Category Archives: Hospitality

Accelerated Closing in Wisconsin

Sometimes the most important element of a loan is an accelerated closing. This was the case with our Wisconsin client. They had big plans for this property, including reflagging it. But they had an existing note that was maturing quickly. This created a very fast timeframe. They needed to refinance quickly.

We at GRP Capital know the strengths and challenges of our lending partners. Our team reaches out to certain lenders for conventional financing, others for SBA financing and still others for bridge loans. As a result, we have enough experience to be able to say with confidence which lenders will offer the most competitive rates or even the most beneficial loan structures. In this case, we recommended a lending partner to our clients, chiefly because we know they could close a loan quickly under pressure.

GRP Capital Senior Business Associate Ryan Dumas stated, “This group of partners had a very strong business plan. They were reflagging this hotel and renovating in order to do this. These changes are going to enhance the profitability of the property. They just needed a really fast closing and some working capital to pay for their PIP. I was very pleased that we could help them out. I know they will be successful with the changes at theirhotel.” 

Why Would You Need a Fast Closing? 

•  Maturing Note: ration of previous mortgages creates some hard deadlines. Be aware of when all of your business loans come due, so you can make decisions without rushing.

• Seller time frame: Particularly with underperforming properties, the seller may want to close quickly to avoid upcoming bills including mortgage and property tax payments. It may or may not be possible to accommodate the seller. We encourage extensions to Property Sales Agreements when the seller demands are not feasible.

•  Need for Immediate Management Change: Management matters. When new owners bring new ideas and new management skills, they can often turn a property around or make it more profitable. A fast closing allows for the management to take over and begin refining and correcting operations.

•  Locking in an Interest Rate: Interest rates fluctuate. Clients are wise to try to settle and close with a payment that they can best afford.

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. We can match our clients with a lender for purchases, refinances, construction and other business expansions. If you are considering becoming a first-time (or second or third time!) buyer, we can assist you.

Shifting from Leasing to Ownership

Our Florida client contacted us, ready to shift from leasing to ownership of his hotel. He currently was leasing the land, but had built up enough management experience and capital to own his hotel outright.

GRP Capital Managing Director Krishan Patel was ready to find him an appropriate lender. Patel stated, “Our client was an ideal candidate for financing his transition to being a full owner of the property. He demonstrated strong management skills at the current property.  In addition, he had sufficient capital  for his equity injection. He was organized about every aspect of ownership and management. This included being hands-on with his financials and hotel statistics, as well as understanding the hotel business and his local market conditions. We were pleased to find him stable, permanent financing.”

Moving from Leasing to Ownership? 

• Demonstrate strong management: Make sure you have accurate financials. Organize all of your paperwork about your operating company. Create a new company as the borrowing entity if you need to. Finally, prepare a budget for the current year and a proposed future budget.

•  Know your property:  What are the strengths and challenges of your property? What are your future plans if you take on ownership that you couldn’t do previously? How is your property positioned in your local and regional marketplace?

•  Evaluate your current debt:  Will you be able to make new, larger loan payments? Do you have a recent SBA loan, like an Economic Injury Disaster Loan (EIDL) or a Paycheck Protection Program (PPP) loan? If so, the lender may request you to pay down, pay off or subordinate your  loans. Lenders may also require you to apply for and receive forgiveness for PPP loans.

•  Why do You Want to Own? Many business owners like the prestige of ownership as opposed to renting. This is understandable, but it may not be a good enough reason. Ownership requires being able to make major repairs. Is the property currently well-maintained or will you be obligated to take on a lot of deferred maintenance 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 help. Or if you want to investigate refinancing, we can assist you.

Independent Hotel in North Carolina Refinanced

GRP Capital was proud to close the refinance of an independent hotel in North Carolina.

GRP Capital President Rick Patel and our entire team worked with this small business owner to secure a conventional loan at competitive rates. This loan allowed our client to have improved cash flow with stable financing. 

