Hotel     Motel    Resort Development
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  Common Sense Underwriting
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Flag Hotel and Non Flag loans
​Apartment loan
Motel  and condo loans
Mobile home park

Hotel Resort Loan domestic and International

VARIOUS  LOAN  FEATURES

  1. Express Business Loans
    Benefits: Competitive bank rates Up to 15-year terms No prepayment penalties Flexible down payment options Funding as quickly as 10 days Loan amounts up to $350,000 No personal or business CRE liens No out-of-pocket expenses
  2. Conventional Loans
    Min Loan Amount $1,000,000 Max LTV 80% Term 3-15 Years Amortization 15-30 Years Refinance or Purchase Full recourse loan assumption closing in 45 days declining prepay
  3. Conduit Loans
    Min Loan Amount $2,000,000 Max LTV 75% Term 5-10 Years Amortization 20-30 Years Properties that fall under the AMD category are—Hotels, Industrial, Office, Multi-family, Medical, Mixed-Use, Retail, and Self-Storage.
  4. SBA Hotel 7a Loan
    Min Loan Amount $1,000,000 Max LTV 85 - 90% Term 10-20 Years Amortization 15-30 Years full recourse no upfront fees
  5. Hotel life insurance loan
    Minimum loan amount $1,000,000 Max LTV: 75% Term: 5-30 years All property type More information
  6. USDA Commercial loan
    USDA Commercial Financing:  We offer a variety of options with these loans for Hotels and Motels.  From 250K to 5 million dollars we are able to go as high as 80% financing and from 5 million dollars to 10 million dollars we are able to go as high as 70% loan to value.

Hotel insurance loans

Hotel loan cheklist
The need for items #15-17 will vary according to each situation)

1. Most recent trailing 12 month INCOME/EXPENSE STATEMENT in standard Hotel accounting format. Go to FORMS and then HOTEL SPREADSHEET 
2. LAST 3 YEARS’ INCOME/EXPENSE STATEMENTS with monthly and annual figures.
3. SUMMARY OF ALL COMMERCIAL OR DEPARTMENTAL LEASES (if any) showing escalations and expirations, as well as a summary of the terms of any franchise agreements.
4. COMPLETE, DETAILED PHYSICAL DESCRIPTION INCLUDING SQUARE FOOTAGE.
5. IF ACQUISITION, PROVIDE COPY OF FULLY EXECUTED CONTRACT OF SALE.
6. IF REFI, PRICE ORIGINALLY PAID FOR PROPERTY, date of purchase and summary of current financing.
7. PHOTOS, if available, and website information.
8. SITE PLAN OR PROPERTY SURVEY.
9. SUMMARY OF CURRENT FINANCING (refinance only) including:
Current lender
Current principal balance
Current interest rate
Current monthly payment
Due date
Prepayment penalty information
10. CURRENT FINANCIAL STATEMENT for BUSINESS/ENTITY with Balance Sheet.
11. LAST 3 YEAR'S BUSINESS TAX RETURNS.
12. BACKGROUND / BIO FOR EACH PARTNER AND FOR THE OWNERSHIP ENTITY EMPHASIZING HOTEL / HOSPITALITY INDUSTRY / REAL ESTATE EXPERIENCE.
13. BACKROUND / INFORMATION ON MANAGEMENT COMPANY, if separate from ownership.
14. RENOVATION HISTORY FOR AT LEAST 3 YEARS with project descriptions and approximate amounts of each project.
15. CURRENT PERSONAL FINANCIAL STATEMENT(S). (for partners who own 20% or more) (If you do not have a recent accountant prepared financial statement, please click here for a pdf form)
16. LAST 2 YEARS’ PERSONAL TAX RETURNS. (for partners who own 20% or more) 

 

An Insurance Commercial Real Estate Loan is a mortgage that is provided by a life insurance company or conglomerate of life insurance companies and is secured by a first lien position on the subject property being financed. Most life insurance companies favor the “four food groups,” for their collateral (apartment, office, retail, and industrial properties), but may finance other property types (i.e. hotel or mixed used) on a case-by-case basis. These loans are typically best suited for transactions that have strong borrowers with good credit, newer, well-maintained properties, low leverage, and where the collateral is situated in or around a major MSA.
Underwriting Parameters

