Category Archives: Consulting & Planning

The State of Commercial Lending: A Conversation with GRP Capital Management Team

It’s a New Year and time to think about new beginnings, new ventures and new business plans. 

We thought it would be a good time to check in with our GRP Capital Management, President Rick Patel and Managing Director Krishan Patel. Let’s find out what their take is on the economy and the state of commercial lending. Check in with us if you have follow-up questions. We would love to hear your business plans and our team of experts is ready to consult with you.

Here is our conversation:

Q: What are the best ways to deal with rising interest rates while seeking financing? 

Krishan: Although borrowers may not have direct control over interest rates, they can work in their favor by reducing the leverage of their transactions. With a potential recession on the horizon, banks will be under close scrutiny by regulators, leading them to prioritize making safer loans. As a result, lenders may be more willing to offer reduced rates to borrowers who are willing to take on more risk or offer a banking relationship. Banks are interested in offering incentives to borrowers to choose their institution. 

Q: What measures should business owners be taking during these times of higher interest rates? 

Rick: I tell all our clients to be strong managers. Focus on controlling expenses as much as possible. You may want to reach out to your lender. Keep them informed if you have any hardship with your interest rate. It might be the time to discuss modifying your rate if it’s workable.

Krishan: Clients also need to be watching carefully how rising interest rates are affecting their bottom lines. Interest rate increases can have a ripple effect throughout the supply chain, as companies may need to raise their prices in response. As an end seller or service provider, it is important to consider these changes. Adjust prices strategically to maintain your margins and remain competitive in the market. It is also essential to move levers with conviction, rather than reacting to changes haphazardly or without a clear plan.

Commercial Lending Options

Q: Are there any loans out there right now that can actually come down in rate or allow for earlier refinancing? 

Krishan: Conventional loans offer more flexibility in terms of interest rates and prepayment options, but they can be more difficult to qualify for. On the other hand, government-guaranteed loans may have less flexibility in terms of prepayment options, but they may be easier to access for some borrowers.

Rick: The borrower’s financial picture is really critical. A strong borrower has the leverage to find financing options through other sources, for example credit unions, community banks, CMBS and other avenues. Our team specializes in finding the best rates, which are often not the local lenders. 

Krishan: When clients come to us looking for financing, we talk to various potential lenders and try to work out the best structure. Ideally, we want to tick off the most boxes for our clients. 

Q: What types of loans are lenders interested in making now? 

Krishan: Florida, Texas, and other southeastern states have attracted lenders’ attention due to their strong economies. In addition, diversification in asset type may also be a key lender strategy in 2023 in order to remain competitive, spread risk and ensure a stable portfolio.

Rick: The truth is that lenders are looking at strong business models and strong borrowers. But that doesn’t mean that there isn’t money for people with a few dings on their credit report or those who have had some ups and down in business in the past. But in general, lenders are a little on the cautious side right now. 

Q: What do borrowers who are interested in SBA loans need to know? 

Rick: I know some borrowers want to avoid the SBA, but they shouldn’t! 

Krishan: Yes, we definitely have clients who found the SBA application process to be too tedious.

Rick: But the truth is that SBA financing may still be the perfect fit for meeting their leverage requirements (equity contribution). We find that our GRP Capital expertise takes the bulk of the burden of the application off the clients, which makes the SBA loan underwriting faster and easier for everybody.  

Krishan: Ultimately, borrowers should not see SBA loans as a burden. Rather it is an opportunity for borrowers to access the financing they need.

Rick: Borrowers should know that 7a loans have historically had variable rates. However, some of our lenders are now providing fixed rate options. We know that interest rates can also come down in the future. So we have to work with our clients to determine the right time to lock in a rate or whether a variable rate is in fact the best product. 

Q: What are the most important reasons to refinance even during these times? 

Rick: Numerous reasons. Moving from 7a loans to a fixed rate option is a great example. 

Krishan: Refinancing with non-predatory lenders or establishing new banking relationships can open up opportunities in the future.

Rick: Refinancing should always make your cash position better or allow for improvements on the property. 

Q: What’s happening with construction loans? 

Rick: It’s complicated!

Krishan: Although construction lending has slowed, lenders are carefully evaluating the ability of general contractors to complete projects in the face of supply chain disruptions, labor shortages, and rising costs due to inflation. 

