Category Archives: Hospitality

Tennessee Hotel Loan Closes: the New Normal

Perhaps your have heard the phrase: “The New Normal”. But what does it mean?

In the world of finance and loans, the new normal means the current economic climate. This new normal means that conditions can change. Therefore, borrowers and lenders have to be flexible and nimble. Finally, lenders have become somewhat conservative, which can affect the loan process.

Our clients worked closely with Senior Associate Ryan Dumas in order to refinance their Tennessee hotel. Like many hotel owners, they also had more than one mortgage, one of which was modified. In addition, they also had an EIDL (Economic Injury Disaster Loan) from the Small Business Administration. These components all had to be underwritten by the lender. The lenders needed to be reassured that the hotel was currently profitable and would continue to be. Our job was to provide the documents to support this.

Ryan admired the clients and remarked, “They really knew their hotel well and were super organized. Lenders have gotten a little bit picky recently, but this client was ready for all requests. They refinanced their two mortgages and are still paying off their very low interest EIDL. We closed efficiently and the borrowers were able to take a quick vacation to celebrate.”

New Normal FAQs:

• Be organized. If you are considering obtaining a loan for a purchase or a refinance, get your documents in order. Lenders will want to see P&L’s and balance sheets. In addition, some lenders are actually asking for monthly operating expenses particularly for 2021 to show how your business rebounded.

• Global Cash Flow is Key! Do you own multiple companies? Many business owners do. If you are seeking financing, you will have to submit significant financial information for companies that you own 20% or more of. In addition, the lender will want to see that you can afford your many businesses. They will look at all of your profits across all the companies as well as all your outstanding debt.

• Get your accountant on board! When it’s time to find financing, you’ll need a great accountant as a partner. You will need updated financials (even if you typically only receive these quarterly). Also make sure that the copies you have of your tax returns match what was actually filed and are not just drafts. (This has happened multiple times!!!)

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, 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.

Georgia Hotel Turnaround: Expert Owner Now in Place

Our East Coast clients, experts in hotel turnaround, were ready for a new business venture. They had been looking at various areas and had been eyeing the I-75 corridor. They were particularly interested in a property that could easily become even more profitable.

These particular clients have become well-known and recognized for excellent customer service. Specifically, they have perfected the art of garnering good online reviews, parlaying this into increased occupancy and market share.

Our clients were familiar with GRP Capital, because they were sellers in a previous transaction. They quickly called Senior Associate Ryan Dumas to tell them about their business plans.

Ryan Dumas really appreciates the hard work and the special attention that these clients give to their hotels. Ryan said, “It was very easy to get a lender excited about this project, once they understood our clients’ strengths. We found them a lender who was willing to take on an undervalued property. The lender believes that the new buyers will be successful in creating a strong, profitable hotel.”

Special Considerations for a Hotel Turnaround:

• Strong Management Resume. If you are considering purchasing an underperforming business of any kind, be able to showcase your business plan. Refine your management resume so it emphasizes your management strengths. Work with our GRP Capital team to create a stronger business plan, which demonstrates how your ideas will translate to higher profit margins.

• Don’t be humble; brag! Be sure that the GRP team and the lenders know what you have done in the past to overcome challenges in owning and managing a business. How have you handled renovations or staffing issues? What about a less than stellar online review? Make sure you have a record of the benefits of the positive actions you took.

• Choose your new business carefully. No matter how strong you are as a manager, not every business can be saved. Let us evaluate a business with you, so we can be sure that there are not endemic issues that will be too difficult to overcome. Our business evaluation services are free.

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, 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.

All Weather Focus: Loan Closing No Matter What

Sometimes a loan closing poses unexpected challenges.

Our Florida-based clients were used to Florida weather.

But they weren’t counting on a hurricane during the underwriting process.

GRP Capital stayed focused during the entire loan process , as loan closing was the key to this refinance and partnership buyout.

As it turned out, the property had minimal damage and only suffered from some short-term power outages. The storm, however, delayed the appraisal and Environmental Site Assessment (ESA) reporting. When there are large storms, appraisers and environmental engineers are in high demand.

