Category Archives: Small Business

Gas Station Loans and Convenience Store Loans

We love to fund gas station loans and convenience store loans for our clients. These businesses continue to be solid investments, seemingly recession and inflation-proof. We routinely check in with our lending partners to see what their appetite is. They are telling us that they remain highly interested in funding gas station purchases, refinances, and construction for qualified borrowers. In fact, one of the first loans that the GRP Capital team closed after the COVID-19 pandemic began was a gas station development loan.

How we can help fund your Gas Station or C-Store:

• Understanding the Business: We have worked with a variety of clients who own gas stations and C-stores. We have expertise in funding the purchases, refinances and construction of gas stations and C-stores. We understand the nature of the business and many of its challenges, including staff retention. As a result, we can make the case for your business, showing its profitability and its potential for future profitability.

• Finding Motivated Lenders: We, like our clients, are carefully monitoring the ups and downs of our economy. Our lenders are doing the same. Gas station and convenience store owners have routinely demonstrated how essential their businesses are throughout the past two years of change. These businesses were able to pivot and be adaptable. In addition, customers appreciate the one-stop shopping at these shops, avoiding lines and larger crowds.

• We Do the Work So You Can Do Yours: Lots of small business owners work hard. However, we know that gas station/C-store ownership and management is particularly labor intensive. Our clients can rely on us to fill out documents, review them, obtain signatures, and set up site visits, all while working in partnership with the lender. We work hard securing your funding, so you can work hard running your business

• Fuel Supply Agreements: Fuel supply agreements set up an established “cut” for the supplier. This protects both the supplier and the gas station owner. No matter what the price of the fuel is, the owner will still make money. This built-in stability makes a gas station loan attractive for many lenders. We have been able to assist our clients in obtaining favorable fuel supply agreements, which will positively impact their profitability for a long time.

Contact Our Team For Your Financing Needs:  

If you are considering a loan for purchase, refinance or construction and would like to discuss your plans, feel free to contact our team. We have a network of lenders and can find the best match for your funding needs, saving your time and money, so you can focus on running your business.

What about your EIDL Loan?

If you have an EIDL loan (Economic Injury Disaster Loans offered by the Small Business Association), what do you need to know about future loan transactions?

  • What about buying a new business?
  • What about refinancing a current business?
  • What about selling my business?

Many of our clients have an EIDL loan. We encouraged our clients to obtain these during the most restrictive part of the COVID pandemic. These low interest loans gave needed relief to some of the hardest hit industries, including hospitality.

Selling a Business with an EIDL Loan:

• EIDL Loans Mostly Have to Be Paid off poor to sale: Any lender who is funding the purchase of a business with real estate will require that buyers own the property “free and clear”. This means that there cannot be any liens (claims from lenders) on the property or the business. So, sellers must pay off previous EIDL loans prior to or at closing.

• Perhaps One Exception:  Sellers may have multiple businesses or properties. Some sellers, especially larger corporate sellers, may have an EIDL for the parent company but not the smaller component business being sold. If the EIDL is for the parent business, the new lender may find a way to make an exception.

Paying off an EIDL at or before closing:  Be aware that the SBA does not accept payoff via wire. At closing the title or escrow company will have to make out a physical check for the balance of the EIDL. The borrower can find the balance on their SBA portal. The SBA website also has clear instructions for paying off the loan via mail.

I Have an EIDL and I want to Refinance

• Size matters!  If your EIDL loan is small, then the lender may agree to pay it off. They will roll the remainder of the EIDL into the total loan value. If the loan is larger, there are a few possibilities.

• Paying off an EIDL: You may be holding on to the proceeds of the loan (and therefore have cash on hand). But new lenders will not consider the proceeds of the EIDL as an asset without also considering your EIDL loan as a liability. Therefore, a large EIDL may negatively impact your debt to income ratio. The lender may consider that you have too much debt and require you to pay off or pay down the loan.

• Subordinating an EIDL: Often lenders will agree to subordinate an EIDL. This means that they will request permission from the SBA to delay receiving payments for the EIDL until the mortgage has been paid off. Borrowers have to officially request subordination and the SBA has to grant it. This process is not automatic. In addition, requesting subordination can take some time. We have found that subordination happens most easily when we work with our network of SBA preferred lending partners.

