Category Archives: Closings

Orlando skyline

Bridge Financing for Orlando Hotel

An Orlando client faced a serious loan concern and needed immediate bridge financing. His loan was facing a maturity and the current lender was not interested in refinancing.

Rick Patel, GRP Capital President noted, “Several of our recent hospitality clients are experiencing similar circumstances. The hospitality lending scene is changing and constricting actually. Lenders’ appetite for hospitality is shifting. Certain lenders’ “hospitality buckets” are filling quickly while other lenders are showing greater interest in hospitality. What we provide for our clients, including this one, is industry knowledge. That means we know which lenders to turn to for financing, including bridge financing.”

The bridge financing paid off the previous loan and also provided some needed working capital.

Bridge Financing Basics

  • A bridge loan creates a bridge between a project that requires funds and the necessary financing.
  • Bridge financing is temporary.
  • Obtaining a bridge loan allows the loan to close quickly; therefore you can create the time you need to secure permanent financing solutions.
  • These interim loans often have short term higher interest rates. The borrower understands this is the cost of interim funding.

Reasons for Bridge Financing:

  • Need for immediate closing due to seller demands.
  • Lender Dropout! The lender stops the process during underwriting, putting the entire loan in jeopardy.
  • Quick closing requirements, as buyer wants to use 1031 funds.
  • Buyer demand: The buyer has to have this property and it has to close now! Sometimes our clients will see an underperforming property that has just come on the market. Or they have had their eye on a competing business and knew they wanted to purchase it if it were for sale. These buyers are seriously motivated!
  • Competitive bidding: sellers will often entertain multiple bids from multiple buyers. Being able to close quickly may seal the deal.
  • Our clients may want to use SBA (Small Business Association) guaranteed loans or HUD (Housing and Urban Development) loans or Department of Agriculture loans (for rural properties). These government backed loans take a little longer to close. Clients who use bridge lending can close quickly and then refinance the loan through these agencies.
  • Businesses that need to stabilize. We have many clients who are very talented owners and managers. But new businesses can be risky and lenders can be risk-averse. If borrowers take possession of a business, turn it around and stabilize it, their business can be more attractive to lenders in the near future.

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, renovating 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.

Bridge Financing for Large Hospitality Loan

Our long-time clients had a vision for a Gulf Coast hotel. They knew that they would require a large hospitality loan. Securing financing in the hospitality industry has become a little more difficult. As a result, they depended on GRP Capital to do the research to find an appropriate lending partner.

This hotel property shows great promise as it is situated near a brand new planned exit ramp. In addition, the borrowers had detailed plans to create a dual brand flagged hotel. After renovations, floors would alternate between traditional guest rooms and suites. This will provide two price points and two unique choices for travelers and guests. At the same time, the hotel would be utilizing the same staff and management company.

The bridge financing will provide resources for the full renovation and allow time for the borrowers to execute on their business plan. In addition, this will give the partners time to stabilize the asset and secure permanent financing.

Rick Patel, GRP Capital President, commented, “This $12.5 million loan showcased our GRP Capital teams’s ability to handle and close a large hospitality loan. We found a new to us lender in our network. This lender had the appetite for a large hospitality loan. They worked closely with our team and the borrowers to understand their vision and fund it.”

Bridge loans, including large loans such as this, are great options for financing, especially during the current government shutdown. Diversifying your portfolio from smaller SBA-guaranteed loans to a larger hotel or a more premium class one can be a very positive business decision for savvy entrepreneurs. 

If you are interested in non-SBA loans, particularly bridge loans, reach out to our team right away. 

Renovation Funding Basics:

• Secure a general contractor if one will be needed. Many lenders require general contractors for large renovations, particularly if there will be architectural changes. Even if you have reliable maintenance staff who can handle large jobs, you may still need to bring in a GC.

• Stay on top of budgeting. If your loan will include renovations, the lender needs many details. Most importantly, they need the components of the renovation broken down by line item, materials and labor. And if this changes through the underwriting process, the budget has to be revised.

• Determine down time:  Will renovations affect your business? Will you be able to have customers or will you be partially open for business? Be sure that your financial projections and your timeline are clear, so the lenders can build in interest free periods while you are not taking in revenue.

More information on Bridge Financing

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, renovating 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.

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.

New Hampshire Franconia near Parker's Motel

New England Hotel Loan Closes

Can you picture the changing leaves at a picturesque New England hotel, one that you now own?

Our clients, one of whom already owned a New England hotel, had their eyes on a nearby property. When it finally came on the market, they jumped at the chance to purchase. They had a vision to dominate the local market and to use their management skills to successfully add a second hotel to their portfolio.

The new hotel is located just outside a very popular state park and is situated in a beautiful mountain setting. The tourists who purchase hotel rooms are avid hiker and skiers, as well as leaf-peepers, those who come to see the fall foliage.

