Category Archives: Small Business

State Flag of Florida; we specialize in Florida hospitality

Capitalizing on Florida Hospitality with GRP Capital

At GRP Capital, we specialize in helping businesses thrive in the dynamic Florida hospitality market. While we are a national company with a track record of closing loans across the United States, our expertise in Florida’s hospitality sector sets us apart. We understand the unique nuances of this diverse market and are proud to support entrepreneurs pursuing success in Florida’s booming hospitality industry.

Recently, we had the privilege of assisting a client who was ready to make his mark in the Florida hospitality scene. With prior experience managing multi-family residential properties up north, he sought to transition into hotel ownership in Florida. His goal? To combine his operational expertise with his love for the Sunshine State.

Krishan Patel, GRP Capital Managing Director, reflected on the partnership:

“We love working with clients who bring strong skills from other industries and are eager to apply them to new ventures. This client was organized, well-capitalized, and determined. He had done his homework and was ready to embrace the challenges of entering a new business.”

The GRP Capital team guided him through the complexities of securing a hospitality loan. These included connecting him with a lender and a network of other professionals like surveyors and title officers was also helpful. Today he is successfully managing his independent East Coast hotel, just in time to profit from Florida’s high season.

Florida Hospitality Basics:

• Florida is many markets. Florida is a large, populous state. As a result, the marketplace is varied. Some lenders prefer coastal properties, while others focus on inland or independent businesses. Understanding these preferences is crucial for securing financing.

• Insurance Requires Planning  The insurance landscape in Florida can be challenging. Many lenders require wind coverage, which can be costly. Collaborate with a trusted insurance agent. Obtain accurate quotes and ensure that your business plan accounts for all insurance costs.

• Seasonality Matters:  Florida properties often experience pronounced high and low seasons. Some hotels rely on large group events during slower periods. Research your property’s market drivers, such as major clients or recurrent events to develop a realistic revenue strategy.

Our GRP Capital team specializes in finding tailored financing solutions for every project.

Whether you’re purchasing, refinancing, or building from the ground up, our extensive network of lenders ensures you’ll find funding that aligns with your goals and cash flow needs.

Here’s how we add value:

  • We save you time by researching and identifying the best funding options for your unique project.
  • Our expertise spans various loan products—including SBA loans, bridge loans, and conventional financing—so you can navigate complex transactions confidently.
  • We provide guidance not only on lending but also on operational and strategic decisions that impact your business success.

If you’re considering becoming a first-time or repeat hotel owner in Florida or beyond, let’s discuss how we can help you achieve your business goals.

Collateral and a Central Florida Refinance

Collateral is an important part of many business loans. Your collateral “secures” your loan. It is the tangible “thing” that the bank knows has value.

Our Central Florida client was ready to refinance. Their business has been successful, with over a decade of stabilized income. The new loan was structured to free up capital for other business projects.

However, our client’s property, a waterfront hotel, consisted of multiple parcels. The hotel did not operate on every parcel, but they leased out other parcels, including a nearby boat dock. Even more significantly, their revenues included these lease payments.

Many lenders insist on including every single parcel in their loan, especially when those parcels are a revenue source. But including every single parcel in this collateral was not ideal. First of all, it would be complicated. Additional parcels mean additional title and survey work. And each parcel has to be appraised.

GRP Capital was able to work with our lender. We demonstrated that the hotel parcel alone had high value, enough to collateralize the loan. Working with our lender and building on the trust we had developed with them was crucial. It kept the loan as simple as possible and preserved our client’s collateral, too.

Collateral Basics:

• Your collateral will be appraised. An appraiser will determine the value of your collateral. This value has to meet or exceed the value of the loan.

• Collateral Shortfalls  Sometimes collateral values come up short. This happens. When it does, there are a few options. If this is an acquisition, the buyer may be able to renegotiate a discount on the sale price. Alternatively, borrowers can offer other assets as temporary collateral, while the loan is being paid down. Finally, some clients take out a small life insurance policy to obtain extra collateral.

• Consult experts before signing a PSA:  A PSA (Purchase Sale Agreement) makes assumptions about collateral. In addition, a PSA often requires “hard money”, a non-refundable amount. Therefore, if you can, contact GRP Capital prior to signing a PSA. We can save you money, especially if we believe the price is not going to be appraised to fully collateralize.

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 or engage in construction, 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.

Refinance for cash out

Cash Out with a Refinance

Our client needed to pull cash out to upgrade their hospitality property but could not refinance due to the structure of their debt.

