Home 2 Suites Closes with Non-Recourse Loan

We matched our Texas clients with a non-recourse loan. They were ready to purchase a Home2 Suites by Hilton, a mid-scale extended stay property.

This hotel is unique, because it is an extended stay mid-scale brand. The clients, experienced hoteliers, worked with GRP Capital to structure a somewhat complex loan.

Complex loans can be the right fix in certain situations. But you need the right team in your corner to handle all of the components.

Components of this Loan Included:

• Non-recourse. A non-recourse loan was the best match for our clients due to the complex ownership structure. This type of loan limits the sponsor’s contingent liability.

• Syndication. Our clients pooled their investment by syndicating their ownership via a GP/LP (General Partner/Limited Partner) structure. By utilizing syndication, our clients were able to amass the required equity injection.

• CMBS:  CMBS stands for commercial mortgaged-backed security. Non-recourse loans are typically CMBS-based.

Rick Patel, GRP Capital President, commented, “This loan showcased our GRP Capital teams’s ability to handle and close complex loans. We worked very diligently with the lender and the clients and all of their professionals, including lots of attorneys. With the complex GP/LP structure, we had to work very closely with all of the parties. We provided many hours of collaboration and consultation to take this loan across the finish line.”

What to Know about Non-Recourse Loans:

• What does Non-Recourse Mean? Non-recourse means that the lender’s recovery is limited to the collateral securing the loan and guarantees. Bad boy carveouts are provisions of these loans. Essentially, if the borrower is negligent or misrepresents themselves, the loan automatically becomes a recourse loan.

• What are the Main Advantages? These loans are great for partner groups, particularly syndicates. This is because each investor has limited liability.

• How are Non-Recourse Loans Priced?  Non-recourse loans are competitively priced, compared to SBA and conventional loans.

• Sophisticated Buyers Needed. The lender is taking on greater risks with this type of loan. Therefore, they expect strong borrowers. Their credit history should be excellent. Even more importantly, the borrowers need to have a viable detailed business plan.

Why Choose GRP Capital?

Our GRP Capital team specializes in crafting financing solutions tailored to each client’s unique goals.

Whether you’re purchasing, refinancing, or building from the ground up, our extensive network of lenders ensures you’ll find funding that aligns with your goals and cash flow needs.

Here’s what sets us apart:

• We save you time by researching and identifying the best funding options for your project.
• Our expertise spans various loan products—including non-recourse loans, SBA loans, bridge loans, and conventional financing—so you can navigate even the most complex transactions confidently.
• Beyond lending, we provide strategic guidance on operational decisions that drive long-term business success.