Conventional loans are any permanent but non-governmental amortized loans offered by any type of lender including depository FDIC regulated banks, non-depository lenders, life companies, and foreign banks.

It is probably safe to say that conventional loans by banks, the most common type of conventional hotel loans obtained during the past few years is now nearly extinct. In every geographic market, there are only a very few community banks lending hotel commercial loans with advance rates of 40% to 55%.

Few life companies may consider hotel loans and their terms are again far more conservative than the past:

• Maximum Loan Amount: Generally up to 25MM

• Maximum Advance Rate: In today's market probably most life companies or lenders are staying at 45% to 55% loan to value/cost. A very attractive project will probably not take more than 60%.

• Interest Rates: Probably the rates are concentrated in the mid 6% to high 7% range