Category Archives: Hospitality

Partnership Loan: Complex but Closed!

A partnership loan is very common. A partnership loan allows its members to pool their resources and talents to divide up the costs and responsibilities of a new business endeavor. GRP Capital is pleased to announce that Managing Director  Krishan Patel has just closed a loan on a large partnership for a new property in New Mexico.

While a partnership loan may be common, it can make a closing more complicated.

Typical complications in partnership commercial real estate transactions:

• Who will be officially managing the business? For this deal, two of the six partners agreed to be the managers. Their operation agreement clearly stated this setup. At signing, only the managers had to sign the full loan documents, while the other partners just had to sign guaranty paperwork. We even arranged for out of state signings.

•  How will equity injection be handled? For this loan, the partners were extremely organized about getting bank statements that were clean (free of large hard-to-trace deposits in the last three months) and using those to contribute their equity. It is very important for partners to be transparent with each other about their sources of equity. They need to be sure that their equity contributions  will be be acceptable to the lender.

How We Knew this was a Good Partnership:

Patel remarked, “I was very pleased to get to know this group of motivated, bright entrepreneurs. To be sure, they had carefully thought through many aspects of their purchase. Consequently, they contacted us to take this loan from letter of intent to closing as smoothly as possible. In order to meet their needs, we communicated with them regularly and they appreciated the transparency of the loan operations. They were model clients: organized and responsive.” 

GRP Capital secured a fully amortized, 25-year permanent loan with historically low interest rates.  The partners took possession of the property and are ready to make this business even more profitable in the future. In addition, the partners are able to benefit from a lowered mortgage payment for the first few months as part of the latest stimulus package. 

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. If you are considering becoming a first-time (or second or third time!) buyer, we can assist you.

Challenging Loans? No Problem!

We’re not afraid of challenging loans!

When the owner of an Alabama hotel contacted Senior Associate Ryan Dumas, he needed solutions. Previously, the seller had found a buyer and they had found a lender, too. Unfortunately, the lender they chose was not able to take the loan to closing. The buyer and seller were motivated and had a good relationship with one another. As a result, their shared goal was very simple. They wanted to close the loan and not to waste any more time trying to source a motivated, efficient lender.

Ryan, who has extensive experience with challenging loans, worked with the seller and the buyer. He learned about the property and made the case that it deserved funding. Our GRP team quickly obtained a letter of intent from a regional lender. We knew it was important to select a lender who believes in hospitality lending,  even under the current economic uncertainties. We closed the loan, which resulted in a new property for our buyer and a closed sale for our seller. Both the seller and the buyer are happy with Ryan and our GRP team and were pleased to finally move in or move on!

This loan took advantage of low interest rates as well as the new SBA program which waives the guaranty fee as well as providing for some mortgage relief.

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. If you are considering becoming a first-time (or second or third time!) buyer, we can assist you.

Getting Ready to Borrow? Do These Now!

Are you getting ready to borrow money? With continuing low interest rates, now is an ideal time to start or grow an existing business.

We at GRP Capital guide our clients from the germ of a business idea to receipt of funds.

Many clients come to us with good business plans and even sufficient equity and/or debt coverage. But many clients neglect what we call due diligence. Due diligence is really understanding and researching the elements necessary to close the loan. Due diligence also means engaging professionals who will advise and serve your interests.

How You Can Be Ready To Borrow:

• Hire your own attorney:  An attorney, hired by you, can examine your purchase agreements, loan documents, and the title commitment letter and policies. A qualified attorney will protect you and your business interests and can even negotiate on your behalf. Borrowers are not always required to hire an attorney; however, we do not advise trying to save money by NOT hiring an attorney.

• Ask about previous environmental reports:  Typically, when a bank loans money, they will arrange for various site visits and reports. If you are looking at buying a business or if you are refinancing, the lender will require previous environmental reports and will also engage an appraisal. If the property never had an environmental report (maybe the private lender didn’t require it), you need to be sure that nothing adverse will be revealed. Always ask owners to see their ESA (environmental site assessments). This will ensure that you know about any issues with the property. Of particular concern are nearby gas stations and automobile repair shops.

• Look into title work and previous surveys: Not every property has a recent survey on file. Nowadays, most lenders are requiring updated surveys. Engaging a surveyor and obtaining the survey can take 4 weeks. Shortening the time frame comes with a surcharge. So if you are refinancing and don’t have a survey on hand, you will probably need to engage one. If you’re purchasing a business which includes real estate, as soon as you receive a letter of intent from the lender, you should consider engaging a survey, if necessary.

• Meet with your accountant and get your documents in order: Let your accountant know that you are in the market for a loan. He or she will need to make sure you have up-to-date financials, which include Profit & Loss statements and Balance Sheets. Your accountant should have filed your tax returns or extensions. In addition, you will have to identify all of the components of your business debt.

Be Ready for Site Visits:

• Put Your Best Foot Forward: If bank personnel or appraisers are coming to look at your business, understand your business plan and be able to explain how you will be profitable. GRP provides coaching to clients to help them understand the most important messages to relay to site visitors.

