Category Archives: Small Business

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? 

Client Support Makes the Difference

GRP Capital provides itself on using our entire team, focusing on the needs of our clients to give them maximum client support.

GRP Capital’s  Senior Associate Ryan Dumas and our entire team were able to close a Minnesota hotel loan. Our multi-pronged help came in many forms, all designed for client support and to reach the goal of closing the loan.

We structured this loan to buy out other partners. In addition, the new loan provided stable, more affordable monthly payments. Finally, the loan closed in time to reap the benefits of the SBA stimulus program.

As we worked with the client, we discovered a few bumps in the road. Firstly, our client had a previous old judgement, due to a business investment where they were a minor partner. The title company discovered this judgment during the initial title work.

In addition, the franchise was charging a substantial fee to change the ownership. Understandably, the client was tentative about paying the franchise fees prior to having a commitment from the lender. But the lender wanted to make sure the franchise transfer was underway.

It was time to get the team to work!

Elements of Client Support:

• Understand the client’s business. Ryan had multiple conversations with the clients to understand their goals and what the impediments could be. As some of these roadblocks arose, he kept the lines of communication open, so the clients, GRP Capital and the lender were all on the same page.

• Negotiation: GRP Capital President Rick Patel had several conference calls with the clients, to guide them in their negotiations with the franchise. He explained how to reduce the transfer fees to a more reasonable amount. Rick’s encouragement and direction worked. Franchise lowered the fees substantially.

• Bring in Experts. We used our network of trusted professionals to give the best advice on outstanding legal issues. This resulted in a fair and quick settlement, clearing the way towards closing.

• Never Stop! When one of our clients had to leave town and the lender could not make arrangements for a mobile notary, GRP Capital stepped in. We interviewed prospects, checked references and chose a reputable notary. Our notary even arrived at night. As a result, we closed the loan the next day.

Ryan Dumas remarked, “I was very pleased to close this loan. The buyers are experienced hoteliers who were ready to own this property outright. Even though the loan took extra effort from everybody on the team, I was proud of our client support. I know we built a long term relationship with these clients. I hope we can be of service to them in the future.”

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.

Choosing the Right Loan

Are you choosing the right loan right now?  If you are ready to secure funding for your business, you know there are many types of loans in the marketplace. What’s the best method for choosing the right loan, the one that most closely matches your business needs?

Choosing the Right Loan for You:

• What is the Purpose of Your Loan? Are you purchasing a new business or property? Refinancing? Constructing a new property? Buying out a partner? Renovating or converting a property? You can utilize different loans for different purposes; they are not interchangeable.

• How long do you want to need to pay back this loan?  How long do you intend to keep this property? How long will you need funding for? The longer the loan, the smaller your monthly payments. However, you will also have debt on your books for longer, which can affect future borrowing. Sometimes, there is a business opportunity that requires immediate action, which would necessitate using a loan that can close quickly.

• How much cash on hand do you have to fund this project? With the exception of refinances, most loans require an equity injection. Figure out exactly how much you are willing and able to contribute, along with your partners.

Types of Loans:

• Conventional Loans:  Conventional loans are traditional mortgages. These loans are secured by a first lien position on the real estate or business. This means that the collateral of the real estate and business “guarantee” the loan, along with any necessary personal guarantees of the borrower. Banks, credit unions and other financial institutions offer a variety of conventional loans.

•  SBA (Small Business Administration) loans: SBA loans can be used for a variety of financing needs associated with being a small business owner, including purchasing a business, refinancing an existing mortgage and expanding and renovating existing businesses. Their rates tend to be competitive. GRP Capital partners with a number of preferred lender partners (PLP) of the SBA in order to streamline the process of closing these loans.

• Bridge Loans: Bridge loans serve as a short-term solution when borrowers needs immediate funds. Bridge loans allow a borrower to make quick and strategic business decisions, without having to worry about securing long term financing and waiting for those loans to close.  This solution allows a client time to then secure permanent funding down the road. GRP Capital can help secure quick turnaround bridge loans. We also have access to our GRP Capital Debt Fund. We are proud of our reputation of being reliable, flexible and fair in utilizing this debt fund.

• USDA Business and Industry Guaranteed Loans (USDA B&I): These specialized loans are designed for projects in agricultural and rural settings. These loans support local employment and economic health in rural communities.

If you are considering a loan for purchase or refinance and would like to discuss choosing the right loan for you, feel free to contact our team.  

Missouri Office Building Loan

Our returning clients were ready to secure an office building loan. This group of partners regularly purchase a variety of commercial real estate properties. They had already done their research. As a result, when they engaged GRP Capital, they were completely ready for us to find the financing that was the right fit.

GRP Capital Managing Director Krishan Patel commented, “We know this client group well. We have now closed several loans with them. As a result, we have many of the documents that were needed in our system, which streamlined the process and shortened the timeframe. We refinanced their loan, bringing down their mortgage payments, which improved cash flow and freed up capital for other projects.” 

Are You Looking for An Office Building Loan? 

• Research the building: Check out the makeup of the tenants, the occupancy rate and how long the tenants have been there. What is the typical rent? How long are the existing leases?

•  Compare the actual building to office space nearby: How does this building compare to other competing office buildings? How well have the current owners maintained the property? How do the common areas look relative to other locations? What’s the traffic pattern to approach and leave this building? How do the rental rates stack up against comparable properties?