Our team worked closely with the client, his family members who helped with accounting and even his previous lender to obtain all of the documents needed to close the loan. Rick Patel remarked, “This client is our bread and butter: a small businessman who is running an independent hotel. We worked hard to demonstrate the revenue potential of the hotel. In addition, we guided the client and his accountant on coding and categorization, so that his financial reporting more closely matched standard hospitality accounting reports. I really believe in supporting the client as a business person and not just as a borrower. We want our clients to be stronger entrepreneurs at the end of a closing, and not just the recipient of a new loan.”

Unique Challenges of Independent Hotels:

• Marketing the Property. Independent hotel operators have tremendous freedom in marketing their property. However, they also bear all of the costs for creation and implementation of marketing plans.

• Comparing Yourself to other competitors in the marketplace:  Most independent hotels do not participate in STR reporting. As a result, it can can be difficult to ascertain how w well their property is doing. Instead, independent hoteliers have to constantly monitor their pricing and compare it to their competitors.

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.

First Time Hotel Owner buys Georgia Property

GRP Capital announces a brand new loan for a first time hotel owner. Our Georgia client is a first time buyer and now owns a 75 unit franchised hotel.

Senior Associate Ryan Dumas worked closely with our client in order to close this loan. Ryan stated, “I love to meet up-and-coming entrepreneurs. Our client just needed a little bit of encouragement to overcome the challenges of closing on a new business loan. We helped him choose the best loan for his needs. We were even able to accommodate him and his wife, so she could sign documents early in order to deal with a family emergency.” 

Our client was so pleased to close his loan, he told us, “Thank you so much for all the hard work…we sure had some hiccups but nothing major. Hope to work with you guys again pretty soon on an even bigger project…y’all about to get lot of referrals.”

Are You Ready to be a First Time Hotel Owner? 

• Assess if You Can Afford It: Have you built up capital to purchase the business, have some working capital and take on the operations?

• Is the hotel a good fit for you? Are you ready to be onsite frequently in the near term after change of ownership? Do you know the market fairly well? What do you know about the challenges of this hotel and its strengths?

• What is the revenue potential of the hotel? Is the hotel currently running well and bringing in sufficient revenue? If the hotel needs operational changes, do you have feasible plans to turn the hotel around and enough reserves?

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.

Louisiana Hotel Loan Closes

Our client needed a Louisiana hotel loan. He already owned a nearby property and knew the area well. He had been watching this particular hotel, as he perceived that it was underperforming in the market.

GRP Capital was ready to help.

But, because it’s Louisiana, sometimes Mother Nature has her own ideas. In this case, we were processing the loan during traditional hurricane season. Of course, a hurricane swept through the town, but did not damage the subject property. However, it did delay the appraiser being able to get out to the site.

Our client was solid as a rock, however. He understood that you have to be organized and calm during the storms in order to accomplish your goals.

GRP Capital Managing Director Krishan Patel commented, “We were so pleased with our client. He was organized and cheerful. He kept his eye on the prize, getting us documents quickly, discussing loan strategy with us and making necessary changes. It’s hard to be a business owner in the Bayou, but we were excited to close this Louisiana hotel loan.”  

How to Get Organized for a Future Loan: 

• Gather your tax documents: Make sure you have three years of business and personal taxes, including your W-2’s. Get them electronically from your accountant, to make them easy to submit.

•  Meet with your accountant: Tell your accountant that you will be applying for a loan. You will need updated financials and you may need to understand the details of your taxes. Be sure that the taxes you have match the official ones that were submitted. Apply for an extension if it’s time.

•  Tell Us Your Goals:  GRP Capital want to understand why you need financing. What are your business goals? What will you be using the money for? Why do you think this is the right time to make this decision?

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.

Strong Management Results in New Refinance

GRP Capital is pleased to close another hotel refinance loan.

Our Southern California clients faced serious challenges during the beginning of the COVID-19 pandemic. Their hotel is located very close to Coachella. As a result, the cancellation of the famous festival in the early days of the pandemic could have been devastating. But our clients worked hard and kept their operating costs down. They continued to market their hotel carefully and when travel restrictions eased, were back in business.

