Staying out of debt is one of the biggest challenges for Airbnb hosts. Even many successful hosts find themselves with a mountain of credit-card debt because of the way Airbnb pays.
It can take Airbnb several weeks or longer to pay for a booking. In the meantime the host is still faced with expenses like the rent, groceries, utilities, insurance, the car payment, the mortgage, credit card bills etc. Throw in an emergency like a broken hot water heater and the host can find herself out of money.
Not surprisingly many hosts in this situation find themselves using credit cards to cover day to day expenses. To make matters worse many mortgage lenders will not loan to Airbnb hosts because they are small businesspeople. That means a second mortgage or a home equity loan is not a viable option.
Financing Alternatives for Airbnb Hosts
Fortunately there are a number of really good financing alternatives for Airbnb hosts out there. Some of the best options include:
- Refinancing, home equity loans and second mortgages. There are many lenders that will lend to Airbnb hosts, Bankrate’s “Homehacker” Holden Lewis reported. To find them you will have to shop around online and be willing to deal with smaller nontraditional lenders. You might also to pay a higher interest rate.
- A factor is a business that pays cash for unpaid invoices. Payfully is a factoring platform that will pay cash for unpaid Airbnb bookings. The advantage to factoring is that is a cash payment, not a loan. That means there’s no interest, no effect on your credit rating and nothing to pay back. If you are approved, Payfully can pay in as little as 48 hours.
- Online lending platforms. These lenders offer fast approval and they are often willing to work with nontraditional borrowers that banks reject. Two excellent platforms that are easy to work with are:
- Lendio can arrange a loan for as little as $1,000. Lendio offers a wide variety of loans to choose from because it can connect you to investors willing to take a chance on your business. Interest rates will be higher and terms can be flexible but financing is often easier to get.
- Marcus from the Wall Street investment bank Goldman Sachs is an artificial intelligence-based solution that quickly approves and issues consolidation loans for credit card debt. Interest rates range from 5.99% to 22.99%, but Marcus can help you improve your credit score by paying off credit card balances.
The bottom line is that there are many good financing alternatives for Airbnb hosts; that are willing to shop around and think outside the box. Finding such an alternative; that works for you, is the best way for a host to get control of his or her debts.