• Clean House: If you are looking to refinance an existing business, the property should be in decent shape with minimal deferred maintenance, if possible. If you are planning to renovate with the proceeds of the loan, you should be able to detail what will be improved and how much it will cost.

• Have a Plan for Obvious Problems: If the property is in need of obvious repairs (water damage, parking lot issues, etc.), be honest about those, be sure that you can explain the timeline and the financing of these planned improvements.

Be Ready to Borrow!

•  Clients who haven’t done their due diligence can experience frustration during the loan process. Not having a survey, an ESA or your own attorney can delay or even derail a loan closing.

• We will help guide you in the loan process. But we hope these ideas will help you before you even call us. When you have done your due diligence, you really are ready to borrow!

One of our chief responsibilities is advocating for borrowers. Even in the recent economic uncertain times, we have continued to advocate for our clients, and successfully closed loans.

Our Great Opportunities series discusses various aspects of the changing economic climate. There are still opportunities to secure funding for specific business plans. Read more about other aspects of finding funding in today’s climate here:

Becoming a Better Borrower

What Businesses do Lenders Like Now?

Fast Closing for Hotel Purchase in Colorado

GRP Capital is pleased to announce that Managing Director  Krishan Patel executed a fast closing on a hotel purchase loan for our Colorado client.  

GRP Capital secured a fully amortized, 25-year permanent loan with historically low interest rates. Because the previous note on this property was a Small Business Administration (SBA) 504 loan, time was of the essence. SBA 504 notes can only be paid off on one day per month (typically the third Thursday). We knew a fast closure was critical and were able to close 21 days from LOI to funding. A fast closing also ensured that the this loan was eligible for SBA’s 6-month subsidy. As a result, our clients have no payments for the first six months of the loan. 

Patel remarked, “We know these clients very well, as we recently closed another loan for them. When we realized we would only have 21 days to close this loan, we knew we had to work as partners. We used as many of the previous documents we had gathered from our previous work with the client. For their part, our clients were incredibly organized and responsive, turning in documents and information quickly. As a result, the lender was also responsive and quick-moving. We were thrilled that we could accomplish this fast closing, saving our clients six months of loan payments.” 

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. If you are considering becoming a first-time (or second or third time!) buyer, we can assist you.

Speedy Closing for Hotel Purchase In Kentucky

Another speedy closing is in the books. GRP Capital Senior Associate Ryan Dumas was able to close this loan rapidly and efficiently with the help of our team. Our client, who was actually the seller of this property, wanted a smooth and quick closing, Ultimately, he wanted to transfer ownership of the property in preparation for new business ventures. 

GRP Capital secured a fully amortized, 25-year permanent loan. The buyers were able to take advantage of continued low interest rates.  In addition, the quick closing also ensured that the this loan was eligible for SBA’s 6-month subsidy. As a result, the buyers have no payments for the first six months of the loan. 

Our client told us after the closing, “Your teamwork is amazing and guided us step by step. I have never seen an SBA loan close this fast.” Ryan Dumas was proud of GRP’s ability to execute this speedy closing efficiently and smoothly. In order to accomplish this, the GRP team worked in partnership with the buyer, the seller, the lender and many third party vendors. As a result, the client and Ryan are already discussing future business projects. 

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. If you are considering becoming a first-time (or second or third time!) buyer, we can assist you.

Smooth Path to Closing in Oklahoma

How do you get a smooth path to closing? Take a motivated seller, an organized buyer, an enthusiastic senior associate and add in our loan processor. What’s the result? Another quick closing is in the books.

GRP Capital Senior Associate Ryan Dumas was able to shepherd this hotel loan from letter of intent (LOI) to closing in just 41 days. Everybody involved in the sale did their part to make sure we had a smooth path to closing.

Submitting Needed Documents:

• The seller provided the documents necessary (typically financials and hotel statistics and any applicable leases).

• The buyer had to prove that he or she has an appropriate debt coverage. Our clients have to demonstrate the ability to contribute to the equity. They also have to be able to pay for business expenses that arise. In addition, the lender wants to know the the buyer has the appropriate management experience to supervise the operation of the new business.

• The lender also needs the appropriate documents about the business formation and licenses.

Submitting documents quickly allows the lender to underwrite the file quickly. Once the underwriter is satisfied with the documents, they don’t need to  come back for more supporting documents and more updates. This keeps the document requests manageable for everybody.

What are Equity Verification Documents?

• Bank statements

• Stock and bond fund statements and/or money market accounts 

• Closing documents/settlement statements  from previously sold property

GRP Capital secured a fully amortized, 25-year permanent loan. As a result, our client was able to take advantage of continued low interest rates. 

Our client was thrilled with the smooth closing. He has solid plans to increase profitability and is ready to follow his plan.

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. If you are considering becoming a first-time (or second or third time!) buyer, we can assist you.

Low Interest Loan for LA Hotel

GRP Capital is proud to announce another loan closing, taking advantage of historically low interest rates.  Senior Associate Ryan Dumas and his team worked with the borrower and the lender to refinance this independent hotel. The borrower was able to refinance a higher interest existing loan. In addition, our client obtained funding in order to embark on some needed renovation. 

