How to Get Loan for Hotel & Tourism Business in India?

India’s hotel and tourism sector is booming, contributing over ₹21 lakh crore (US$250 billion) to the economy in 2024 and expected to double in the next decade. With domestic travel, government campaigns, and global tourism on the rise, opportunities for entrepreneurs in hospitality are brighter than ever.

But scaling a hotel, homestay, resort, or travel agency requires capital. The good news? Multiple government schemes, bank loans, and collateral-free finance options are available. In this blog, we’ll break down how you can secure a Loan for Hotel & Tourism Business in India, the documents required, the step-by-step process, and how StartupFlora can make the journey easier.

How I Started My Hotel & Tourism Business in India with a Loan?

Let’s take an example.

Ravi, an entrepreneur from Jaipur, wanted to open a 25-room boutique hotel to target foreign tourists. He approached SBI under its Paryatan Plus scheme, submitted his project report and GST registration, and got a ₹1.5 crore loan sanctioned. StartupFlora guided him in preparing the documents, ensuring CGTMSE coverage so that no heavy collateral was required.

This real-world case shows that with the right approach, funding a hotel/tourism venture in India is possibleeven for first-time entrepreneurs.

Loan Options & Schemes for Hotel & Tourism Business

Government Schemes

Pradhan Mantri MUDRA Yojana (PMMY): Up to ₹10 lakh collateral-free loans (Shishu, Kishor, Tarun). Great for homestays, small restaurants, or travel agencies.
PMEGP (Prime Minister’s Employment Generation Programme): Bank loan + subsidy up to 35%. Ideal for small hotels or dhabas. Loans up to ₹10 lakh are collateral-free.
Stand-Up India: Loans from ₹10 lakh to ₹1 crore for women/SC/ST entrepreneurs in services (includes hospitality).
CGTMSE: Collateral-free loans up to ₹2 crore with govt guarantee. Applicable for hotels, restaurants, tour operators.
State Tourism Subsidies: Some states provide interest subsidies (5–7%) or capital grants for setting up hotels in tourism circuits.

Bank Loan Schemes

SBI Paryatan Plus: Finance for hotels, resorts, restaurants, tourist vehicles. Collateral-free up to ₹1 Cr under CGTMSE.
Bank of Maharashtra Hospitality Scheme: ₹10 lakh to ₹10 crore loans. Collateral-free up to ₹5 Cr. Covers even land purchase (25% of project cost).
Bank of India THALA Scheme: Loans ₹25 lakh–₹25 Cr for Tourism, Hospitality & Logistics.
Central Bank of India – Cent Hotel Loan: Loans up to ₹50 crore for hotels, motels, restaurants.
Private Banks & NBFCs: Bajaj Finserv, HDFC, ICICI provide unsecured loans up to ₹80 lakh with quick processing.

Documents Required for Hotel & Tourism Loan

KYC (Aadhaar, PAN, Passport, etc.)
Business Registration (GST, Udyam, Incorporation certificate)
Financial Statements (2–3 years Balance Sheet, IT returns, bank statements)
Project Report (for new hotels/tourism ventures)
Licenses (Hotel license, FSSAI, Tour operator license if applicable)
Collateral documents (if pledging property/assets)

Step-by-Step: How to Get This Loan

Prepare business plan & project cost analysis.
Check eligibility – credit score (650+ preferred).
Register business & get GST/Udyam certificate.
Choose right scheme or bank loan.
Submit loan application with documents.
Undergo credit appraisal & site visit.
Receive sanction & disbursement.

New Schemes for Tourism Business (Post-2023)

Tourism Push in Union Budget FY26: ₹2,541 crore allocation; special push for homestays via Mudra loans.
State-Level Incentives: States like Rajasthan, Gujarat, and Karnataka offering capital subsidies for new hotels.
Digital Tourism Initiatives: Loans for digitalization, online booking systems, and tourism tech startups are now being prioritized.

Can You Get a Loan Without Collateral?

Yes.

CGTMSE guarantees loans up to ₹2 Cr (collateral-free).
Bank of Maharashtra allows collateral-free loans up to ₹5 Cr.
NBFCs like Bajaj Finserv provide up to ₹80 lakh unsecured loans.
Mudra loans up to ₹10 lakh are collateral-free.

How StartupFlora Helps in Getting Hotel & Tourism Business Loans

At StartupFlora, we simplify funding:

Profile Check: Assess your credit/Experian score & eligibility.
Loan Match: Compare offers from 50+ Govt, Private, NBFC, Co-op banks.
Documentation Help: Organize GST, Udyam, project reports for smooth processing.
End-to-End Support: From application to sanction, we stay with you.
Funding Range: From working capital to machinery finance, term loans to invoice discounting.

With StartupFlora, you won’t run pillar to post – we give you a single trusted window to secure the best loan for your hotel or tourism business.

FAQs – Loan for Hotel & Tourism Business

Q1. Can I get a hotel business loan without collateral?
Yes. Through CGTMSE, Mudra, and NBFCs, you can get up to ₹2 Cr collateral-free.

Q2. What credit score is required?
A minimum of 650+, but 700+ is ideal. Bajaj Finserv requires 685+ for unsecured loans.

Q3. How much funding can I get?
Ranges from ₹10 lakh to ₹2 crore for MSMEs. Large hotel projects can access ₹10–50 crore with collateral.

Q4. What is the interest rate?

Public Banks: 8–14%
NBFCs/Private Banks: 12–20%
With subsidies: As low as 5–7% effective rate.

Q5. Are there subsidies for tourism business?
Yes. PMEGP offers 15–35% subsidy, state tourism boards give capital subsidies/interest rebates.

Conclusion

The hospitality and tourism sector in India is growing rapidly and funding is now easier than ever. From government subsidies to bank loans and collateral-free finance, entrepreneurs have multiple paths to secure capital.

With the right documents and guidance, you can access funding to start or expand your hotel/tourism business. And with StartupFlora, you get expert help to match with the best lenders, prepare documents, and get your loan sanctioned quickly.

👉 Ready to finance your hotel or tourism business? Connect with StartupFlora today and turn your dream venture into reality.