Ryan Dumas, Senior Associate was very pleased to close this loan quickly and smoothly. “My clients really know this area well. Even more importantly, they had done their homework on this specific New England Hotel. They knew what they could do to become more profitable. They have a very workable vision to increase the revenue of this hotel right away.”

The GRP Capital team and the lender worked quickly to underwrite this loan. The result was that in under 30 days, the borrowers went from signing with a lender to having a commitment letter in their hands.

FAQs on Funding Independent Properties:

• Why is it harder to finance my independent hotel? Many lenders are skittish about hospitality loans in general. Independent hotels have to especially prove themselves to lenders. The owners have to demonstrate good traffic to booking sites as well as solid hotel statistics. Our team worked closely with the lenders, regarding the loan above. We showed them occupancy taxes and hotel statistics on the current property. In addition, our partners shared their success with a nearby independent property.

• What can I do if I want to eventually refinance or sell my independent hotel? Keep really good records. Make sure you have monthly financial statements. And be sure that your front desk system allows you to create meaningful hotel statistics. The statistics should include occupancy, ADR and ReVPar. You might even want to enroll in STR reporting, just so you have information about your property’s performance compared to the marketplace. This is less useful in isolated settings.

• Are there advantages in being an independent hotel?  Franchise fees can be expensive. In addition, franchise-required PIP (Property Improvement Plans) can also be time-consuming. Remaining independent can save you money. However, hotel owners have to balance the cost savings with the loss of traffic and marketing that many franchises provide. Independent owner operators must be dialed in to their online presence and constantly tweak their rates compared to the competition.

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 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.

McKinney, Texas Success Story: High Growth Market Opportunities

At GRP Capital, we take pride in helping our clients turn their business visions into reality. Recently, we had the pleasure of working with experienced entrepreneurs ready to leverage their hospitality expertise in McKinney, Texas—a rapidly growing city with immense potential.

Located just north of Dallas, McKinney stands out as a unique and thriving location. McKinney’s population has doubled in the past 20 years, far outpacing many other metropolitan areas. McKinney offers significant opportunities for businesses looking to grow. This is due to its proximity to a major urban area combined with its strong local economy.

Our clients identified an upper midscale hotel property in this high-growth area and envisioned taking over operations through a turnkey transaction. Their plan included reflagging the property and driving revenue growth almost immediately.

Rick Patel, GRP Capital President, commented, “These clients were motivated and had done extensive research on the McKinney market and this specific property. The deal was complex but our lender network and the SBA were equally enthusiastic about funding a project in such a dynamic area. Ultimately, we secured funding through the SBA 504 program. This loan offers competitive rates and long-term stability for projects like this.”

How to Identify High-Growth Markets Like McKinney:

• Analyze recent and historical trends. Study population growth, housing trends and employment opportunities in the area. Is the region expanding or stabilizing? For hospitality businesses, consider whether the local demographics support activities like sports tournaments or large group events. Look for nearby attractions that could drive additional traffic to your business.

• Assess Business-Friendliness. Investigate how supportive the local government is to new business ventures. Are business licenses easy to obtain? What zoning restrictions might you face? A business-friendly environment can significantly impact your ability to operate efficiently.

• Evaluate Workforce Availability:  Hiring and retaining quality employees is essential for success. Ensure that there is an adequate local labor pool to meet your staffing needs. Additionally, consider whether hourly workers to live nearby or if long commutes might pose a challenge.

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 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.

If you’re ready to explore opportunities in high growth markets like McKinney or anywhere else, our team is her to help you achieve your business goals.

Florida hotel financing showing random pier

Florida Hotel Financing

At GRP Capital, we know Florida hotel financing. In fact, we specialize in helping businesses thrive in the dynamic Florida hospitality market. While we are a national company with a track record of closing loans across the United States, our expertise in Florida’s hospitality sector sets us apart. We understand the unique nuances of this diverse market and are proud to support entrepreneurs pursuing success in Florida’s hospitality industry.

Recently, our client came to us, needing to refinance his independent hotel loan. His property was in the economy tier and the location was not in one of the highest density tourist areas. These Florida hospitality financing projects can be challenging to match up with lenders. But our team worked hard to place and close the loan.

Rick Patel, GRP Capital President, reflected on this loan and GRP Capital’s deep roots in the Florida hospitality marketplace.

“Our team has closed hundreds of Florida hospitality loans, making us a leader in the Florida hotel financing industry. Lenders acknowledge our expertise and turn to us, especially when financing atypical properties. This particular client wanted to move away from a seller note, as he wanted a traditional banking relationship. This is not unusual: seller notes and non-traditional lenders have their use. However, many clients want to migrate from a personal relationship with a lender. This property, although profitable, was independent and off the beaten path. We pursued financing with a lender who knew our team well and was willing to take on a slightly riskier loan.”

