How to Finance an Apartment Collection by Hilton Franchise: Costs
By Chris Cornella
An Apartment Collection by Hilton franchise loan finances something different from a typical hotel: a building of furnished apartments with full kitchens and in-unit laundry, sold by the night or by the month through Hilton’s booking and loyalty systems. Because the brand sits between multifamily housing and lodging, the way you finance it, and whether SBA financing is even available, depends heavily on how long your guests actually stay.
This article covers costs, ongoing fees, ownership paths and how lenders view an apartment-style lodging deal. It is general information only. US Professional Funding is not affiliated with, sponsored by or endorsed by Apartment Collection by Hilton or Hilton; the name is used only to describe the business. Figures come from the franchisor’s disclosure document and can change, loan programs vary by lender and borrower, and every loan is subject to approval. Nothing here is legal, tax or investment advice.
Apartment Collection by Hilton Franchise Loan at a Glance
According to Hilton’s 2026 Apartment Collection by Hilton Franchise Disclosure Document, issued February 2, 2026:
- Franchise application fee (new development or conversion): $100,000, plus $400 for each guest room or suite over 250
- Change of ownership application fee: $150,000; re-licensing application fee: $100,000
- Monthly royalty fee: 5.0% of gross rooms revenue
- Monthly program fee: 2.5% of gross rooms revenue, which the franchisor may change within a stated cap
- Estimated initial investment: $1,427,231 to $64,868,539 for a typical 100-unit property, not including real property, with up to $311,900 of that paid to the franchisor or its affiliates
- Brand size: Hilton’s brand fact sheet currently lists 5 open properties with 1,019 rooms and 4 more in development
- SBA Franchise Directory: listed as Apartment Collection by Hilton (code S8690), with notes on management agreements and on revenue from stays of 30 days or less
Hilton does not publish a fixed minimum net worth or liquid capital figure for this brand in the materials we reviewed.
What Is Apartment Collection by Hilton?
Hilton introduced Apartment Collection by Hilton in January 2026 as a new lodging category within its collection brands. The disclosure document describes the properties as premium apartment hotels for business and leisure travelers who want extended-stay accommodations, though stays can be either long-term or short-term.
The disclosure document says units are expected to be primarily two-bedroom apartments, with studios, one-bedroom and three-bedroom units as well. Each apartment has a full kitchen with a stove, oven, dishwasher, microwave and refrigerator, plus a washer and dryer. Shared amenities generally include a fitness center, lobby, reception desk and lounge, while food and beverage, meeting space and pools are optional.
The franchisor is Hilton Franchise Holding LLC, a Delaware limited liability company headquartered in McLean, Virginia. It became the franchisor of this brand on February 2, 2026. The first properties launched under a management arrangement with a furnished-apartment operator; the disclosure document notes that those managed properties are not franchised. Hilton said it plans to grow the brand further through franchise agreements with multifamily owners.
Why lenders see this brand differently. A lender looking at an Apartment Collection deal sees a building that could be valued as an apartment property or as a lodging property, depending on how it operates. That matters for the appraisal, the loan program and the SBA eligibility test discussed below. Our comparison of SBA 7(a) and 504 loans for hotels gives useful background.
Apartment Collection by Hilton Franchise Costs
Because the brand accepts both conversions and new development, the published investment range is unusually wide.
Initial franchise fee
The 2026 disclosure document lists a $100,000 application fee for new development or conversion, plus $400 for each guest room or suite over 250. A change of ownership costs $150,000 and re-licensing costs $100,000. If an applicant withdraws before approval or is denied, the fee is refunded less a $7,500 processing fee.
Building, conversion and real estate
The Item 7 total excludes real property, so the purchase price of the building or land comes on top. Conversions mainly spend on furnishing apartments, common areas and technology; new builds add land and full construction.
Furniture, fixtures and equipment
Every unit needs furniture, appliances, housewares and in-unit laundry. Owners that buy through the franchisor’s affiliates pay procurement fees of 4% to 10% of project cost, according to the disclosure document.
Opening costs, technology and training
The 2026 disclosure document lists these initial items:
- OnQ computer system: $41,400 to $109,400
- Opening process services fee: $20,000
- Training: $5,000 to $15,000
- Other start-up fees: currently $6,500
- PIP fee: $10,000, for properties that need a property improvement plan
- Construction or renovation extension fee: $10,000
Total investment
The disclosure document estimates $1,427,231 to $64,868,539 for a typical 100-unit property, excluding real property. We could not verify the full Item 7 line-by-line breakdown, so ask for the complete table in the current disclosure document and compare it with your architect’s, contractor’s and furniture vendor’s estimates for your building.