The amount they needed for their cash out was smaller than our typical loans. However, this was a repeat client who had approached us, seeking our counsel. Our management team looked carefully at all of their businesses and discovered a possibility. They owned an office building which was eligible for refinancing. There was even sufficient equity to pull out cash during the refinance.

Our client was pleased to close the loan and begin their upgrade.

GRP Capital is celebrating its tenth anniversary in 2024. This longevity has allowed to us to deepen our list of repeat customers. This benefits everybody.

Repeat Client Benefits:

• We know you! Our repeat clients are already “in the system”. We have their pertinent information, we understand the structures of their businesses, we even know who their team of professionals are. The “getting to know you” phase is already taken care of. We know what aspects of this process are easiest for you and your team and which present challenges at times. We are prepared for potential bumps in the road. Particularly with refinances and those with cash out components, this is critical.

• You Know Us!  Repeat clients know the “GRP Capital way”. You know how we match you with a lender, how we internally underwrite your file and how we process loans. There are no surprises as you already know how we communicate and the roles we have from business associates to credit analysis, from management to loan processing.

• We know your people:  If we have closed loans for you in the past, we may already have dealt with your attorney or your accountant. We already have emails for your insurance agent, your title agent and your franchise representative. Knowing how all of these professionals handle their business allows for seamless operations.

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 or engage in construction, 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.

Cash out for refinance

1031 Exchange for New Florida Hotel Owner

Our Florida client came to us with a 1031 exchange.

The client was getting ready to sell a Georgia property. They were using the proceeds to purchase a new hotel in central Florida. To minimize their tax exposure, they were utilizing a 1031 exchange.

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. 

Our entire team worked closely with our client, always mindful of the 1031 exchange deadline.  He is now the proud owner of his hotel. He is very skilled at increasing profitability and is ready to take on the challenges of his new property. Our client was appreciative of the availability of the entire GRP Capital team, even exclaiming, “You always are there for me. I appreciate what you are doing.”

Tips for Handling a 1031 Exchange Deadline:

• Secure specialized help. Be sure your attorney has experience with 1031 purchases and sales. In addition, be careful when choosing a title company for the sale of your property. Be sure they have the ability to hold the proceeds in escrow as you wait for the purchase to go through.

• 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 1031 exchange deadline. The SBA (Small Business Administration) is still a great resource for hotel loans, but be aware that SBA loans take a bit longer to close, especially 504 loans.

• 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 and let them know your 1031 exchange deadline.

• 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 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 or engage in construction, 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.

Florida Gas Station Loan Closes

Senior Associate Ryan Dumas is pleased to announce the closing of a loan for a gas station in central Florida. The loan funded at 86% LTV (loan to value), including inventory costs. These were very favorable terms, and we are proud of this high leverage loan. In addition, the interest rates were extremely competitive.

This loan closed, despite two hurricanes coming through the area. Fortunately, neither one materially affected the gas station.

Ryan had this to say about the deal, “We had a great team collaborating on this deal. My client was working with an experienced gas station broker and also a very responsive attorney. We were able to quickly get the documents needed from the sellers and the buyer. Therefore, our lender was motivated, too. As a result, the lender quickly approved and scheduled the closing. I hope we can work with lots of these guys again, as they are bright, experienced business people.”

How to Set Yourself Up for a Quick Closing

• Organized Documents: Sellers and buyers need to have their vital documents in tip-top shape. If you think a business loan is coming down the pike, gather your materials. Create your own personal financial statement. Organize documents about businesses you own, like tax returns and financials. Contact your accountant and get up-to-date financials on all your businesses, even if it is not your practice to receive monthly financials.

•Engage Professionals: Consult with an attorney and your accountant before making business decisions. Call our GRP Capital Team before you even sign a PSA. Ask your advisers, “Can I afford this? What is a reasonable price? Do you think the timing is good now?”

• Get insurance in place now: The commercial property insurance marketplace is very volatile right now. Start the process of finding insurance immediately and figure out if you can afford the costs. As soon as you can, obtain insurance certificates. Insurance issues are one of the prime reasons for delayed closing. Waiting to purchase insurance until the last minute usually backfires.

•Be Flexible: If a quick closing is a priority, be ready to pivot. If an appraisal comes in short, buyers and sellers may have to renegotiate. Sometimes we have to tweak the structure of the loan, especially for SBA approval.

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, purchase or engage in construction, 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.

New Mexico Native American art

New Mexico Hotel Refi Offers Low Rates

GRP Capital New Mexico hotel owners secured financing that offered market-best low rates.