Florida Hotel Loan Basics:

• Florida is many markets. Florida is a large, populous state. As a result, the Florida hotel financing marketplace is varied. Some lenders prefer coastal properties, while others focus on inland or independent businesses. Understanding these preferences is crucial for securing financing.

• Insurance Requires Planning  The insurance landscape in Florida can be challenging. Many lenders require wind coverage, which can be costly. Collaborate with a trusted insurance agent. Obtain accurate quotes and ensure that your business plan accounts for all insurance costs.

• Seasonality Matters:  Florida properties often experience pronounced high and low seasons. Some hotels rely on large group events during slower periods. Research your property’s market drivers, such as major clients or recurrent events to develop a realistic revenue strategy.

Our GRP Capital team specializes in finding tailored financing solutions for every project.

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 how we add value:

  • We save you time by researching and identifying the best funding options for your unique project.
  • Our expertise spans various loan products—including SBA loans, bridge loans, and conventional financing—so you can navigate complex transactions confidently.
  • We provide guidance not only on lending but also on operational and strategic decisions that impact your business success.

If you’re considering becoming a first-time or repeat hotel owner in Florida or beyond, let’s discuss how we can help you achieve your business goals.

State Flag of Florida; we specialize in Florida hospitality

Capitalizing on Florida Hospitality with GRP Capital

At GRP Capital, we specialize in helping businesses thrive in the dynamic Florida hospitality market. While we are a national company with a track record of closing loans across the United States, our expertise in Florida’s hospitality sector sets us apart. We understand the unique nuances of this diverse market and are proud to support entrepreneurs pursuing success in Florida’s booming hospitality industry.

Recently, we had the privilege of assisting a client who was ready to make his mark in the Florida hospitality scene. With prior experience managing multi-family residential properties up north, he sought to transition into hotel ownership in Florida. His goal? To combine his operational expertise with his love for the Sunshine State.

Krishan Patel, GRP Capital Managing Director, reflected on the partnership:

“We love working with clients who bring strong skills from other industries and are eager to apply them to new ventures. This client was organized, well-capitalized, and determined. He had done his homework and was ready to embrace the challenges of entering a new business.”

The GRP Capital team guided him through the complexities of securing a hospitality loan. These included connecting him with a lender and a network of other professionals like surveyors and title officers was also helpful. Today he is successfully managing his independent East Coast hotel, just in time to profit from Florida’s high season.

Florida Hospitality Basics:

• Florida is many markets. Florida is a large, populous state. As a result, the marketplace is varied. Some lenders prefer coastal properties, while others focus on inland or independent businesses. Understanding these preferences is crucial for securing financing.

• Insurance Requires Planning  The insurance landscape in Florida can be challenging. Many lenders require wind coverage, which can be costly. Collaborate with a trusted insurance agent. Obtain accurate quotes and ensure that your business plan accounts for all insurance costs.

• Seasonality Matters:  Florida properties often experience pronounced high and low seasons. Some hotels rely on large group events during slower periods. Research your property’s market drivers, such as major clients or recurrent events to develop a realistic revenue strategy.

Our GRP Capital team specializes in finding tailored financing solutions for every project.

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 how we add value:

  • We save you time by researching and identifying the best funding options for your unique project.
  • Our expertise spans various loan products—including SBA loans, bridge loans, and conventional financing—so you can navigate complex transactions confidently.
  • We provide guidance not only on lending but also on operational and strategic decisions that impact your business success.

If you’re considering becoming a first-time or repeat hotel owner in Florida or beyond, let’s discuss how we can help you achieve your business goals.

Collateral and a Central Florida Refinance

Collateral is an important part of many business loans. Your collateral “secures” your loan. It is the tangible “thing” that the bank knows has value.

Our Central Florida client was ready to refinance. Their business has been successful, with over a decade of stabilized income. The new loan was structured to free up capital for other business projects.

However, our client’s property, a waterfront hotel, consisted of multiple parcels. The hotel did not operate on every parcel, but they leased out other parcels, including a nearby boat dock. Even more significantly, their revenues included these lease payments.

Many lenders insist on including every single parcel in their loan, especially when those parcels are a revenue source. But including every single parcel in this collateral was not ideal. First of all, it would be complicated. Additional parcels mean additional title and survey work. And each parcel has to be appraised.

GRP Capital was able to work with our lender. We demonstrated that the hotel parcel alone had high value, enough to collateralize the loan. Working with our lender and building on the trust we had developed with them was crucial. It kept the loan as simple as possible and preserved our client’s collateral, too.

Collateral Basics:

• Your collateral will be appraised. An appraiser will determine the value of your collateral. This value has to meet or exceed the value of the loan.