Ongoing Fees and How They Affect Your Loan
Lenders size a lodging loan on cash flow after operating expenses, and brand fees come off the top. According to the 2026 disclosure document:
- Royalty fee: 5.0% of gross rooms revenue, monthly
- Program fee: 2.5% of gross rooms revenue, monthly; the rate will not rise by more than 1% of gross rooms revenue over the franchise agreement term
- OnQ connectivity: $400 to $600 per month
- OnQ hardware and software maintenance: $1,042 to $2,435 per month
- Connected Room maintenance: $455 to $720 per month
- Hilton Honors: 2.0% of the eligible guest folio, waived for enrollments made on property
- Permitted transfer processing fee: currently $5,500
- Lender comfort letter processing fee: currently $3,500 per letter
An Apartment Collection by Hilton franchise loan is sized after these fees, the management fee and a furniture replacement reserve come out of projected cash flow.
Quality and renovation penalties. The disclosure document lists a plans and designs late fee of $8,000 every 90 days and a renovation failure fee of $16,000 every 6 months. Construction or PIP deadlines should line up with your loan’s draw and completion schedule.
Franchisor Requirements for New Owners
Hilton approves both the owner and the property, reviewing the building’s location, unit mix and condition along with the applicant’s financial capacity and lodging or multifamily experience. The application fee and, for an existing building, the PIP fee start the process. Brand and loan approvals often depend on each other, so pursue both in parallel.
Ways to Own an Apartment Collection by Hilton Property
Converting a multifamily building. An owner converts all or part of a building into furnished apartments under the brand. Lenders will ask how existing leases are handled and how revenue shifts from monthly rent to shorter stays.
Converting an existing hotel. An extended-stay or suite hotel may convert if its units can meet the brand’s kitchen and laundry requirements. Our page on hotel acquisition financing explains how purchases of existing lodging properties are typically funded.
New development. A purpose-built property adds land, construction risk and a ramp-up period, so lenders usually expect more equity and a feasibility study.
Buying a branded property. As the system grows, a buyer may acquire an existing Apartment Collection property through the $150,000 change of ownership process, likely with a PIP.
Financing Options for an Apartment Collection by Hilton Franchise
SBA 7(a) loans. SBA 7(a) loans can fund a building purchase, renovation, furniture and working capital in one loan, subject to the eligibility test below. The 7(a) program maximum is currently $5 million, and program rules can change.
SBA 504 loans. SBA 504 financing pairs a bank loan with a certified development company loan and a borrower contribution for real estate and long-lived assets, which can fit a building purchase or major conversion, subject to the same eligibility rules.
Conventional loans. Larger projects, or properties whose revenue leans toward longer stays, may fit conventional business loans or construction financing better than SBA programs.
Furniture and equipment financing. Kitchen appliances, washers and dryers, furniture packages and technology can sometimes be financed separately, though the primary lender will count that debt.
Working capital. Owners need cash for staffing and the months before occupancy builds. Our hotel working capital page covers lines of credit and reserves.
Seller financing on resales. A seller may carry part of the price on a resale. A seller note is typically subordinate to the primary loan, and SBA rules may limit how it is structured.
SBA Loans for Apartment Collection by Hilton Franchisees
SBA loans are made by participating lenders with an SBA guarantee on part of the loan. Apartment Collection by Hilton appears on the SBA Franchise Directory under code S8690, which can simplify the lender’s review of the franchise agreement. A listing does not approve any borrower.
Note 1: management agreements. If the owner hires a third-party management company, the lender must review that agreement under SBA rules to check for affiliation. The applicant is not eligible if the management company is, or is affiliated with, the franchisor. In plain terms, you can hire an independent manager, but a property managed by Hilton or a Hilton affiliate would not qualify.
Note 2: the transient revenue test. This note matters most for an apartment brand. The lender must confirm that more than 50% of the prior year’s revenue came from guests staying 30 days or less at a time. For a start-up, projections must show the same. A building that rents mostly by the month would fail this test and would need conventional financing instead.
Practical tips. Track revenue by length of stay from day one, and bring the franchise agreement, any management agreement, a sources and uses statement and personal financial statements to the first conversation.
How Lenders Evaluate an Apartment Collection by Hilton Deal
Credit, net worth and liquidity. Lenders review each principal’s credit, tax returns and debts, plus the equity contribution and reserves left after closing. Significant owners typically sign personal guarantees.
Operating experience. Lodging or multifamily experience helps, and many owners hire an independent manager; our article for the first-time hotel buyer covers how lenders view newer operators.