Ryan Dumas and the GRP Capital team worked very diligently with this client group. The partners really had one overarching goal: securing lower rates. Their current note had a high interest rate. Therefore, their new loan needed to show significant savings. An SBA 504 loan was the best choice for them. It offered stable, low rates. More importantly, the SBA guarantee made the loan more attractive to lenders.

Senior Associate Ryan Dumas reflected on the path to get the loan closed. “Our clients are experienced in this marketplace. However, New Mexico is a smaller market. We needed the SBA to help support this loan in order to entice a lender. I was thrilled that this new loan is a full 3 points lower than the clients’ previous mortgage. They will be saving serious money, which they can use personally or professionally. They will continue to be a significant employer and business in their small town.”

Using an SBA 504 to Access Low Rates

  • GRP Capital has connections with multiple CDC’s across the nation and the lenders who are interested in 504 loans.
  • The 504 program requires utilizing a Certified Development Company (CDC). The CDC is SBA’s community-based nonprofit partners who promote economic development within their communities. CDCs are certified and regulated by SBA.
  • The SBA 504 structure guarantees loans, so that lenders face lower risks.
  • We are very careful to ensure sufficient SBA eligibility prior to choosing a loan vehicle. If you have any questions about what this means, please contact us.
  • In many marketplaces, the SBA guaranteed loans are competitive with conventional loans.
  • SBA loans may often be the best bet for achieving lower interest rates.

Contact Ryan if you are considering SBA funding, 504 Loans, Green Loans or any other loan products.

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, purchase or engage in construction, 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.

Third Beach Hotel Buy

Ryan Dumas and the GRP Capital team are very happy to have closed another Carolina beach hotel loan. Our clients decided to embark on an SBA 504 loan, utilizing the Green program. They will be adding solar panels to their hotel, reducing electric consumption and bills.

Senior Associate Ryan Dumas and our entire team collaborated with our very motivated clients to get this somewhat complex loan closed.

Ryan, who has now closed three loans with this client, stated:

I really value this client group and was so happy that they came to me for a third time to find financing. The lead borrower has a lot of knowledge about this resort community. Of course, he is an excellent hotelier. It was critical to place this loan with the SBA 504 Green Program. When you use the Green program, it preserves eligibility. Since the partners have other SBA loans, they didn’t max out with this loan. And now they are installing solar panels, which are ideal for sunny climates. Even more importantly, this kept the loan affordable, as the partners have other future business deals in mind.

Advantages of the Green Program for a Beach Hotel

  • There are certain limits to an SBA 504 loan. However, utilizing a Green Loan does not “count against” your eligibility.
  • Green Loans can be used to reduce energy costs and to utilize renewable energy. A sunny and/or windy location near a beach is perfectly situated.
  • We are very careful to ensure sufficient SBA eligibility prior to choosing a loan vehicle. If you have any questions about what this means, please contact us.
  • The 504 program requires utilizing a Certified Development Company (CDC). The CDC is SBA’s community-based nonprofit partners who promote economic development within their communities. CDCs are certified and regulated by SBA.
  • GRP Capital has connections with multiple CDC’s across the nation and the lenders who are interested in 504 loans.

Contact our team if you are considering SBA funding, 504 Loans, Green Loans or any other loan products. We can help you determine the right mix of loan types for all of your business financing needs.

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, purchase or engage in construction, 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.

Partner Group Buys New York Hotel

The New York hotel marketplace can be complex. Real estate taxes and procedures can be complicated with commercial real estate deals. But our clients were ready to purchase a New York hotel. They perceived that the state has largely bounced back from COVID, especially upstate.

Working closely with our entire team, they purchased the hotel and are ready to take advantage of summer high season. Our clients selected SBA financing for their loan. As a result, our team needed to be nimble, especially with changes in the SBA administration. Everybody was particularly mindful of the rules for SBA eligibility.

Senior Associate Ryan Dumas was excited to close this loan. He remarked:

My clients were ready to purchase this upstate New York hotel and have a good handle on this specific market. An SBA loan was the best loan vehicle for them. However, we were all aware of changes in the SBA. We had to make changes to the loan details a couple of times, but I was thrilled to get this across the finish line. I know my clients will own and manage this property in ways that maximize revenue, while keeping an eye on expenses.

Is an SBA Loan in Your Future?