• Collateral Shortfalls  Sometimes collateral values come up short. This happens. When it does, there are a few options. If this is an acquisition, the buyer may be able to renegotiate a discount on the sale price. Alternatively, borrowers can offer other assets as temporary collateral, while the loan is being paid down. Finally, some clients take out a small life insurance policy to obtain extra collateral.

• Consult experts before signing a PSA:  A PSA (Purchase Sale Agreement) makes assumptions about collateral. In addition, a PSA often requires “hard money”, a non-refundable amount. Therefore, if you can, contact GRP Capital prior to signing a PSA. We can save you money, especially if we believe the price is not going to be appraised to fully collateralize.

Our GRP Capital team specializes in finding the right lender for each project. We save our clients time and money, as we research the best choices for their funding sources. Our experience allows our clients to find funding that is project-appropriate and will allow for sufficient cash flow. Whether you are looking to refinance or purchase or engage in construction, we would love to discuss your business plans with you. If you are considering becoming a first-time (or second or third time!) buyer, we can assist you.

Refinance for cash out

Cash Out with a Refinance

Our client needed to pull cash out to upgrade their hospitality property but could not refinance due to the structure of their debt.

The amount they needed for their cash out was smaller than our typical loans. However, this was a repeat client who had approached us, seeking our counsel. Our management team looked carefully at all of their businesses and discovered a possibility. They owned an office building which was eligible for refinancing. There was even sufficient equity to pull out cash during the refinance.

Our client was pleased to close the loan and begin their upgrade.

GRP Capital is celebrating its tenth anniversary in 2024. This longevity has allowed to us to deepen our list of repeat customers. This benefits everybody.

Repeat Client Benefits:

• We know you! Our repeat clients are already “in the system”. We have their pertinent information, we understand the structures of their businesses, we even know who their team of professionals are. The “getting to know you” phase is already taken care of. We know what aspects of this process are easiest for you and your team and which present challenges at times. We are prepared for potential bumps in the road. Particularly with refinances and those with cash out components, this is critical.

• You Know Us!  Repeat clients know the “GRP Capital way”. You know how we match you with a lender, how we internally underwrite your file and how we process loans. There are no surprises as you already know how we communicate and the roles we have from business associates to credit analysis, from management to loan processing.

• We know your people:  If we have closed loans for you in the past, we may already have dealt with your attorney or your accountant. We already have emails for your insurance agent, your title agent and your franchise representative. Knowing how all of these professionals handle their business allows for seamless operations.

Our GRP Capital team specializes in finding the right lender for each project. We save our clients time and money, as we research the best choices for their funding sources. Our experience allows our clients to find funding that is project-appropriate and will allow for sufficient cash flow. Whether you are looking to refinance or purchase or engage in construction, we would love to discuss your business plans with you. If you are considering becoming a first-time (or second or third time!) buyer, we can assist you.

Cash out for refinance

1031 Exchange for New Florida Hotel Owner

Our Florida client came to us with a 1031 exchange.

The client was getting ready to sell a Georgia property. They were using the proceeds to purchase a new hotel in central Florida. To minimize their tax exposure, they were utilizing a 1031 exchange.

A 1031 exchange, also known as a like-kind exchange, is a real estate investing tool. It allows investors to swap out one investment property for another, deferring certain capital gains taxes. 

Our entire team worked closely with our client, always mindful of the 1031 exchange deadline.  He is now the proud owner of his hotel. He is very skilled at increasing profitability and is ready to take on the challenges of his new property. Our client was appreciative of the availability of the entire GRP Capital team, even exclaiming, “You always are there for me. I appreciate what you are doing.”

Tips for Handling a 1031 Exchange Deadline:

• Secure specialized help. Be sure your attorney has experience with 1031 purchases and sales. In addition, be careful when choosing a title company for the sale of your property. Be sure they have the ability to hold the proceeds in escrow as you wait for the purchase to go through.

• Know your deadline. Many business owners have their eye on purchasing a new property. Sometimes, they plan to sell another asset for their equity injection. That is a great plan. However, make sure the loan is feasible, and that a lender can close the loan to meet your 1031 exchange deadline. The SBA (Small Business Administration) is still a great resource for hotel loans, but be aware that SBA loans take a bit longer to close, especially 504 loans.

• Get all of your own financial documents ready:  Lenders will require taxes to be filed (or extensions), as well as financials that are less than 90 days old. Work with your accountant and other professionals and let them know your 1031 exchange deadline.

• Make it legal:  Work with your attorney so that your borrowing entity has an operating agreement or bylaws, is registered in the correct state and can be licensed correctly. 

Our GRP Capital team specializes in finding the right lender for each project. We save our clients time and money, as we research the best choices for their funding sources. Our experience allows our clients to find funding that is project-appropriate and will allow for sufficient cash flow. Whether you are looking to refinance or purchase or engage in construction, we would love to discuss your business plans with you. If you are considering becoming a first-time (or second or third time!) buyer, we can assist you.