I Have Other Businesses with EIDL loans and I’m Getting a New Loan:

The lender will underwrite your entire file and look at your affiliate businesses. If your other businesses are cash flowing and covering your debts, there are no issues with other EIDL loans. We are happy to help you do a self-evaluation of your cash position for all of your businesses. This will help you if you need to make your portfolio stronger prior to looking for financing.

If you are considering a loan for purchase or refinance and would like to discuss your plans,  feel free to contact our team.  We have a network of lenders and can find the best match for your funding needs, saving you time and money, so you can focus on running your business.

EIDL Loans: What to know if you are buying, selling or refinancing

EIDL Loans (Economic Injury Disaster Loans offered by the Small Business Association) have helped many small business owners during the COVID pandemic. These low interest loans gave needed relief to some of the hardest hit industries, including hospitality.

Many business owners have EIDL Loans on the books. What do you need to know? What do you need to do? An EIDL has an impact on selling, buying and refinancing.

I’m Buying or Selling a Business with an EIDL Loan:

• All liens have to be released: Any lender who is funding the purchase of a business with real estate will require that buyers own the property “free and clear”. This means that there cannot be any liens (claims from lenders) on the property or the business. So, sellers must pay off previous EIDL loans be paid off prior to or at closing. Also, previous PPP (Paycheck Protection Program loans) will need to be have been forgiven.

• Perhaps One Exception:  Sellers may have multiple businesses or properties. If the EIDL is for the parent business, the new lender may find a way to make an exception.

Paying off an EIDL:  Be aware that the SBA does not accept payoff via wire. At closing the title or escrow company will have to make out a check for the balance of the EIDL. The borrower can find the balance on their SBA portal. The SBA website also has instructions for paying off the loan via mail.

I Have an EIDL and I want to Refinance

• Size matters!  If your EIDL loan is small, then the lender may agree to pay it off. They will roll the remainder of the EIDL into the total loan value. If the loan is larger, there are a few possibilities.

• Paying off an EIDL: You may be holding on to the proceeds of the loan (and therefore have cash on hand). However, a large EIDL may negatively impact your debt to income ratio. The lender may consider that you have too much debt and require you to pay off or pay down the loan.

• Subordinating an EIDL: Often lenders will agree to subordinate an EIDL. This means that they will request permission from the SBA to delay receiving payments for the EIDL until the mortgage has been paid off. Borrowers have to officially request subordination and the SBA has to grant it. This process is not automatic. In addition, requesting subordination can take some time. We have found that subordination happens most easily when we work with our network of SBA preferred lending partners.

I Have Other Businesses with EIDL loans:

The lender will underwrite your entire file and look at your affiliate businesses. If your businesses are cash flowing and covering your debts, there are no issues with other EIDL loans.

If you are considering a loan for purchase or refinance and would like to discuss your plans,  feel free to contact our team.  We have a network of lenders and can find the best match for your funding needs, saving you time and money, so you can focus on running your business.

Independent Texas Hotel Loan Closes

Our clients were ready to purchase a small, but profitable independent Texas hotel. It was adjacent to another franchised hotel, which they were also in the process of purchasing.

GRP Capital worked closely with the buyers and sellers. We paid particular attention to the specialization required to obtain loans for independent properties.

Senior Associate Ryan Dumas was pleased to close the loan. He remarked, “This independent Texas hotel is perfect for creating two market price points for my clients. The loan is affordable and stable and will allow them to continue the profitability of the current hotel.”

Special considerations regarding Independent Hotels:

• Hotel statistics . Franchised hotels utilize reservation and check-in systems that generate hotel statistics. These statistics include occupancy, ADR (average daily rate) and RevPAR (Revenue per available room). Independent hotel operators may or may not utilize sophisticated programs. Thus, generating this important information (needed by both lenders and appraisers) can be a challenge.

• Sales and Occupancy Tax Records Required:  Most independent hotels do not participate in STR reporting. In addition, they are not using franchise check-in software. As a result, it can can be difficult to ascertain their revenues and profitability. Lenders and appraisers will accept two different third party reports: either business bank statements or sales tax receipts that show the revenue basis of monthly occupancy taxes. Sellers of independent hotels should be prepared to provide one of these sets of documents.

• Financials. It’s our job at GRP Capital to comb through seller financials. We want to make sure they match up with the hotel statistics and the taxes. Then we can provide a very clear picture to lenders and appraisers. We want all of the stakeholders to understand the current profitability of a property and its potential.

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.

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.