  • The Small Business Association (SBA) has multiple loan programs and guarantees. They each have their own eligibility standards.
  • SBA loans may be the best choice for certain markets and for certain types of hospitality properties, especially hotels with external corridors.
  • Because of changes to SBA staffing and increased scrutiny of non citizen partners, borrowers should be aware that the SBA approval can take three to four weeks, in addition to lender underwriting and approval. (These can happen simultaneously.)
  • SBA also limits the amount of SBA debt each guarantor can have. This debt load does not include prior EIDL’s (Economic Injury Disaster Loans).

Contact our team if you are considering SBA funding or any other loan products. We can help you determine the right mix of loan types for all of your business financing needs.

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, purchase or engage in construction, we would love to discuss your business plans with you. If you are considering becoming a first-time (or second or third time!) buyer, we can assist you.

Georgia hotel courtyard in Marietta

Georgia Hotel Owners Secure Triple Success!

Our clients, Georgia hotel owners of three independent properties, achieved an impressive trifecta by closing three loans all within 36 days of each other. Working closely with our entire team, they refinanced two loans and closed a new one, freeing up SBA eligibility, and unlocking new opportunities.

The outcome was impressive: two refinanced conventional loans and the successful purchase of a new Georgia hotel. Additionally, they were able to restructure their ownership simultaneously.

Senior Associate Ryan Dumas expressed his enthusiasm for the project, stating:

My clients possess a deep knowledge of the Georgia hotel market. I’m thrilled that we matched them with a lender who shares their vision for independent hotels. The lender’s flexibility in incorporating all three properties into the deal was key. Because of this, the clients’ loans have extremely favorable rates and the most stable financing available.

What is SBA Eligibility and How Did it Affect These Georgia Hotels?

  • The Small Business Association (SBA) has multiple loan programs and guarantees. They each have their own eligibility standards.
  • This Georgia hotel took advantage of the SBA 7(a) program. There are also 504 loans and subsets of those which include Green loans.
  • SBA 7(a) loans have an upper limit, typically $5,000,000.
  • SBA also limits the amount of SBA debt each guarantor can have. In this instance, moving other loans out of the SBA program freed up eligibility. This debt load does not include prior EIDL’s (Economic Injury Disaster Loans).

Is your project a good fit for an SBA loan or combining an SBA loan with other loan types?

  • What is the size of the loan or loans you are needing?
  • Who will be guaranteeing your loans?
  • Do the guarantors have other SBA debt? If so, how much?
  • What interest rates and terms do you have on loans you are wanting to finance?
  • What interest rates and terms match your budgeting needs and your business plans?

Contact our team if you are considering SBA funding or questioning your eligibility. We can help you figure out the right mix of loan types for all of your business financing needs.

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, purchase or engage in construction, 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.

Dallas skyline for Texas Hotel

Texas Hotel Owner Buys in Dallas Suburbs

Our client is a new owner of a Texas hotel, situated in a prosperous Dallas suburb.

Senior Associate Ryan Dumas and the rest of the GRP Capital Team helped get this loan over the finish line. Our Texas hotel owner was using 1033 exchange funds. As a result, there was a strict timeline. Ryan noted, “Hospitality acquisitions aren’t always easy these days. There are some specific components of hospitality loans that can slow things down. We worked hard to make sure nothing pushed us past the deadline. We were very aware of the tax savings for our client. We were particularly pleased that our lender was prepared to close in 32 days.”

Nearly every borrower wants their loan to close right away, and we try to accommodate. But exchanges like a 1031 or 1033 are special circumstances.

What Can You do to Close Your Loan More Quickly?

  • Start working on your insurance immediately. The economics of the insurance business are very tenuous right now. Particularly in flood and wind-prone areas (including a Texas hotel), nailing down insurance is critical. As soon as you are in the market for a loan, contact your trusted insurance agent. Obtain quotes.
  • Finalize your insurance decision. We understand wanting to save money. But getting your insurance finalized takes more than a day. When you have quotes, make a decision! Bind the insurance! Your loan papers cannot be signed without existing, bound coverage.
  • Communicate with your franchise if applicable. Find out when your agreement will be executed and released. Lenders require executed documents in escrow or on hand to close.
  • Survey? If the survey looks like it was handwritten by somebody in the 1970’s, the lender or title may likely require a new one. We have a network of third party vendors and can suggest a good surveying company to update or create a survey.
  • Hire an attorney. Commercial loans are a big undertaking. Attorneys can save you time and money.
  • Make sure your personal and business files are in good order and ready to submit. File your taxes, obtain updated financials, be able to produce business statistics.

Previous closing using 1031/1033 exchanges

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, purchase or engage in construction, 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.