Rick: If you are considering construction, you need really strong professionals advising you on all aspects of the project. You especially need professionals in budgeting and zoning. Not every lender is interested in construction projects. However we are able to place these loans with good evidence of future profitability.

New Issues and Products

Q: Are there any special programs for any specific loan sectors? 

Krishan: One area we’d especially like to break into is the USDA Food Supply Chain Guarantee. These loan products are newer to GRP but are designed to strengthen America’s food supply chain. They offer many benefits that other businesses sectors can’t capture. The program supports any businesses involved in aggregating, processing, manufacturing, storing, transporting, or distributing food. 

Q: Anything changing in the appraisal process? 

Rick: In the current economic climate, it is likely that appraisers will be more cautious in their underwriting process in order to mitigate risk. They will assume higher supply costs and higher payroll costs, just to name two categories.

Krishan: Appraisers are also considering the possibility of sustained current interest rates. And they are constantly watching the potential for inflation to erode earnings and affect discretionary spending. 

Rick: We try to have these conversations with our clients before and during the appraisal process. Borrowers need to be aware of these potential challenges. They have to clearly understand the value of the property being financed, without emotion or excitement about potential financing. 

As you can see, the current loan climate is changing all of the time. We at GRP Capital are in contact with our large network of lenders to stay on top of all of the ups and downs, new and old ways to structure loans and finding the best matches for our clients.

From Idea to Closing: The GRP Capital Loan Process

You’ve heard the phrase “the loan process”. What does that even mean to you as a borrower?

We’re glad you asked. Here’s what you need to know!

First Things First: What Is Important to You?

  • Clients come to us by contacting a member of our GRP team, either one of our business associates, our management team or any of our support staff.
  • We consider our first steps like a matchmaking process. First, we need to get to know you. What are the specific goals for your business, what kind of financing are you looking for? How do you envision your business for the short-term and the long-term?

Our Loan Process includes Expert, Personalized Advice

  • Our in-house team will begin to look at your business and your plans. We will ask questions to determine potential roadblocks and evaluate the strength of you and your business as a borrower.
  • Sometimes, we will come back to you with advice to delay seeking financing. We have advised clients to wait for their businesses to show another quarter of profitability. We also have advised clients when we believe that a purchase may be overpriced.
  • If we believe that your business plan looks strong, we will then reach out to our network of lenders to sell your story to them. It’s really important that we advocate for you with the lenders, seeking to find financing that meets your needs.

Matching You with an Appropriate Lender

  • Truly, the GRP Capital “secret sauce” is having relationships with many types of lenders. This is what saves our clients the most time and aggravation.
  • We try to find several lenders so you can choose from among a variety of loans, determining what the most important aspects are (size of loan, type of loan, schedule of repayments, monthly payment, having a relationship with the lender, etc.)
  • We have inside information in many ways, as we already know which lenders are interested in which industries and if they have geographic preferences. We also know which lenders have good reputations and have a high percentage rate of closing loans in a reasonable time frame.
  • Ultimately our lenders know that GRP Capital analyzes all of our potential clients before we begin to search for matching lenders. This analysis saves time for our lenders as they trust our ability to determine the strengths and issues that all of our potential loans have.

From Term Sheet to Closing:

  • Once you have chosen a lender, our team goes into overdrive to get you to closing.
  • Our loan processing team, led by Keren Alpert, works directly with the underwriters as well as other third parties, like appraisers, attorneys, title agents and insurance agents.
  • We work directly on your behalf, so you can work on running your business.
  • Lenders prefer to receive documents that meet their standards, are correct and demonstrate the true nature of the borrowers. Our loan processing team provides that for them.
  • Our clients may take on occasional loans. But our highly experienced loan processing team has seen it all. We can help manage the bumps along the way that can happen and guide you through the steps to take.
  • We know the process all the way until closing. If necessary, we can host closings in our office or support you as you sign documents closer to your home.

What lenders say about us:

“I wish all our clients were GRP Capital clients.”

“You guys rock!”

“They are great to work with and very responsive.”


Please let us know if you are interested in financing for any of your business projects. Any member of our GRP Capital team would be happy to help you.

Whether you are investing in your first commercial business or expanding your existing portfolio, our in-house experts can help you identify and close on the right loan for your financing needs.
Our primary mission is to provide the most responsive, client-oriented financial services by offering competitive commercial and real estate loan products through a chain of banking and non-banking networks.

