investors can strengthen their application by engaging an experienced hotel management company, having strong personal financial statements, providing a larger down payment, selecting an established market with proven demand, and working with a lender experienced in hotel financing like Crestmont Capital who understands how to structure loans for their situation.
9. What type of business entity is best for a Drury Hotels investment?Most hotel investments are made through special purpose entities (SPEs) typically structured as LLCs or LPs. This structure provides liability protection, pass-through taxation flexibility, and clean financial reporting for the hotel property. Your attorney and CPA can advise on the optimal entity structure for your specific situation, taking into account tax considerations, financing requirements, and estate planning goals.
10. How does Drury Hotels brand affiliation affect my ability to get financing?Drury Hotels brand affiliation is generally viewed positively by hotel lenders. The brand's strong reputation for guest satisfaction, consistent operating standards, and stable performance history makes Drury-affiliated properties more attractive collateral than independent hotels. Lenders recognize that branded hotels typically benefit from reservation system support, brand marketing, and operational best practices that reduce performance risk. This brand strength can result in more favorable loan terms compared to an otherwise similar independent hotel.
11. What working capital support is available for Drury Hotels operators?Hotel operations are capital-intensive and subject to seasonal cash flow fluctuations. Crestmont Capital offers several working capital solutions for hotel operators including business lines of credit, short-term business loans, and equipment financing. A business line of credit is particularly well-suited for managing the seasonal ebbs and flows of hotel revenue, allowing operators to draw funds when needed and repay as cash flow improves.
12. Can I refinance an existing Drury Hotels property loan?Yes, hotel property refinancing is common and can serve several purposes including reducing the interest rate, extending the loan term, pulling out equity for other investments, or switching from variable to fixed-rate financing. Hotel refinancing follows similar underwriting criteria as acquisition financing. The timing of a refinance should consider current market rates, remaining term on the existing loan, prepayment penalty provisions, and the property's current performance metrics.
13. What is a hotel Property Improvement Plan (PIP) loan?A Property Improvement Plan (PIP) is a set of required renovations and updates that hotel brands like Drury Hotels mandate to maintain brand standards. PIP financing is specifically designed to fund these renovations. PIP loans can be structured as standalone renovation loans, additional draws on an existing mortgage, or incorporated into a refinancing of the property. Crestmont Capital offers PIP financing tailored to hotel operators' needs, with flexible draw schedules tied to renovation milestones.
14. How do lenders evaluate hotel markets for Drury Hotels properties?Hotel lenders evaluate market conditions extensively as part of their underwriting process. Key factors include the strength and diversity of demand generators (corporate, leisure, group), competitive supply dynamics (existing hotels and planned new supply), market occupancy and rate trends, barriers to entry that protect the market from oversupply, and regional economic health. Markets with diverse demand generators, limited new supply, and positive economic trends command the most favorable financing terms. Drury Hotels' focus on secondary markets and strong corporate demand locations often aligns well with lender market preferences.
15. What makes Crestmont Capital a good choice for Drury Hotels financing?Crestmont Capital brings specialized expertise in hospitality financing combined with access to multiple capital sources. Unlike a single bank that can only offer its own products, Crestmont Capital can match your specific financing need with the most appropriate lender and loan product. Our team understands hotel underwriting metrics, can expedite the financing process, and provides ongoing support throughout the loan lifecycle. Whether you need an SBA loan, conventional hotel financing, working capital, or equipment financing, Crestmont Capital has solutions designed for Drury Hotels investors and operators.
Finance Your Drury Hotels Investment Today
Get matched with the right loan product for your Drury Hotels property. Crestmont Capital's hospitality financing experts are ready to help you move forward.
Apply for Financing NowDrury Hotels represents one of the strongest mid-market hotel brands in the United States, built on a foundation of genuine hospitality, operational consistency, and strong guest satisfaction scores. For hospitality investors seeking a proven brand with sustainable performance, a Drury Hotels property is an exceptional opportunity.
Successfully financing a Drury Hotels investment requires understanding the unique characteristics of hotel financing, including the capital intensity, specialized underwriting metrics, and multiple loan products available. Whether you're acquiring an existing property, developing a new hotel, executing a Property Improvement Plan, or seeking working capital for ongoing operations, the right financing structure can make the difference between a struggling investment and a thriving one.
Crestmont Capital has the hospitality financing expertise, lender relationships, and commitment to customer service to help you navigate the Drury Hotels financing process successfully. From SBA loans and commercial hotel financing to working capital lines and equipment financing, we offer the full range of hospitality financing solutions you need to build and manage a successful Drury Hotels investment.
Don't let financing complexity stand between you and your Drury Hotels investment goals. Contact Crestmont Capital today to begin the conversation about how we can help you achieve your hospitality business objectives. Our team is ready to work with you to find the right financing solution for your specific situation and get you moving toward closing.
Ready to take the next step? Apply now or explore our full range of small business financing solutions to learn more about how Crestmont Capital can support your hospitality business goals. You can also read more about hotel financing options and franchise business loans on our blog.
The information provided in this article is for general educational purposes only and does not constitute financial, legal, or investment advice. Loan terms, interest rates, and qualification requirements are subject to change and vary by lender. Drury Hotels franchise and licensing information is subject to change; prospective investors should conduct their own due diligence and consult with qualified legal, financial, and hospitality industry advisors before making any investment decisions. Crestmont Capital is not affiliated with Drury Hotels. All financing is subject to credit approval and lender underwriting guidelines.