GRP Capital stayed in touch with the lender, the clients and all of the third party vendors to make sure everybody prioritized this closure.

GRP Capital President Rick Patel worked closely with the clients and the other stakeholders, too. Rick noted, “This loan closing was very important to the client partners. The ownership of the hotel had changed and we needed new financing with correct guarantors. With our guidance, the loan closed in a reasonable time, despite rather challenging circumstances in the region.”

What to do if your Property Has Damage from a storm?

• Communicate with your lender or ask GRP Capital to: Lenders and borrowers are not adversaries, but business partners in a way. Lenders deserve to know if your business has sustained damage, which will affect your bottom line. Lenders can be your advocates. Helpful lenders can suspend payments, extend a loan or even restructure a loan to include repairs that won’t be covered by insurance.

•  Combine storm damage repair with a PIP:  Believe it or not, storm damage can actually be an opportunity. If you have always wanted some renovation, consider the timing. Renovating during repairs might save you money. .

•  Hire an attorney: An attorney can work with your insurance company to protect your interests. He or she will also review any contracts. Most importantly, attorneys will remove any liens that are placed on your property during the repair process.

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 for purchase, refinance and construction loans. Our experience allows our clients to find funding that is project-appropriate and will allow for sufficient cash flow. If you are considering becoming a first-time (or second or third time!) buyer, we can assist you.

Florida Beach Hotel Loan Closes

Our clients were looking for a Florida beach hotel. When this one came on the market, they were ready to pounce. The hotel is on a small island with very few other hotels in direct competition. The clients have retained the current management. However, they have set up new incentives in order to increase occupancy and garner even better online reviews.

GRP Capital President Rick Patel worked closely with the buyers, as well as many other participants in the loan process. These included the insurance agent, the accountant and the various attorneys. Rick stated, “This hotel was a high value property because of its position in a limited marketplace and its potential for profit. With these larger transactions, there are even more details that we needed to be on top of. I was proud of our team for closing the loan as quickly as possible, locking in the interest rate. I know our clients are happy with their new business and are ready to capitalize on their acquisition.”

Issues Unique to Beach Hotel Loans

• Staffing and management : Some beach properties are far from affordable housing and some are not. Be aware that you will have to find staff who can afford to live within commuting distance. Some business owners are even reserving housing for key staff members as an added benefit.

•  What’s the insurance claim history of the property?  Many coastal properties have a history of moderate or even significant damage from storms and flooding. Find out about any recent insurance claims. Make contact with the current insurance agent to obtain a quote and compare that with any from an agent you are currently using. Make sure you factor in the insurance costs when you are evaluating financial statements and expenses.

•  What happens during the off season? Many properties with high tourist occupancy have a high season and a low season. What is the occupancy “out of season”? What can be done to increase occupancy and maintain ADR?

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 for purchase, refinance and construction loans. Our experience allows our clients to find funding that is project-appropriate and will allow for sufficient cash flow. If you are considering becoming a first-time (or second or third time!) buyer, we can assist you.

We Were Rushed; Seller Needed to Close Quickly

Our clients wanted to purchase a Gulf Coast hotel, but they needed to close quickly. The sellers were ready not only to sell, but to purchase another property. Not surprisingly, the sellers needed the proceeds from the sale of this hotel to fund their new enterprise.

GRP Capital was ready for this mission!

GRP Capital Managing Director  Krishan Patel, GRP President Rick Patel and Loan Processor Keren Alpert were in constant communication with each other. The team also worked in tandem with the buyers, the sellers, the attorneys, the lender and the title company. Therefore, the loan was able to close quickly, allowing the sellers to take their proceeds. Even better, the buyers have taken on a very profitable hotel, which is newly renovated and should continue to cash flow nicely for them.

Rick Patel stated, “We really worked diligently as a team to expedite this loan and close quickly. We knew how important it was to the seller and the buyers. We want to do what we can to support the closing process. As a result, the seller and the buyer can preserve their good relationship with each other. We were very pleased with the time frame and the outcome.”

Is it possible to close quickly?

