Category Archives: Small Business

Fast closing to meet a 1031 Exchange Deadline

GRP Capital was happy to help our Florida client purchase a new hotel, using his proceeds from a previous sale. But even more importantly, our client had an imminent 1031 exchange deadline, so he had to use the proceeds quickly. A 1031 exchange, also known as a like-kind exchange, is a real estate investing tool. It allows investors to swap out one investment property for another, deferring certain capital gains taxes.

GRP Capital President Rick Patel and our entire team worked closely with our client, under the added pressure of the 1031 exchange deadline.  

The biggest hurdles were shepherding the loan through the underwriting process, quickly obtaining a survey and working with the franchise team. It was hard work! Rick Patel remarked, “We utilized a third party consulting team to work with the franchise. We had to do this to overcome the mandatory 14 day cooling off period to meet the borrower’s 1031 exchange deadline. In-house, we worked diligently to submit all the required documents quickly and correctly. Timing was absolutely critical for this loan. It was an all hands on deck effort, which we were happy to do for this client.”

What to do if you have a 1031 Exchange Deadline:

• Know your deadline. Many business owners have their eye on purchasing a new property. Sometimes, they plan to sell another asset for their equity injection. That is a great plan. However, make sure the loan is feasible, and that a lender can close the loan to meet your deadline.

• Get all of your own financial documents ready:  Lenders will require taxes to be filed (or extensions), as well as financials that are less than 90 days old. Work with your accountant and other professionals, If you know you will be applying for a loan with a tight deadline. Make sure you have your docs in a row.

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

Our team specializes in finding the right lender for each project. We save our clients time and provide options, as we research different funding sources. Our experience allows our clients to choose the best loan for them. If you are considering a purchase or a refinance, let us know how our GRP Capital team can be of service.

GRP Closes Liquor Store Loan in Arizona

GRP Capital is pleased to announce the successful closing of a liquor store in Arizona. Both Ryan Dumas and Vijal Suthar worked closely with our clients to close this loan. 

GRP Capital secured a fully amortized, 25-year permanent loan for the borrower. The loan closed with additional working capital in addition to covering all closing costs. 

Associate Vijal Suthar noted, “Our clients benefited a lot, because we already knew their business situation well. We had previously helped them apply for SBA emergency loans for their various businesses, loans that became available through the CARES ACT. As a result, we understood their situation, including some distinct complexities.”  Ryan Dumas added, “This new loan not only brought down our clients’ monthly payments, it also saved them six months of payments. Because we were able to close the loan prior to the SBA deadline of September 27th, the SBA pays for six full months of loan payments.”

Lenders are eager to fund liquor store loans, both purchases and refinancing. Liquor stores have continued to be profitable throughout the pandemic. They have required only modest modifications to assure the health of customers and employees. Most importantly, liquor stores have not experienced significant losses of revenue during the recent pandemic and many have actually increased their revenues, due to the limits and closures of bars and restaurants.

The GRP Capital team specializes in finding the right lender for each project. We save our clients time and provide options, as we research and apply for different funding sources. Our experience allows our clients to execute on funding within our proven lending network.

Closing this loan demonstrates GRP’s ability to secure funding for business owners in expansion even in these uncertain economic times. To be sure, business conditions are experiencing a “new normal”. However, business loans post-COVID 19 are possible under the right conditions.

Selling to the Next Generation

Sometimes in the business world, especially a family owned business, owners decide it is time for selling to the next generation.

The GRP Capital team worked hard with our clients to help them purchase this Florida hotel from their relatives. The price was very good, as is often the case in “arms length transactions”. Our clients are now ready to take over the full management of the property and reap all the revenues. The new owners are excited to do so, just in time for increased American travel.

Reasons for Selling to the Next Generation: 

• Current Owners wish to step back: The opportunity for selling to the next generation can be quite tempting. In doing so, the current owners can shed the responsibility of day-to-day management and operation. At the same, time, they also ensure that their younger family members have a path to accrue capital and credit.

• Younger Generation Exhibits Ability to Take Over Successfully: The younger generation is often quite adept at taking over the reins of leadership in their family businesses. Prior to the transfer, these younger owners need to accrue the required equity injection and develop a favorable credit rating. They need to be skilled, albeit young managers.

•  Selling to the next Generation Allows for Changes: Sometimes managers and owners need to make changes in order to increase revenue and hold down costs. These changes can be difficult for the older generation to take on. Examples of these innovations include updated software to track purchases and vendors, payroll systems, marketing campaigns and networking with the next generation.