Our client previously had a higher interest private loan that she was ready to refinance. Her new 25 year permanent loan product provided manageable, stable financing with sustainable payments for the life of the loan. Refinancing allowed our client to decrease her monthly mortgage payments. Even better, our client immediately utilized the project improvement plan (PIP) monies to complete deferred maintenance and updated furnishings.  

Independent hotels can still receive financing in these uncertain teams, even in California. Our job at GRP Capital is to advocate for our clients. We work to demonstrate the strong management skills of the property owner (or management team). In addition, we partner with our clients to organize their files in order to emphasize the true profit potential of their business. We understand that each property is unique and we pride ourselves in getting to know our clients, their enterprises, and their distinct financing needs. Finding the right loan product and the appropriate lender requires research on our part. That research entails learning about our clients as entrepreneurs. As a result, we secure options for them that will best serve their business needs for growth, stability or even liquidity.

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. If you are considering becoming a first-time (or second or third time!) buyer, we can assist you.

Hotel Refinance in Alabama

Another successful refinance! GRP Capital’s  Senior Associate Ryan Dumas and its processing team were able to close another SBA loan for our clients. We accomplished this by matching our client with a hospitality lender in our network. This allowed our client to move into a stabilized, permanent loan product and offer payment relief for the months ahead.    

Our processing team worked closely with Ryan and our clients. We managed document flow, helped interface with the lender and coordinated with counsel and insurance agents. Ryan Dumas stated, “I really wanted to help these clients. They are experienced business owners and their property is extremely successful, even through the country’s rolling shutdowns. They just needed for GRP Capital to help them secure hospitality financing in an industry where banks can be hesitant to lend. I was glad to see their refinance loan close, so they can become even more profitable in the future.”

Lending During This Economic Climate:

GRP Capital secured a fully amortized, 25-year permanent SBA 7a loan. The buyers were able to take advantage of continued low interest rates. Despite the instability surrounding hospitality assets, a hotel can be refinanced under the right conditions. We are regularly in contact with our lender partners to determine who is enthusiastic about lending in the hospitality industry. A refinance might be exactly what you need to secure stability and improve cash flow.

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. If you are considering becoming a first-time (or second or third time!) buyer, we can assist you.

Want to know more about other business opportunities? 

Bed & Breakfast in North Florida: Another Loan Closed

GRP Capital is pleased to announce the successful closing of a Bed & Breakfast in north Florida. Our client worked diligently with Business Associate Vijal Suthar and our entire team to close and fund this loan. Our client knows this local Florida market well and felt ready to take on this new business venture. The loan provided affordable, stable financing. As a result, our client was also able to take advantage of new components of the latest Small Business Administration stimulus package. Currently, SBA loans allow several months of no payments (or reduced payments for larger mortgages) as well as waived SBA guaranty fees.

Every loan we shepherd towards closing is unique and this property was special. Our client saw the business potential of a small bed and breakfast in the heart of a bustling area. She was ready to expand her business portfolio and bring her growing management skills to this new project. In order to help her, we found a lender who was supportive of the concept of boutique inns, lodges and bed & breakfasts. Importantly, each of these properties offer their guests smaller, more intimate hospitality experiences. In addition, a boutique inn can be very nimble under changing economic circumstances.

Vijal Suthar adds her thoughts on this loan, stating, “Certain sectors of the hospitality industry continue to be profitable. Boutique Inns and Lodges are one of these sectors. It can be a bumpy road to take a loan from origination to closing. Therefore, I was particularly pleased that the client put her trust in us to close this deal on her behalf. I feel honored to have helped her realize her dreams. Ultimately, to see her appreciation and excitement on taking ownership of her new property makes all our efforts worthwhile.”

Closing a Loan in the Current Economy:

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. If you are considering becoming a first-time (or second or third time!) buyer, we can assist you.

Want to know more about other business opportunities? 

Hotel Refinance in Michigan Closes

GRP Capital is pleased to close another hotel refinance loan. Our clients in metro Detroit had solid cash flow, but needed to move into a more affordable commercial loan. The borrowers partnered with Business Associate Vijal Suthar and our entire team to close and fund this loan.

Sometimes our clients hit roadblocks. In this instance, our clients needed to have a more extensive environmental assessment as as result of a nearby gas station. Our clients’ prior lender had neglected to investigate the environmental aspect of their site. This sometimes occurs in private loans. However, to move into more stable, lower cost loans, we had to help our clients remedy this situation.  We were assertive and our clients were patient and we made it to closing!

This hotel refinance allows our clients to take advantage of new components of the latest Small Business Administration stimulus package. A hotel refinance is particularly attractive in this economic climate. Refinancing your higher interest loan or a loan that has an upcoming balloon payment leads to  improved cash flow and stable payments for you.

Vijal Suthar was pleased to close this loan. She noted, “Sometimes we discover that a previous lender hasn’t conducted due diligence. In this loan, we encountered some hiccups, but we were able to take corrective steps in overcoming these issues to get the loan to closing.”

Closing a Loan in the Current Economy:

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. If you are considering becoming a first-time (or second or third time!) buyer, we can assist you.

Want to know more about other business opportunities?