• Is the title report clean? A “clean” title means that are minimal liens on the property. Previous mortgages are perfectly fine, as well as EIDL loans. In addition, there should be no clouds on title, that is nothing should bar a clear chain of ownership. Sellers who wish to close quickly will often ask their attorneys or title company to run a preliminary title report, which can show if there are any issues that need attention. Refinances typically have fewer title issues.

•  Is there a recent survey?  A recent survey will show the borders of the real estate, the building square footage, the elevation and the flood zone. Many title companies and lenders require a recent survey. Unfortunately, in many locales, there is a shortage of surveyors. Therefore, obtaining a survey is a high priority at the beginning of the loan process.

•  Is the business profitable? GRP Capital has definitely closed multiple loans on businesses that are underperforming. In these situations, the buyers are planning to make changes in the facility or the operation of the business in order to turn it around. However, in order to close a loan quickly, a currently cash flowing business is optimal.

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 for purchase, refinance and construction loans. Our experience allows our clients to find funding that is project-appropriate and will allow for sufficient cash flow. If you are considering becoming a first-time (or second or third time!) buyer, we can assist you.

Checklist with hand

Business Recovery After the Hurricane: A Checklist

Let’s talk about business recovery after a major weather even.

We still have six weeks to go in the hurricane season! But many of our clients have already experienced physical damage as well as interruption to their businesses including loss of revenue.

What are the Most Important Tasks for Business Recovery?

Communicate with Your Lender!

  • Believe it or not, if you have commercial real estate, contact your lender right away.
  • Let the lender know about any damages and how you think this might affect your business. Be honest about what the challenges could be in terms of both revenue and expenses.
  • Your lender may reduce or delay your regular mortgage payments for a short time.
  • If GRP Capital helped you find a loan, we are happy to work directly with the lender on your behalf, so you can attend to your business recovery needs.

Determine Physical Damage and Engage Insurance

  • First, determine all of the physical items that need to be repaired. It’s critical to obtain multiple quotations.
  • 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.
  • On the advice of an attorney, you may want to hire your own “public adjuster”. A public adjuster works for you and not the insurance company.
  • 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 you were already considering renovations, consider combining hurricane repair with renovations. Click here for more information on this business plan.

Loss of Income or Business Interruption

  • In addition to physical damage, how is your business functioning?
  • Have you suffered business interruption because your business had to close due to damage or power failures?
  • Were you unable to operate at capacity because your employees were unavailable?
  • Make a list of all of the ways your business had economic injury. If you have business interruption insurance, you can provide this list to your agent.

Apply for SBA Disaster Loans

  • The Small Business Administration sets aside money in cases of major weather events.
  • In order to apply for help following Hurricane Milton, click here. For Hurricane Helene, click here.
  • You can receive low interest loans to cover uninsured losses, whether they are physical damage or economic injury.
  • GRP Capital can assist with applying for SBA help. Please contact our team to start the process.
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.
Hurricane Texas picture

Combining Storm Damage Repairs and Renovation

Are you looking at storm damage repair from Hurricane Beryl?

Hurricane Beryl is now in the history books. This storm kicked off the traditional hurricane season and caused significant damage over a large swath of the country. Now, business owners are facing water damage as well as long-term power outages. 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 or renovating your property at the same time as the repairs. You could undertake more extensive renovations, even take on deferred maintenance. Especially if you have had any previous mold that needs to be remediated, using insurance proceeds to clean up water intrusion may allow you to fix both problems.

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 Storm Damage 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.

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.

Hospitality Loan Options

What is happening in the world of hospitality loan options? Which road should you take?

Are you looking to purchase an existing hotel? 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?

Lenders have become more selective about hotel loans. In addition, borrowers have to contend with current high interest rates.

What are the best ways forward?