Creating a Path Towards New Ownership:

Managing Partner Krishan Patel stated, “I was happy to help these clients transfer this hotel to the next generation. The younger family members are already highly skilled in accounting and hotel management. This property made it through COVID-19 and promises to provide good cash flow under their leadership.”

This loan took a bit of extra work to close. The loan process started before the pandemic and was paused by the lender. But there was a silver lining.  Due to the delay, our client was able to take advantage of the latest stimulus package. GRP Capital worked in tandem with the lender to see the loan through to closing, including underwriting the many other businesses owned by the client borrowers.

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.

Setting goals to achieve results: new loan in California

Setting goals is an important part of of being a successful businessperson. For many of our clients, their objectives include adding new businesses to their portfolio, expanding or remodeling, or refinancing current loans to improve cash flow. Setting goals helps you see where you are heading. While you are are setting goals, GRP Capital can then help determine the steps you need to realize your dreams.

GRP Capital’s  Senior Associate Ryan Dumas and our entire team were able to close a California hotel loan. Our client came to Ryan a while ago and he wasn’t quite ready to take on a new loan, but he needed financing to replace a private loan he was currently paying off. Ryan and the entire GRP team worked closely with him to structure his loan and to help him improve his financial picture. By setting a goal of improving his books, our GRP team could find more willing lenders from our network. The client had in his favor a solid and profitable hotel in a busy market. He and his management team are hands-on with their property. And most importantly, everybody had their eyes on the prize: closing that loan.

On the day the loan closed, our client posted pictures of a celebratory outdoor dinner with friends and business partners. With smiling faces, he also tagged GRP Capital, praised Ryan and the rest of our team, saying “You Rock!” and “We highly recommend u!”

Ryan Dumas remarked, “This client is our bread and butter at GRP Capital. He knows his business, he is a small businessman who just needed guidance and personal attention. We even helped him with some legal and title issues when those threatened to slow down the loan process. I know he and his team will continue to be profitable at this property.”

Setting Goals for Your Business:

• Improving Cash Flow. Ryan and the rest of the team can help you truly understand the financial picture of your business. We can often suggest ways  ways to minimize or eliminate expenses? Are there actions you can be taking to increasing your revenue? GRP Capital can help you take advantage of tax laws to minimize your tax exposure while still demonstrating the health of your business.

• Comparing Loan Products: The right loan can often bring down your monthly payments. Loans can also provide more permanent, reliable financing, especially if you are facing a balloon payment. Our GRP Capital team can discuss the variety of loans out there and help you choose from various lenders to secure the loan that most closely matches your goals.

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.

Finding Loans for Self Storage

Self storage continues to be a good business with strong profits and room for growth. As a result, many lenders are eager to fund purchase, refinances and construction loans in the self storage industry.

Why are Self Storage Loans Great Opportunities?

• Steady Demand: Did you know that 10.6% of households currently rent storage units, according to Spare Foot? These renters need this product because of housing transitions, moving into places that lack sufficient storage. In addition, renters run the age gamut, from college graduates to those moving into senior living situations.

• Recession Proof: Storage demand has remained consistent. People need storage  when housing prices go up and when housing prices go down,

• Strong Return on Investment: Self storage properties have posted high ROI, higher than other real estate classes.

• Attractive to Lenders: Lenders like storage businesses for their profit potential, their lower maintenance costs and the ease in which owners can release units when renters have quite paying.

GRP Capital has a large network of lenders, many of whom have demonstrated interest in loans for the storage industry. We can help match our best lenders to your specific needs.

If you are interested in any form of self storage loans, now is the time to act. GRP Capital Business Associate Shail Madhav is ready to discuss your plans and funding needs right now, so you can take advantage of current low rates and lender interest. All consultations are free and GRP Capital never charges fees to borrowers. 

Read more about other aspects of finding funding in today’s climate here:

Becoming a Better Borrower

What Businesses do Lenders Like Now?

GRP Capital Team coming to AAHOAcon25

Our team is excited to attend the AAHOAcon25, to be held in New Orleans from April 15th through April 17th. We can’t wait to be in NoLa to network and celebrate with all of you.

What makes the AAHOA conference so important to us?

Making Connections with Clients

We love talking on the phone and emailing our clients and lending partners. We even learn from each other on Zoom and conference calls. But AAHOACon25 lets us see each other face to face. We have the opportunity to hang out with our clients, to hear about their successes and challenges and their dreams. We find the time to get to know our clients better and figure out how we can help these entrepreneurs realize their aspirations.

