Background

Short-term rentals grew sharply after platforms like Airbnb and Vrbo made short stays easy to market. Lenders responded by offering faster, more flexible products aimed at hosts who need capital for furnishing, staging, turnover cleaning, or quick repairs between guests. In my practice helping rental owners, timely financing often makes the difference between a slow launch and hitting target occupancy in the first weeks.

How it works — common loan types and uses

  • Secured options: HELOCs and second mortgages typically offer lower interest rates because they’re secured by home equity. They’re well suited for larger upgrades or furnishing multiple units (see HELOC vs second mortgage guidance).
  • Unsecured quick loans: Personal loans and short-term business installment loans approve faster but usually at higher rates and shorter terms. They’re useful for immediate furnishing or emergency turnover costs.
  • Business credit lines: For owners operating under an LLC or property-management business, a business line of credit can smooth repeated turnover expenses. Short-term bridge loans also serve when timing a larger refinance or sale.

Funds are commonly used for:

  • Furnishing, linens, and décor to hit professional listing standards.
  • Turnover cleaning, replenishment, and inspections between guests.
  • Minor repairs or local compliance costs (permits, short-term rental registration).

Tax and accounting notes

  • Furnishings and appliances are typically depreciable assets. The IRS treats most tangible personal property used in a rental as depreciable (see IRS Publications 527 and 946). Consult a tax advisor to choose between immediate expensing (when available) and multi-year depreciation.
  • Interest on loans used for rental activities is often deductible as a rental expense when the loan proceeds are used for the rental business—document the use of funds and keep receipts (IRS Publication 527).

Rates, timelines, and eligibility (what to expect in 2025)

  • Interest: Rates vary by product and borrower. Secured HELOCs or second mortgages often carry mid-single-digit to low-double-digit rates for qualified borrowers; unsecured short-term loans commonly run higher, into the mid- to high-teens depending on credit and lender (Consumer Financial Protection Bureau guidance on loan shopping is helpful).
  • Approval and funding: Quick unsecured loans and online business lines can fund in 1–7 days; secured second mortgages and HELOCs generally take longer because of appraisals and title work.
  • Typical requirements: ID, credit score, proof of income, tax returns, property information, and for business lines, basic financial statements or rental performance projections.

Practical examples

  • Small-scale host: A single-unit host who needs $6,000 to furnish and stage a condo may choose an unsecured personal loan or a zero-balance business card to speed listing. Faster funding often leads to earlier bookings and occupancy gains.
  • Portfolio investor: A vacation-home investor uses a HELOC to refresh kitchens across two properties, capturing higher nightly rates and a quicker ROI due to lower secured interest costs.

Risks and how to manage them

  • Cost of capital vs. expected returns: Run simple cash-flow and payback calculations before borrowing—estimate added nightly rate, occupancy uplift, and months to recover the spend.
  • Overleveraging: Avoid stacking short-term loans without an exit plan. Structure repayment to match expected incremental rental income or a refinance timeline.
  • Predatory terms: Compare APR, origination fees, prepayment penalties, and total repayment. Use reputable marketplaces and review lender state licensing and complaints (see Avoiding Predatory Short-Term Lenders).

Checklist for borrowing

  1. Get three price quotes for furnishings and three loan price quotes from different lenders.
  2. Prepare documentation: ID, tax returns, recent rental income or pro forma, and property records.
  3. Project conservative occupancy and revenue before committing.
  4. Confirm tax treatment with your CPA—document how the loan proceeds are used.

Common mistakes

  • Ignoring total loan cost: Fast approval is attractive, but high fees or factor rates can erase profit gains.
  • Skipping documentation: Poor bookkeeping makes it hard to claim deductions and increases audit risk.
  • Underestimating turnover expenses: Cleaning, replacement costs, and variable utilities add up—budget for recurring expenses.

Short answers to frequent questions

  • Are short-term rental loans different from regular personal loans? Yes. Some lenders tailor terms and allowable uses for rental businesses, and secured options use property equity to lower rates.
  • Can I deduct loan interest used to furnish a rental? If the funds are used for your rental activity, interest is commonly deductible as an expense—verify with IRS Publication 527 and your tax advisor.
  • How quickly can I get funding? Unsecured options can fund within 1–7 days; secured loans typically take longer due to appraisals and title work.

Professional tips

  • If you plan repeated turnover spending, set up a dedicated business line of credit to keep personal and rental finances separated—this simplifies accounting and tax reporting.
  • Prioritize items that increase guest satisfaction and justify higher rates: mattresses, fast Wi‑Fi, quality linens, and professional photos.

Internal resources

Professional disclaimer

This article is educational and not personalized financial, legal, or tax advice. Terms change and lender offers vary—consult a licensed lender and a tax professional to match a product to your specific situation.

Authoritative sources

In my 15+ years advising owners and investors, the right short-term financing—paired with conservative revenue projections and tight documentation—often turns an ordinary listing into a profitable property faster.