Different Loan Products to consider:

  • Conventional Loans: There are a few lenders who offer conventional loans, often at fixed prices. However, these loans are typically reserved for the highest echelon of hotels and for larger loan amounts. They also tend to require greater equity injections.
  • USDA Rural Hotel Loans: If your property is not in the heart of an urban area, you may be eligible for a USDA loan, designed to support businesses outside of cities. These loans often have variable interest rates but are adjusted infrequently (some as few as every five years).
  • SBA (Small Business Administration): SBA loans are in many cases the most affordable loan products for hospitality owners with properties of all types, from economy to luxury. Their variable rates mean that when interest rates do eventually go down, borrowers will benefit. In addition, GRP Capital has relationships with many preferred lenders, which decreases the time to close.
  • 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. Bridge lending offers a quick, temporary solution, but sometimes with a high short-term interest rate.

Special Considerations for Purchasing a New Hospitality Business:

• Does a New Purchase Fit into Your business plan? There are hospitality businesses that are for sale now. It could be that the seller is ready for a new project. Or it could be that the seller’s note is coming due and they, too, are weighing their own options. Talk to us about the range of interest rates that you could be paying for a new loan. Then determine if this is affordable. We highly recommend doing this before signing a PSA (Purchase Sale Agreement) or paying any earnest money.

• Determine the True Expenses of a New Business: New businesses have many expenses. We always critically review the seller’s financial statements with our clients. It’s important to understand which fixed costs buyers will be taking on and which costs were ones that will not recur. Of particular interest are the insurance costs, the labor costs, the franchise agreement (which we can give guidance on) and of course the actual cost of the loan.

If you would like to discuss hospitality 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.

Debt Coverage: How DSCR has Eclipsed LTV

Have you been hearing terms like debt coverage and DSCR more than ever before?

Did you already know about loan to value or LTV and are now wondering about this new alphabet soup?

Well, here is what is going on!

DSCR stands for Debt Service Coverage Ratio. It’s actually a very simple fraction. Your DSCR is your net operating income (NOI) divided by your annual debt payment. So, if your business netted $500,000 annually and you pay $400,000 yearly in mortgages and other long-term debt, your DSCR would be 1.25.

What to know about your Debt Coverage:

• What’s a good DSCR? “Good” DSCR figures can vary by industry and even location. In general, lenders are looking for a DSCR of at least 1.15. However, sometimes there are extenuating circumstances, like ongoing long-term renovation, buyouts of partners and other issues.

• Hey, I have a great LTV! We talk with our lending partners every day. Three or four years ago, the most important number in securing financing for our clients was the LTV or loan to value. This figure is a ratio that expresses the value of your property and business divided by the amount of the financing you are requesting. However, lenders are telling us now that they are not as concerned with LTV and are much more carefully eyeing DSCR!

• Why is DSCR as important or more important than LTV now?  Within the last several years, commercial real estate had been rising rapidly in all sectors from office space to hospitality to everything in between. But the changing economic climate has thrown disorder into many sectors. Lenders and appraisers have become much more conservative and are not assuming high valuations like they used to. Instead, they are looking at what is tangible and real: how much a business earns and how much it costs to pay for debt.

What happens if my DSCR is too low?  Sometimes a property’s debt service coverage ratio is below the lender’s minimum. At the same time, the client wants a loan at the upper limit of the LTV. When this happens, the lender will have to reduce the loan amount in order to maintain the minimum DSCR. This is referred to as the loan amount being debt service constrained.

• Business and Personal Cash Flow: Lenders of course evaluate your business DSCR. But they also evaluate your global cash flow. They add up the income from all of your businesses and determine your expenses, including debt payments, both business and personal.

Don’t Forget Your EIDL!

• EIDL is Debt:  If you had an EIDL (Economic Injury Disaster Loan), this shows up as debt on your balance sheet and is included in your DSCR calculations. Fortunately, the low rates on EIDL’s make the payments for them relatively affordable, but they do add to your indebtedness and affect the DSCR ratio.

• What happens to my previous EIDL’s if I’m selling, buying or refinancing? This varies depending on your debt coverage and your circumstances. To learn more about these issues, see this blog about EIDL‘s and new loan transactions.

If you are considering a loan for purchase or refinance or construction and would like to discuss your plans, feel free to contact our team.  We can conduct a business evaluation and even prequalify you for a loan at no cost to you. We will help you determine your DSCR and LTV and match you to appropriate lenders for your projects.