•  What’s Your Goal? Is this an underperforming property that you can turn around? Are you looking for steady rental income? Are you looking to upgrade and flip the property with a short term time frame? GRP Capital wants to understand why you need financing. What are your business goals? Why do you think this is the right time to secure an office building 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.

Wallet for personal financial statement blog

How to Fill out a Personal Financial Statement (PFS)

Lenders typically request that borrowers fill out a personal financial statement (PFS) when applying for a loan. This personal financial statement can vary somewhat, although the SBA uses Form 413. A PFS shows the bank a borrower’s cash position, how much liquidity they have to take on a new loan and their ability to pay back future loans. It’s important to understand the typical questions on a PFS, so you can fill them out accurately. Below are components of a PFS that are most confusing to our clients.

The Asset Portion of the PFS:

• What is Cash on Hand? Cash on hand is money that you have in checking and savings accounts and in cash on your person that is immediately available to you (liquid). Be prepared to furnish bank statements to support your cash availability. This is different from stocks and bonds, IRA’s or even Bitcoin.

• What do I need to know about my life insurance policies? You only need to declare life insurance policies if you have a whole life policy with a cash surrender value. So if you have a term life policy, you cannot consider it as a current asset, as it has no cash value.

• Real Estate and Automobiles as Assets:  Estimate the value of the automobiles you have and any real estate you own. This real estate includes your residences (primary and vacation homes). In addition, you will need to calculate the value of any commercial real estate you own. If you are a partner in a business that owns real estate, you can only claim the value of the real estate equal to the percentage of the business you own.

Declaring Liabilities on a PFS:

• Notes Payable and Installment Accounts:  Gather all of your personal loan and credit card statements to fill out the liabilities section of the PFS. You’ll need to know what your payments and balances are.

• Car Loans and Mortgage Loans: Your automobiles and real estate are assets, but if you owe money on them, they are also liabilities. Complete your PFS by stating what the payments and balances are, the interest rate, and in the case of mortgages, who the lender is and when the mortgage will be paid off. If your commercial real estate is for a business in which you are a partner, you only need to declare the percentage of the mortgage equal to your ownership percentage.

• Loans Against Life Insurance: Again, this is only applicable if you have a whole life policy (not a term policy) and you have taken out a loan against the cash value of the policy. Otherwise, this should be left blank.

• Unpaid Taxes: Most lenders would prefer that you pay off overdue taxes. But you can show a small amount on your PFS and work through that process prior to closing.

Net Worth:

Net worth is an equation. If you add up all your assets, and subtract all your liabilities, that is your net worth. It does not include your salary or your earning potential, just your declarable assets and liabilities.

We work closely with our clients to make sure the PFS is accurate. If you are considering a loan for purchase or refinance and would like to discuss your plans, feel free to contact our team. We will get to know you and your business objectives. Then we will recommend the best loans for you to consider. Initial consultations are free.   

FAQ’s for PFS (Frequently Asked Questions about Personal Financial Statements)

Lenders typically request that borrowers fill out personal financial statements (PFS) when applying for a loan. These personal financial statements can vary somewhat, although the SBA uses Form 413. A PFS shows the bank a borrower’s cash position, how much liquidity they have to take on a new loan and their ability to pay back future loans. It’s important to understand the typical questions on a PFS, so you can fill them out accurately. Below are components of a PFS that are most confusing to our clients.

The Asset Portion of Personal Financial Statements:

• What is Cash on Hand? Cash on hand is money that you have in checking accounts and in cash on your person that is immediately available to you (liquid). Be prepared to furnish bank statements to support your cash availability.

• What do I need to know about my life insurance policies? You only need to declare life insurance policies if you have a whole life policy with a cash surrender value. So if you have a term life policy, you cannot consider it as a current asset, as it has no cash value.

• Real Estate and Automobiles as Assets:  Estimate the value of the automobiles you have and any real estate you own. This real estate includes your residences (primary and vacation homes). In addition, you will need to calculate the value of any commercial real estate you own. If you are a partner in a business that owns real estate, you can only claim the value of the real estate equal to the percentage of the business you own.

Declaring Liabilities on a PFS:

• Notes Payable and Installment Accounts:  Gather all of your personal loan and credit card statements to fill out the liabilities section of the PFS. You’ll need to know what your payments and balances are.

• Car Loans and Mortgage Loans: Your automobiles and real estate are assets, but if you owe money on them, they are also liabilities. Complete your PFS by stating what the payments and balances are, the interest rate, and in the case of mortgages, who the lender is and when the mortgage will be paid off. If your commercial real estate is for a business in which you are a partner, you only need to declare the percentage of the mortgage equal to your ownership percentage.

• Loans Against Life Insurance: Again, this is only applicable if you have a whole life policy (not a term policy) and you have taken out a loan against the cash value of the policy. Otherwise, this should be left blank.

• Unpaid Taxes: Most lenders would prefer that you pay off overdue taxes. But you can show a small amount on your PFS and work through that process prior to closing.

Net Worth:

Net worth is an equation. If you add up all your assets, and subtract all your liabilities, that is your net worth. It does not include your salary or your earning potential, just your declarable assets and liabilities.

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

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.