How and Why we Find Lending Partners

What we do here at GRP Capital is find appropriate lending partners for our clients. But what does that mean? Why does it matter? And why would lending partners even want to work with us?

We’re glad you asked. Here’s what you need to know!

What our Lending Partners Want

  • First, lenders want to make loans in the right “buckets”. Sometimes these are for certain industries, sometimes they are in a certain geographic area. And sometimes, the desirable loans are for a certain size or a specific structure.
  • Lenders prefer to receive documents that meet their standards, are correct and demonstrate the true nature of the borrowers.
  • Lenders want to find qualified borrowers, who can pay back their loans through managing and owning profitable business ventures.

How GRP Capital and Lenders Work Together

  • Probably most importantly, our lenders know that GRP Capital analyzes all of our potential clients before we begin to search for matching lenders. This analysis saves time for our lenders as they trust our ability to determine the strengths and issues that all of our potential loans have.
  • Lenders do not have time to waste. They know that GRP Capital will not bring them loans that are not in their wheelhouse.
  • Finally, lenders are desirous of a smooth path through underwriting and closing. This is where we really do some of our finest work.

How our clients benefit:

  • Because we start off looking for appropriate lenders, we can save our clients time and money as well as finding the loan that is structured for their needs. Each loan is unique. We do not have a cookie cutter approach.
  • Our clients may take on occasional loans. But our highly experienced loan processing team has seen it all. We know exactly the expected quality and content of all of the documents that our lending partners request.
  • Our loan processing team works directly with the bank, the title company, the attorneys, the insurance agents, the accountants. We work hard so our clients can run their businesses. Our clients prefer this setup, and our clients’ comfort is preeminent.

What lenders say about us:

“I wish all our clients were GRP Capital clients.”

“You guys rock!”

“They are great to work with and very responsive.”



Please let us know if you are interested in financing for any of your business projects. Any member of our GRP Capital team would be happy to help you.

Whether you are investing in your first commercial business or expanding your existing portfolio, our in-house experts can help you identify and close on the right loan for your financing needs.
Our primary mission is to provide the most responsive, client-oriented financial services by offering competitive commercial and real estate loan products through a chain of banking and non-banking networks.

Combining Hurricane Repair and Renovation

Hurricane Ian was a big storm, causing major damage. Consequently, many business owners are working on their hurricane repair plans.

Sometimes storms come with a silver lining. This could be one of those times.

If you have a property that is in need of hurricane repairs, consider upgrading your property at the same time. You can undertake more extensive renovations, even deferred maintenance.

Actually, doing additional renovations during repairs can be very cost-effective. Your demolition costs may be lower. Your timeframe may be ideal, too. Essentially, you are combining your insurance compensation with other financing. GRP Capital can help secure financing through a new loan or a refinanced or restructured existing loan.

Preparing for Your Hurricane Repair and Renovations

  • First, determine what needs to be repaired. It’s critical to obtain multiple quotations.
  • Find out the procedures for paying for repairs. Some insurance companies have preferred providers. They may have their own forms and secure links for invoices.
  • If your repairs are extensive, you may want to hire an attorney who specializes in real estate, insurance and contracts. Critically, this attorney will work directly with the insurance adjuster.
  • Now make a list of what items you would renovate if money were no object. Choose from projects that would enhance your property or increase its value. Consider franchise renovation packages if applicable.
  • Then rank your list of projects.
  • Next, talk with trusted construction and renovation professionals. Certainly, discuss both the critical hurricane repairs and your wishlist.
  • Finally, determine how much you would save by combining projects.

Contact GRP Capital while you are gathering your data. Be sure to let us know about your repairs and your wishlist. Truthfully not all lenders show interest in every kind of loan. Fortunately, we know which lenders in our lender network are financing these combination project loans. This knowledge can save you time and money.


Please let us know if you are interested in financing for any of your business projects. Any member of our GRP Capital team would be happy to help you.

Whether you are investing in your first commercial business or expanding your existing portfolio, our in-house experts can help you identify and close on the right loan for your financing needs.
Our primary mission is to provide the most responsive, client-oriented financial services by offering competitive commercial and real estate loan products through a chain of banking and non-banking networks.

