FINANCING PROGRAMS
SBA 7A
7a Loans are 90% financing as long as the 90% loan is covered with a DSCR of 1.25 of the Hotel you are buying. working capital is allowed, renovation, and PIPs. All have to be documented explicitly for working capital, its purpose (Marketing, HR, material, etc.), and the renovation accompanied by a GC quote. The loan is a recourse. Our lenders lend from $500k to 5 million. Loans can be fixed or variable for 25 years with rates between 6.5% and 7.5% fixed and floating prime +1% to 3%. There is a 3-year prepayment penalty. Closing time 45-60 days.
SBA 504
504 Loans are 90% financing as long as the 90% loan is covered with a DSCR of 1.25 of the Hotel you are buying. Working capital is allowed. This program is a combination of two mortgages. The federal government, via a CDC, lends a % of the money (money goes to the bank), and the Bank lends most of the money the client needs. Combined rates can be between 6 -7.5%. Typically an SBA 504 is for a loan over 5M, tho some banks can do as low as $1M to up to 20M. It is a recourse loan and the prepayment is for 10 years. Closing time 90-120 days.
CONDUITS
CMBS conduits, Start from $5M for hotels for brands of Marriott, Hilton, Hyatt, and IHG with interior corridors. Can be up to 100% refinancing, non-recourse loans (no personal guarantee), loans are assumable, allowed Equity Cash-Out without restriction, no minimum credit score, rates are below 7% fixed for 5, 7, 10 years term and 25 to 30-year amortization. The LTV is 60-70%. Properties must be stabilized with historic cash flow to support mortgage payments at 1.35 DSCR for the past 2+ tax returns.