Business plan and projections. Show occupancy, average rate, the length-of-stay mix, brand fees, management fees and a furniture reserve.
The franchise agreement. Lenders read the term, renovation deadlines, transfer provisions and early-termination damages.
Real estate. Expect an appraisal, condition report and environmental review; for conversions, the appraiser may weigh both multifamily and lodging value.
Furnishing and Converting Apartment Units
Each unit needs a complete kitchen, laundry, furniture and housewares, and common areas need a reception desk, lounge and fitness center. Lenders may fund this work at closing or hold it in reserve. Our article on financing a property improvement plan explains how brand-required work is typically funded.
Multi-Unit Growth
Each property typically has its own franchise agreement and approval, and financing a second one starts with the performance of the first. SBA limits apply across all of a borrower’s SBA loans, so larger portfolios often move toward conventional financing. Our article on buying a second hotel covers that transition.
Real-World Scenarios
A multifamily owner converting part of a building. The lender tracks how much revenue comes from short stays, because the SBA test applies to the whole business.
A hotel owner repositioning a suite property. The owner finances the PIP and new furniture through an SBA 504 structure.
An investor with a third-party manager. A buyer without lodging experience shares the management agreement early so the lender can check affiliation.
A developer building new. The project exceeds SBA limits, so the developer pursues a conventional construction loan with milestone draws.
Common Mistakes to Avoid
- Assuming SBA financing is available without checking the 30-day transient revenue test
- Forgetting that the Item 7 range excludes real property
- Underestimating the cost of fully furnishing every apartment
- Leaving brand fees and Hilton Honors charges out of projections
- Hiring a management company without checking the affiliation note
For more, read about the hotel loan mistakes owners make most often.
Next Steps Toward an Apartment Collection by Hilton Franchise Loan
Step 1: Choose your path. Decide whether you are converting a multifamily building, converting a hotel, building new or buying a branded property.
Step 2: Review the disclosure document. Read the current disclosure document with a franchise attorney, including the full Item 7 table, Item 17 and the liquidated damages provisions.
Step 3: Model the length-of-stay mix. Project how much revenue will come from stays of 30 days or less to see whether SBA financing is realistic.
Step 4: Build a full budget. Include the building, furnishing, technology, fees, opening costs, working capital and a contingency. Our SBA loan calculator can help with early payment estimates, which are for planning only.
Step 5: Assemble your documents. Gather financial statements, tax returns, résumés, the purchase contract, rent rolls or operating statements, the PIP or construction budget and any management agreement.
Step 6: Apply to the brand and lender together. Coordinate approvals so your contract and financing timelines line up.
Apartment Collection by Hilton Franchise Loan FAQs
How much does an Apartment Collection by Hilton franchise cost?
Hilton’s 2026 disclosure document estimates $1,427,231 to $64,868,539 for a typical 100-unit property, not including real property. The actual cost depends on whether you convert or build and on the building itself.
What is the franchise fee?
The application fee for new development or conversion is $100,000, plus $400 for each guest room or suite over 250. A change of ownership is $150,000.
What is the royalty?
The royalty is 5.0% of gross rooms revenue, plus a program fee of 2.5% of gross rooms revenue, according to the 2026 disclosure document. Technology and loyalty fees also apply.
Can I use an SBA loan as my Apartment Collection by Hilton franchise loan?
Possibly. The brand is on the SBA Franchise Directory, but more than 50% of revenue must come from stays of 30 days or less. Properties focused on monthly stays may need conventional financing.
How much net worth or liquidity do I need?
Hilton does not publish a fixed minimum in the materials we reviewed. The brand and your lender will judge whether your equity and reserves fit the project.
Can I finance furniture and appliances separately?
Often, through equipment financing, though the primary lender will count those payments.
Can I buy an existing property?
Yes, with Hilton’s approval through the change of ownership process, which typically includes a PIP.
Can I own more than one?
Yes. Each property needs its own approval, and lenders look at your existing results first.
Does Hilton offer financing?
Check Item 10 of the current disclosure document, which describes any financing the franchisor offers. Most owners arrange their own loans.
How long is the franchise agreement?
The term appears in the franchise agreement and Item 17. Lenders generally want the franchise term to run at least as long as the loan.
Final Thoughts
An Apartment Collection by Hilton franchise loan rewards preparation. The brand’s flexible conversion model can open doors for multifamily and hotel owners, but the length-of-stay mix shapes SBA eligibility, and furnishing every unit takes real capital.
US Professional Funding helps owners finance franchised lodging properties, including acquisitions, conversions, renovations and refinancing. Learn more about our franchise business financing and hotel and motel financing.