Options For a Maturing Note

If you have a maturing note, you have the following options:

  • Pay off the remainder of the loan
  • Extend the loan
  • Renew the loan
  • Secure new financing

Choosing the Best Option for your Maturing Note:

• Paying off a maturing note: If you have had a conventional or even SBA mortgage which has been paying down your debt over a long number of years, making your final payment might not be too cumbersome. Do you have a bridge loan or a construction loan? If this is the case, full payoff may not be feasible. Be aware that you will no longer have tax credits for mortgage interest, which will change your taxable income.

• Extending the Loan: This option allows you to get some extra time before making that final payment. Extension is most common when facing balloon payments. Your lender must agree to an extension; in fact, this is not automatically granted. There will likely be some additional interest charges should you choose this option.

• Loan Renewal:  Have you had a good relationship with your lender? Were your payments on time for the most part (with perhaps some pauses during COVID 19 lockdowns)? Your lender MAY be amenable to creating a new loan. This will allow you to continue to pay down debt, reducing your taxable income, while staying with a familiar lending partner. Unfortunately, there are certain industries that are coming up against lender hesitancy to renew loans, including hospitality loans.

Securing a New Loan:  If you cannot go back to your current lender, you must secure new financing. Because of higher interest rates, this is the time to seek advice and figure out the best options.

GRP Capital can be of assistance. We will examine restructuring and reach out to lenders to determine what financing options are likely to be approved. Our team will consider if you should refinance existing debt, retire part of it or even restructure it. In addition, we can help evaluate your financing and cash flow needs. You will have a better sense of what type of financing options exist and choose the best one for your business.

If you would like to discuss your maturing note or any other business issues, feel free to contact our team.  An initial business evaluation is complimentary.

Is It Time to Refinance Your SBA 7a Loan?

Do you have a Small Business Administration SBA 7a loan that is at least three years old?

Have you been meeting your business plan goals and objectives?

Now is a good time to examine what the options are for refinancing your SBA 7a loan.

Timing an SBA 7a Refinance

• Three years: SBA 7a loans have prepayment penalties for the first three years. Therefore, we advise most borrowers to wait until the three years have elapsed before seeking refinances. There are a few select cases, however, where the prepayment penalties are worth it.

• Do you have evidence of meeting profit targets? If you are looking to refinance a loan, lenders need evidence that your business is largely on target. We find that lenders are willing to overlook the market disruptions of COVID, especially during mandatory lockdowns. Other than that, your financial statements should demonstrate sustained profitability. In addition to financial statements, lenders and appraisers typically require evidence from third parties. These can include STR reports or sales tax bills based upon revenue receipts.

• Debt Coverage:  The most important factor in finding affordable, reasonable loans is your current debt coverage. Lenders are not impressed just with the value of your property. In this somewhat volatile economic milieu, demonstrating the ability to pay back loans and having capital reserves is key.

Debt Refinance Possibilities and Other Structures:  We can help you determine the best next steps. It might be to refinance existing debt, retire part of it or even restructure it. We can help evaluate your financing and cash flow needs. You will have a better sense of what type of financing options exist and choose the best one for your business.

If you would like to discuss your SBA 7a loan or any other business plans, feel free to contact our team.  We can conduct a business evaluation, reach out to our lenders, offer advice on bidding and secure financing for you. An initial business evaluation is complimentary.

Do I Really Need a Survey?

What is a survey and do I even need one?

Whether you are buying or refinancing a current business that includes commercial real estate, you really do need a current survey. In fact, most lenders and title officers require a survey.

What Does a Survey Do and Why is it so important?

• Boundaries: The basic purpose of a survey is to show a detailed drawing of your entire property with all of its buildings and improvements. The survey will clearly delineate where your property begins and ends. The survey will be on record and show that you have clear legal ownership of everything within these boundaries.

• Encroachments: An encroachment indicates a place where ownership of a property crosses a boundary line. So maybe there is a shared septic tank with the neighbor and part of that infrastructure is on your property. The survey would show that encroachment and the title company would “insure around that”.

• Easement:  An easement is a section of your property that is carved out for somebody else’s access and use, typically a utility company. So if you have buried cables or an alleyway, sometimes there are easements here. You own the full property, but the easement designates a place that a third party has access to and sometimes even control over. Again, these would be clearly labelled on a survey and title insurance insures around this.