Building our Lender Network 

We also strengthen our connections with lenders. Lenders typically love our business model. What’s not to love? We partner with fabulous clients, pre-package their loans and do the bulk of the document collection during underwriting. Because we know the lenders’ wishlist for loans (size, geographic area, debt coverage, what types of hospitality properties, other industry loans), we only bring them what they are looking for. Adding to our lender network benefits everyone, providing more options for a variety of financing.

Learning Together

There is much to learn from many experts. We can take away a ton of knowledge from attending the huge variety of educational opportunities at the AAHOA conference. Even more important, our learning is enhanced by being surrounded by our peers and mentors, clients and lending partners, old friends and new acquaintances.

GRP Capital President Rick Patel notes, “Our team will again be at AAHOA Convention; it’s an important time in the hospitality industry and we want to make sure that we all meet and get to know the people who can use our assistance. It’s the highlight of our year in many ways.”

Are you wanting some one-on-one time or free business consulting during the conference? Make connections with our GRP Capital team members now and we can reserve time to explore your business concerns and future solutions.

Downtown Orlando AAHOAcon24

Entire GRP Capital Team coming to AAHOAcon24

Our entire team is excited to attend the AAHOAcon24, to be held in Orlando, Florida from April 2nd through April 5th. We are thrilled to be in our own Sunshine State to network and celebrate with all of you.

What makes the AAHOA conference so important to us?

Making Connections with Clients

We love talking on the phone and emailing our clients and lending partners. We even learn from each other on Zoom and conference calls. But AAHOACon24 lets us see each other face to face. We have the opportunity to hang out with our clients, to hear about their successes and challenges and their dreams. We find the time to get to know our clients better and figure out how we can help these entrepreneurs realize their aspirations.

Building our Lender Network 

We also strengthen our connections with lenders. Lenders typically love our business model. What’s not to love? We partner with fabulous clients, pre-package their loans and do the bulk of the document collection during underwriting. Because we know the lenders’ wishlist for loans (size, geographic area, debt coverage, what types of hospitality properties, other industry loans), we only bring them what they are looking for. Adding to our lender network benefits everyone, providing more options for a variety of financing.

Learning Together

There is much to learn from many experts. We can take away a ton of knowledge from attending the huge variety of educational opportunities at the AAHOA conference. Even more important, our learning is enhanced by being surrounded by our peers and mentors, clients and lending partners, old friends and new acquaintances.

GRP Capital President Rick Patel notes, “Our entire team will again be at AAHOA Convention; it’s an important time in the hospitality industry and we want to make sure that we all meet and get to know the people who can use our assistance. It’s the highlight of our year in many ways.”

Are you wanting some one-on-one time or free business consulting during the conference? Make connections with our GRP Capital team members now and we can reserve time to explore your business concerns and future solutions.

Entire GRP Capital Team coming to AAHOAcon23

Our entire team is excited to attend the AAHOAcon23, to be held in Los Angeles April 11-14th. California, here we come!

What makes the AAHOA conference so important to us?

Making Connections with Clients

We love talking on the phone and emailing our clients and lending partners. We even learn from each other on Zoom and conference calls. But AAHOACon23 lets us see each other face to face. We have the opportunity to hang out with our clients, to hear about their successes and challenges and their dreams. We find the time to get to know our clients better and figure out how we can help these entrepreneurs realize their aspirations.

Building our Lender Network 

We also strengthen our connections with lenders. Lenders typically love our business model. What’s not to love? We partner with fabulous clients, pre-package their loans and do the bulk of the document collection during underwriting. Because we know the lenders’ wishlist for loans (size, geographic area, debt coverage, what types of hospitality properties, other industry loans), we only bring them what they are looking for. Adding to our lender network benefits everyone, providing more options for a variety of financing.

Learning Together

There is much to learn from many experts. We can take away a ton of knowledge from attending the huge variety of educational opportunities at the AAHOA conference. Even more important, our learning is enhanced by being surrounded by our peers and mentors, clients and lending partners, old friends and new acquaintances.

GRP Capital President Rick Patel notes, “Our entire team will be at AAHOA Convention; it’s an important time in the hospitality industry and we want to make sure that we all meet and get to know the people who can use our assistance. It’s the highlight of our year in many ways.”

Are you wanting some one-on-one time or free business consulting during the conference? Make connections with our GRP Capital team members now and we can reserve time to explore your business concerns and future solutions.

Deferred Maintenance: Planning and Setting Up a Capital Fund

Deferred maintenance: projects to keep up your commercial property that still have not been completed. It’s time to recommit to making your property look excellent and perform in peak condition.

Do you have deferred maintenance projects? What’s the best path forwards?