Smart management eventually paid off. They also took advantage of the Small Business Administration stimulus package. Specifically, they obtained a modest EIDL (Economic Injury Disaster Loan) and two small rounds of Paycheck Protection Program loans. They used the proceeds from the loans appropriately, keeping their debt manageable. Their sound practices demonstrated that they were appropriate for a new refinance.

New refinance requirements when you have SBA COVID-19 loans:

• Subordinate the EIDL: At times, a lender will request a subordination. This means that the client gives permission to pay their new loan first and the EIDL  loan moves into second position. GRP Capital works with lenders who understand how to subordinate the loans, making the process seamless for our clients.

•  Apply for forgiveness of PPP loans: If PPP loans have been used appropriately (for payroll, mortgage and other pre-approved costs), borrowers can have the loan amounts forgiven. This process originates with the lender.

After working together as a team with Business Associate Vijal Suthar,  our clients now have a reasonable mortgage payment that makes their cash flow even stronger. They are renting rooms and eagerly awaiting the return of Coachella. Vijal Suthar said that “closing this refinance was a signal that lenders want to loan money. In particular, lenders prefer strong borrowers who show savvy business sense and strong management skills. These clients did the right things to keep their hotel afloat. I was very pleased that their reward was a very competitive and affordable loan.”

Are You Ready for a New Purchase or Refinance Loan?

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? 

GRP Client Closes on Florida Comfort Suites

Comfort Suites, an upper midscale chain, offer opportunities and challenges for potential buyers. Lenders can be cautious with all hospitality loans; upper midscale chains require particularly careful underwriting. Our network of lenders wants to ensure that the properties have made it through the toughest parts of the pandemic. In addition, new businesses should have a positive cash flow and potential for steady or even increased revenue.

The entire GRP Capital team worked together to close this Florida Comfort Suites. Our clients were ready to take on this upper midscale chain. So we worked with the clients to prove that this property was worth the asking price, as well as shoring up the appraised value. As a result, the lenders approved the loan. GRP Capital President Rick Patel stated, “This loan was complex and required a lot of attention and focus on the part of our clients and our team. I was very pleased that the loan closed in time for our clients to take advantage of the latest stimulus package.  I feel confident that the new owners will be able to activate their management plans in order to make their new property profitable with strong cash flow.”

Purchasing A Comfort Suites or Other Upper Midscale Properties: 

• Consider Carefully How Much to Offer:  Buyers need to be able to prove that the property is priced right. We encourage our clients to talk with us prior to making an offer. In this way, we can offer guidance and be sure that the offer is fair for everybody

• Shore Up the Appraised Value: Many times, buyers are interested in purchasing properties that are performing below the market, as these are often priced more affordably. However, lenders require assurance that properties will be profitable. Prepared clients should create strong business plans, including pro formas which address why the property isn’t reaching its profit potential.

•  Demonstrate Your Borrowing Strength: Potential borrowers should have three months of funds for equity injection. These monies should be from accounts that are easy to trace, without large movements of money moving into them and free of borrowed funds and large gifts.

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.

First Time Buyer Purchases Hotel

GRP Capital is pleased to announce the loan closing for our client, a first time buyer.  GRP Capital Managing Director Krishan Patel as well as GRP Capital President Rick Patel worked closely with our client and our lender to help everybody through this new terrain.  

Challenges for a First Time Buyer: 

• Finding the right property to purchase: First time buyers need to be picky. They should choose a property with profit potential. Even more importantly, a first time buyer needs to select a property that they can manage. Being too ambitious in terms of size of property, any issues facing the business or even complexity of management are not “perfect first time properties”.

•  Proving themselves to the lender:  Lenders want first-time buyers tho prove two things: financial stability and management experience. We worked in tandem with our lender and our clients, so that our clients could demonstrate their solid business plans. Our clients had experience but not decades of it. Our lender needed encouragement. Therefore, our relationship with the lender allowed them to trust us and our evaluation of the client’s skill set.