How much time does it take and how much does a survey cost?

• Don’t leave me hanging; what does it cost and how long will it take? Surveyors are professionals. They have to determine the scope of the survey, do research about the boundaries of your property, search city or county records for previous surveys, go to the site, draw the survey and obtain approval from the title officer and the lender of their final survey. Therefore, a survey typically takes at least four weeks and sometimes much longer in different marketplaces and different seasons. The costs can vary but are typically under $10,000, depending on the complications of the building and prior documentation.

• ALTA surveys: There are different types of surveying tools. However, we recommend that borrowers purchase an ALTA (American Land Title Association) survey. These surveys conform to the industry standards and even have a standard document (Table A) which lenders, title officers and surveyors use to communicate about what information they require.

• Are there any ways to save money and time?  The best way to save money and time is to make sure that a relatively current survey has already been done. So if you are refinancing and you never got a survey when you bought your property, arrange for a survey right now! If you are buying a property, ask the seller if there is a current or even an old survey. We often are able to contact the previous surveyor and obtain an updated, re-certified survey, which will save lots of time and money.

If you would like to discuss surveys, title issues, closing, refinancing and purchasing or any other business plans, feel free to contact our team.  We can conduct a business evaluation, reach out to our lenders, offer advice on bidding and doing your due diligence and secure financing for you. An initial business evaluation is complimentary.

Purchase Sale Agreements (PSA) Done Right

When you purchase a land and its business, you must create a purchase sale agreement (PSA).

What does this PSA need to contain to satisfy lenders, appraisers and attorneys?

Purchase Sale Agreements must have:

  • The correct name of the buyer and the seller. This may seem obvious, but often individuals make offers on purchases. However, their business will ultimately be buying the property and taking out the loan. So the buyer should be the business and not the individual. But don’t worry. This occurs so often that the parties typically amend the PSA later (see below).
  • The purchase price. The appraiser and the lenders (and the SBA if this is an SBA guaranteed loan) need to know how much you have agreed to pay for the property and/or business. This number will affect the amount of the loan. In addition, if an appraisal shows the value of the property to be less than the PSA, everybody will have to go back to the drawing board to renegotiate.
  • The date the purchase sale agreement expires. As a buyer, give yourself enough time to secure financing and to close the deal. Simple undeveloped real estate can close more quickly than buildings and businesses that require more complex appraisals and due diligence.

When you need to make changes…

A PSA is the first start of the purchase and getting financing. They are rarely perfect. It’s fairly straightforward to make changes to satisfy all of the parties. Here’s a few that occur often.

Typical Amendments:

• Assigning the Loan: If the original PSA shows the buyer (a person, not a business), then you will need to amend the PSA. This amendment is called an “assignment” and assigns the loan and the buying of the property from the individual to the business or the borrowing entity.

• Price Breakdown: Many times, lenders and attorneys want the purchase price to be broken down. How much is the land worth? What is the value of furniture, fixtures and equipment? What about inventory? Lenders often have preferences about price breakdowns or allocations, so this is another area that is often amended later in the underwriting process.

• Extending the PSA: Certain components during underwriting can delay the loan and the closing. These include lack of a survey, difficulties obtaining documents from buyers and sellers and even discoveries of issues during the environmental site assessment. When these bumps in the road occur, the buyer and seller need to agree to extend the PSA just a bit.

If you would like to discuss financing your future business plans, feel free to contact our team.  We can conduct a business evaluation, reach out to our lenders, offer advice on bidding and secure financing for you. An initial business evaluation is complimentary. We have a network of lenders for acquisitions, refinances and construction projects.

How to Prepare for an Appraisal

Whether you are buying, selling, refinancing or building, your lender will typically require an appraisal. What do you need to do to prepare for the appraisal? What is changing in the world of appraisals?

We’ve got your answers!

When a lender agrees to begin the underwriting process on a new loan, they will order the appraisal. The lender chooses the appraising company, often in a blind bid process. This means that they let several companies submit their fees and their turnaround time. The lenders then choose which company they want, based upon their budget and timeline.

We have noticed that there are certain areas of the country that do not have enough appraisers. Therefore, appraisal timelines have increased. Make sure you can account for the time it takes an appraisal as you are making your business plans.