For life insurance loans, Lenders have continued and even strengthened their conservative approach toward underwriting the cash flow of the collateral as well as the borrowers and sponsors. As part of the underwriting process, Insurance Companies are simultaneously assessing the risks of default while trying to minimize such risks, so they require detailed borrower and property information. Underwritten cash flows are based on “in place” income and rents rather than anticipated income or further rent escalations and leases are analyzed with closer scrutiny to ensure market rates. Insurance Loans require a more conservative loan to value (LTV) with maximums for most lenders between 60-75%, and debt service coverage ratios (DSCRs) of at least 1.25-1.35x, Lenders are also calculating the anticipated debt yield (net operating income/loan amount) of at least 8-10%. Additionally, Borrowers should expect to have “hard cash” equity invested in their projects, while being able to maintain a reasonable post-closing liquidity. Prior commercial real estate ownership experience is highly desirable.
Loan Features
Term Length and Amortization: The length of term and amortization depends heavily on the institution providing the funding as well as the property type. Terms can vary from 5-30 years with amortizations ranging from 15-30 years. Depending on the way the loan is structured, it may “balloon” at the end of the term, meaning at the loan balance will need to either be refinanced or paid off; otherwise the loan is self-amortizing, meaning that the loan will be fully paid off when the loan matures, so there is no loan balance to pay off (unless the loan is prepaid before it matures).
Recourse:Life insurance loans may be non-recourse, limited recourse, or full recourse loans. If it is non-recourse, the Borrowers are not personally liable for the repayment of the loan and that the collateralized property and its cash flows would be the sole source of repayment of the debt in the event of a default or foreclosure. However, in the event the Borrower actively participates in an activity that could cause harm to the property, Lender, or investors, there could be springing recourse in some limited circumstances; this may include loan fraud, property transfer or subordinate financing without consent of the Lender, voluntary or collusive activity leading to a bankruptcy filing or failure to maintain SPE status, among other such actions. Limited recourse loans makes the sponsors guarantying the loan responsible for a percentage of any shortfall between the loan balance and sales price in the event of default and foreclosure, where the property must be auctioned off as well as any applicable legal and ancillary fees. The carve-outs for the non-recourse loans would also apply. Full recourse loans make the sponsors guarantying the loan responsible for any and all shortfalls between the loan balance and sales price in the event of default and foreclosure as well as any applicable legal and ancillary fees.

Ten Things to Know About Hotel Financing in 2017

Adequate hotel financing continues to be a major resource for U.S. hoteliers. New construction and renovation projects are typically complex and expensive, so here are ten things you need to know about your funding options and industry trends as we move into 2017.

USDA Loans. Department of Agriculture loans are a viable funding option depending upon property location. They offer competitive interest rates as opposed to conventional rates and allow for higher leverage. Check with your lender to see if you’re eligible.

SBA Loans. Small Business Administration loans continue to be great options for hoteliers that have never had this type of loan and meet the requirements. Some SBA loans offer longer amortization periods and interest only periods that help ease cash flow during the ramp-up period.

Conventional Loans. Conventional capital for new development and construction is likely to continue decreasing, even if you’re a highly experienced and solvent borrower. Due to fears of an overbuilt marketplace, conventional banks will continue to shy away from these projects.

Creative Lending. In some cases, conventional capital can be layered into a comprehensive loan package with other types of loan proceeds. This innovative method is used by some lenders to achieve adequate project funding.

PIP Loans. Property improvement plans can be financed using conventional or SBA capital. These loans allow hoteliers to maintain their liquidity by keeping more capital while completing necessary renovations.

Refinance. With the continuing pullback of CMBS and life companies from the hotel lending market, it’s important to work with a trusted lender who understands the marketplace and various loan structures. Consider a lender who is committed to providing viable refinance options that meet your goals.

Flexibility. Flexible payment options, inclusion of closing costs and sufficient working capital in the final financing package are huge benefits. Not all lenders have the capacity to offer this, but hoteliers should seek these advantages.

Interest Rates. The continued suppression of interest rates could be artificially inflating real estate values which may lead to tightened underwriting standards. Thus, hoteliers may find that financial institutions are lowering loan to value thresholds and increasing minimum debt service coverage standards.
Construction Costs. These will likely continue to rise as they have in the recent past, making accessible financing even more valuable for hoteliers.

Preparedness. Most lenders will require a franchise comfort letter and want your loan terms to match your franchise agreement. Maximize your readiness for financing by obtaining the proper documents and organizing all required information.