•  Solid Management Practices:  Lenders regularly request a management resume from potential borrowers. They are looking for years of experience and what type of businesses our clients have managed. We help our clients craft these resumes, so they can highlight their strengths during the underwriting process.

Rick Patel upon closing this loan stated, “We really wanted to help our client pursue their ownership dreams. They have good, strong management experience and will be able to improve the profit margins of this hotel. They are already executing their management plans as we approach the Florida high season.” 

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.

Independent Hotel Refinance

Our clients, owners of an independent hotel in western Florida, closed their loan. They previously had a private loan, and were looking for more traditional financing.  GRP Capital President Rick Patel worked closely with our clients, who are very organized, hands-on small business owners. 

Independent Hotel Ownership: 

• Proving revenue and expenses: Independent hotel owners typically do not participate in the Smith Travel Research (STR) reporting. As a result, this third party report is not available to lenders and underwriters. Instead, we at GRP Capital provided other documents that demonstrate the health of the business. These can include financials (which can even be certified if necessary) as well as sales tax reports and business bank statements.

•  Strong Management Skills:  Our clients are very hands-on. They know their budget and their expenses and can rattle off figures without even going back to the books. That is invaluable during the appraisal and underwriting process, when we are painting a picture of how the hotel functions.

•  Solid Marketing Plans:  Independent hotel owners have the benefits of being their own bosses without the parameters that franchises set. However, they also do not have the marketing budget that franchises have. It’s important to demonstrate how independent hoteliers are retaining and improving market share. Solid marketing plans are written out, with goals and timelines.

Rick Patel upon closing this loan stated, “I really enjoyed working with these clients. I love seeing a hard-working couple who are really just in need of a little help to kick-start their business to the next level. They benefited from our connections with our lender network and were able to transition to permanent  financing.” 

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.

Texas hotel loan closes

Our GRP Capital client is the proud owner of an East Texas hotel. Our clients purchased the hotel with extra assistance from the team to take this loan across the finish line.

GRP Capital’s  Senior Associate Ryan Dumas and our entire team worked closely with the very capable clients. Our clients, experienced managers and owners, only needed a little bit of direction in order to undergo the vigorous SBA underwriting process. We helped with restructuring the borrowing entity, including designating appropriate personal and corporate guarantors. As a result, our clients could more easily source their equity injection in a way that pleased the bank and met with SBA approval.  

Upon closing the loan, Ryan Dumas stated, “I really respect these clients a great deal. They are experts in the Texas hotel business and reached out to us as experts in financing. We worked very diligently with them to set up the loan so that everybody was happy: the clients, the bank and the SBA.”

If you are thinking of obtaining a new loan, now is the time to get your paperwork together, so you can streamline the process from origination to closing.

Get Organized While You Look for a Loan:

• Make sure your taxes are up to date.  File your taxes or file your extensions. Lenders will require three years of tax returns, both personal and business. This includes affiliate businesses that you own 20% or more of (or which you manage).

• Monthly Financials are a Must: Even if your CPA typically only provides quarterly financials, during the loan underwriting process you will need to provide monthly financials. And be prepared: your financials will be updated at least once during underwriting. Be sure your CPA understands what will be required. We are happy to conference call with any of your business professionals to explain the process and what will be needed.

• Show Us Your Plans. What are your dreams for your business that this loan will allow you to embark on? What is the current budget and your future budget? How do you plan to market in the future? If you are buying a new business, what will you do that will improve upon the previous ownership?

• Be Careful with Your Money.  Lenders will need to see nice clean bank statements, both business and personal. So don’t spend large amounts of money or take in large amounts of money. Don’t take on new debt (new cars or houses, new credit cards) and please don’t check your credit. If you get into a situation (you’ve been in a car accident and don’t have a choice about buying a car), talk with us first about strategies to deal with the emergencies during the loan underwriting 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. 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.