The Purpose of an Appraisal:

  • Determine value of the property: Essentially lenders have to determine the value of your property and its potential as a business or home base for a business. Lenders will not loan money greater than the value of the property.
  • Appraisals also consider the business plan going forward, evaluating the financials, management and even market conditions.
  • Consider all types of values:
    • The appraiser will determine the value of a property and business as-is (with no renovations or changes in business practices).
    • An appraisal also delineates an enhanced value (with completed renovations and even changes in operations, including marketing).
    • Finally, the appraiser will calculate how much a property and business would be worth if it had to be sold very quickly due to the borrower’s inability to make loan payments.

Prepping for the Appraisal:

• Instructions for Sellers: If you are the seller, you want your property to appraise well, because you want the buyer to to be fully funded. So make sure your property is clean and well-maintained. Be prepared to show off your property to your appraiser. They will want to see samples of all areas, including public areas and “back of the house” sections. Be helpful about turning in documents so the appraiser can write their report. These documents will include current financials, information about the building, and surveys, among other requests.

• What about Borrowers? Borrowers need to be prepared to meet with the appraiser to tell them their vision. Do you have new ideas do you have for enhancing revenue and controlling expenses? What renovation are you seeking funding for? What strengths do you personally have in ownership and/or management of similar businesses and properties?

• A Note on Property Condition Reports: Borrowers can arrange for a PCR (Property Condition Report) even during the bidding stage, before there is a Purchase Sale Agreement. A PCR does not examine the finances but gives honest and independent feedback to the borrowers on the property’s true condition and what maintenance and renovation needs to be done immediately, in the short term and the long term.

If you would like to discuss financing your future business plans, feel free to contact our team.  We can conduct a business evaluation, reach out to our lenders, offer advice on bidding and secure financing for you. An initial business evaluation is complimentary. We have a network of lenders for acquisitions, refinances and construction projects.

Money growing

Looking for Loans when Interest Rates are High

We at GRP Capital are not in the business of predicting the future. However, the Federal Reserve has indicated that interest rates will likely continue to be on the higher side through the summer and maybe longer.

How do these higher interest rates affect you? More importantly, what are the best business decisions you can make right now?

Are you looking to purchase an existing business with commercial real estate? Or do you already own a property and are facing an upcoming loan maturity? Are you trying to figure out the timing of a refinance or considering remodeling or reflagging, rolling that into a refi?

Factoring Interest Rates in Your Business Decisions:

  • Be realistic about business expenses. Simply put, if you are contemplating a purchase of a new business or refinancing a maturing note, you need to know how much a loan will cost you. Fortunately, our GRP Capital team can help you look at options. We will examine possible loan terms, so you can know the nuts and bolts. What will the monthly payment be? Is that a reasonable price to pay?
  • Determine your Debt Coverage, not just a property’s Loan to Value: Many business owners and borrowers get very excited about appraisals and how properties are priced. Indeed, lenders do want to see a property with a value that is greater than the loan. However, for certain businesses, especially hospitality, lenders are no longer satisfied with appraised values. They are more concerned with what we call DSCR, which is Debt Service Coverage Ratio. How much of the value of the business and of your own net worth will be on the hook to pay for financing? Is this a reasonable figure? Is this an appropriate risk for the lender?
  • Fixed versus variable interest rates: It might make sense to bet on interest rates going down in the future, but that is a risk. On the other hand, choosing a long-term higher interest rate can also be costly.
  • Bridge loans. Sometimes a transaction needs to occur quickly. This is especially true if the seller is courting multiple buyers and the first one in the gate gets the deal. Basically, bridge lending offers a quick, temporary solution, but sometimes with a high short-term interest rate. It might be a viable option right now when interest rates are already high.

Variables to Consider during Periods of Higher Interest Rates:

• Interest Rate: Duh! What is the rate and is it fixed or variable? Be sure to understand how your lender calculates a variable interest rate. Is there a floor or a ceiling?

• Prepayment Penalties: Many loans have a prepayment penalty if you exit the loan quickly. If you are looking at a loan for a short term, be sure you consider this aspect. It may not make sense to exit a loan when you consider the penalty.

If you would like to discuss loan options or any other business plans, feel free to contact our team.  We can conduct a business evaluation, reach out to our lenders, offer advice on bidding and secure financing for you. An initial business evaluation is complimentary.