How to Make a Plan for Deferred Maintenance:

• First of all, understand your motivation: A property that is in good working order, that looks good cosmetically and operates appropriately reflects well on you as a business owner. This is important if you are ever looking to refinance or sell. In addition, guests and customers notice when their environment is looking tired. This affects word of mouth reputation about your business and can even show up in online reviews.

• Deferred maintenance may be allowing small problems to get worse: If you have experienced, for instance, small water damage and were just waiting for the right time to tackle these repairs, stop delaying. Appraisers and customers can easily spot water damage and it is an obvious sign of neglect. Further, water damage can cause serious issues beyond cosmetic ones.

• Consider Other Upgrades: Change out plumbing and fixtures, upgrade furniture and replace soft packages (linens, bedding, curtains) as well as larger, more extensive renovations.

• Create a detailed plan: First ask yourself if money were no object, what you would do to improve your property. Then figure out which of these items you can afford and which items retain or add the most value. Next, determine how long each project would last.

• Prioritize and Act: Create a calendar with all scheduled future maintenance, keeping notes on the budget and the timeline to complete each component. You know your property best. Work around its high and low seasons to determine the best timeline. Line up your contractors and workers and get to work!

Secure Good Advice: 

• Consult your franchise service director, if applicable.  Your franchise representative (if you have one) will help you prioritize and will understand what other business owners like you face. Ask for a site visit.  Specifically ask which projects have the greatest return on capital.

• Confer with your network. Arrange for a trusted owner of a business like yours for their advice.

• Contact GRP Capital.  We are happy to look at your financial statements and discuss what your business needs are. We can help you determine some of the best options to go forward.

Building Funds for CapEx and Utilizing them:

If you were in the position to have a Capital Expenditures (CapEx) fund prior to the pandemic, it’s time to start spending that fund. While you may have been focusing only on debt service and minimizing operating expenses from 2020 until now, you can now change gears.

If you have never set aside monies for CapEx, start now. We recommend designating 4% of your budget for CapEx. Further, we recommend setting aside money in a segregated fund, so that you can build up this nest egg and use it. These funds will be included in your balance sheet as an asset until you spend it.

If you are considering a loan for purchase or refinance and would like to discuss your plans for project maintenance or developing a CapEx budget and timeline, feel free to contact our team.  

Property Maintenance: Maintaining Your Brand

Property maintenance is important for a number of reasons. If you have been deferring maintenance to focus on operations, to keep costs down during the recent economic uncertainty, act now! It’s time to recommit to making your property look excellent and perform in peak condition.

What’s so Important About Property Maintenance:

• Maintaining Your Property is Maintaining Your Brand: A property that is in good working order, that looks good cosmetically and operates appropriately reflects well on you as a business owner. This is important if you are ever looking to refinance or sell. In addition, guests and customers notice when their environment is looking tired. This affects word of mouth reputation about your business and can even show up in online reviews.

• Deferred maintenance may be allowing small problems to get worse: If you have experienced small water damage and were just waiting for the right time to tackle these repairs, stop delaying. Appraisers and customers can easily spot water damage and it is an obvious sign of neglect. Further, water damage can cause serious issues beyond cosmetic ones.

Other maintenance issues to consider include changing out plumbing and fixtures, upgrading furniture and soft packages (linens, bedding, curtains) as well as larger, more extensive renovations.

How Should You Choose Which Deferred Maintenance to Do First?

• Consult your franchise service director, if applicable Request a site visit. Seek the knowledge and mentorship that these organizations provide. Ask for help in prioritizing projects, determining what improves your property the most and increases your appraised value. Specifically ask which projects have the greatest return on capital.

• Create a detailed plan: First ask yourself if money were no object, what you would do to improve your property. Then figure out which of these items you can afford and which items retain or add the most value. Next, determine how long each project would last.

• Prioritize and Act: Create a calendar with all scheduled future maintenance, keeping notes on the budget and the timeline to complete each component. You know your property best. Work around its high and low seasons to determine the best timeline. Line up your contractors and workers and get to work!

Building Funds for CapEx and Utilizing them:

If you were in the position to have a Capital Expenditures (CapEx) fund prior to the pandemic, it’s time to start spending that fund. While you may have been focusing only on debt service and minimizing operating expenses, you can now change gears.

If you have never set aside monies for CapEx, start now. We recommend designating 4% of your budget for CapEx. Further, we recommend setting aside money in a segregated fund, so that you can build up this nest egg and use it. These funds will be included in your balance sheet as an asset until you spend it.

If you are considering a loan for purchase or refinance and would like to discuss your plans for project maintenance or developing a CapEx budget and timeline, feel free to contact our team.