Category Archives: Small Business

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.  

Denny’s in California: Business and Real Estate Loan Closes

Business loans that combine business and real estate are attractive to lenders. GRP Capital Managing Director  Krishan Patel  led the team that closed this southern California restaurant loan.

Why Lenders Prefer Loans that Combine Business and Real Estate:

• One Word: Collateral Loans that combine business and real estate have significant collateral, which gird the deal. Many businesses can have ups and downs, especially as the pandemic continues to evolve. Very few businesses are immune from these economic vagaries. However, real estate tends to be more stable.

•  SBA Guaranty: Small Business Administration (SBA) loans are dominating certain business sectors. These include most hospitality loans. As an added incentive, SBA also shows preference for loans that combine business and real estate.

Clients Were New to SBA: 

Patel remarked: Our clients came to us after listening to our remarks at the AAHOA webinar following the passage of the original SBA stimulus package. Our clients, despite being very experienced entrepreneurs, had never utilized SBA for their funding needs. They were eager, however, to secure a government guaranteed loan. In addition, they were looking to establish a new banking relationship. We knew just the lender for them, one that has found great success in closing SBA loans and was also nearby. Our clients were pleased with the results and told us “they appreciated our assistance in expediting this transaction.” 

GRP Capital secured a fully amortized, 25-year permanent loan with low interest rates.  The owners were able to lower their monthly mortgage. In addition, they benefited from a reduced mortgage payment for the first few months as part of the latest stimulus package. 

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.

Partnership Loan: Complex but Closed!

A partnership loan is very common. A partnership loan allows its members to pool their resources and talents to divide up the costs and responsibilities of a new business endeavor. GRP Capital is pleased to announce that Managing Director  Krishan Patel has just closed a loan on a large partnership for a new property in New Mexico.

While a partnership loan may be common, it can make a closing more complicated.

Typical complications in partnership commercial real estate transactions:

• Who will be officially managing the business? For this deal, two of the six partners agreed to be the managers. Their operation agreement clearly stated this setup. At signing, only the managers had to sign the full loan documents, while the other partners just had to sign guaranty paperwork. We even arranged for out of state signings.

•  How will equity injection be handled? For this loan, the partners were extremely organized about getting bank statements that were clean (free of large hard-to-trace deposits in the last three months) and using those to contribute their equity. It is very important for partners to be transparent with each other about their sources of equity. They need to be sure that their equity contributions  will be be acceptable to the lender.

How We Knew this was a Good Partnership:

Patel remarked, “I was very pleased to get to know this group of motivated, bright entrepreneurs. To be sure, they had carefully thought through many aspects of their purchase. Consequently, they contacted us to take this loan from letter of intent to closing as smoothly as possible. In order to meet their needs, we communicated with them regularly and they appreciated the transparency of the loan operations. They were model clients: organized and responsive.” 

GRP Capital secured a fully amortized, 25-year permanent loan with historically low interest rates.  The partners took possession of the property and are ready to make this business even more profitable in the future. In addition, the partners are able to benefit from a lowered mortgage payment for the first few months as part of the latest stimulus package. 

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.

Challenging Loans? No Problem!

We’re not afraid of challenging loans!

When the owner of an Alabama hotel contacted Senior Associate Ryan Dumas, he needed solutions. Previously, the seller had found a buyer and they had found a lender, too. Unfortunately, the lender they chose was not able to take the loan to closing. The buyer and seller were motivated and had a good relationship with one another. As a result, their shared goal was very simple. They wanted to close the loan and not to waste any more time trying to source a motivated, efficient lender.

Ryan, who has extensive experience with challenging loans, worked with the seller and the buyer. He learned about the property and made the case that it deserved funding. Our GRP team quickly obtained a letter of intent from a regional lender. We knew it was important to select a lender who believes in hospitality lending,  even under the current economic uncertainties. We closed the loan, which resulted in a new property for our buyer and a closed sale for our seller. Both the seller and the buyer are happy with Ryan and our GRP team and were pleased to finally move in or move on!

This loan took advantage of low interest rates as well as the new SBA program which waives the guaranty fee as well as providing for some mortgage relief.

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.

Getting Ready to Borrow? Do These Now!

Are you getting ready to borrow money? With continuing low interest rates, now is an ideal time to start or grow an existing business.

We at GRP Capital guide our clients from the germ of a business idea to receipt of funds.

Many clients come to us with good business plans and even sufficient equity and/or debt coverage. But many clients neglect what we call due diligence. Due diligence is really understanding and researching the elements necessary to close the loan. Due diligence also means engaging professionals who will advise and serve your interests.

How You Can Be Ready To Borrow:

• Hire your own attorney:  An attorney, hired by you, can examine your purchase agreements, loan documents, and the title commitment letter and policies. A qualified attorney will protect you and your business interests and can even negotiate on your behalf. Borrowers are not always required to hire an attorney; however, we do not advise trying to save money by NOT hiring an attorney.

• Ask about previous environmental reports:  Typically, when a bank loans money, they will arrange for various site visits and reports. If you are looking at buying a business or if you are refinancing, the lender will require previous environmental reports and will also engage an appraisal. If the property never had an environmental report (maybe the private lender didn’t require it), you need to be sure that nothing adverse will be revealed. Always ask owners to see their ESA (environmental site assessments). This will ensure that you know about any issues with the property. Of particular concern are nearby gas stations and automobile repair shops.

• Look into title work and previous surveys: Not every property has a recent survey on file. Nowadays, most lenders are requiring updated surveys. Engaging a surveyor and obtaining the survey can take 4 weeks. Shortening the time frame comes with a surcharge. So if you are refinancing and don’t have a survey on hand, you will probably need to engage one. If you’re purchasing a business which includes real estate, as soon as you receive a letter of intent from the lender, you should consider engaging a survey, if necessary.

• Meet with your accountant and get your documents in order: Let your accountant know that you are in the market for a loan. He or she will need to make sure you have up-to-date financials, which include Profit & Loss statements and Balance Sheets. Your accountant should have filed your tax returns or extensions. In addition, you will have to identify all of the components of your business debt.

Be Ready for Site Visits:

• Put Your Best Foot Forward: If bank personnel or appraisers are coming to look at your business, understand your business plan and be able to explain how you will be profitable. GRP provides coaching to clients to help them understand the most important messages to relay to site visitors.

• Clean House: If you are looking to refinance an existing business, the property should be in decent shape with minimal deferred maintenance, if possible. If you are planning to renovate with the proceeds of the loan, you should be able to detail what will be improved and how much it will cost.

• Have a Plan for Obvious Problems: If the property is in need of obvious repairs (water damage, parking lot issues, etc.), be honest about those, be sure that you can explain the timeline and the financing of these planned improvements.

Be Ready to Borrow!

•  Clients who haven’t done their due diligence can experience frustration during the loan process. Not having a survey, an ESA or your own attorney can delay or even derail a loan closing.

• We will help guide you in the loan process. But we hope these ideas will help you before you even call us. When you have done your due diligence, you really are ready to borrow!

One of our chief responsibilities is advocating for borrowers. Even in the recent economic uncertain times, we have continued to advocate for our clients, and successfully closed loans.

Our Great Opportunities series discusses various aspects of the changing economic climate. There are still opportunities to secure funding for specific business plans. Read more about other aspects of finding funding in today’s climate here:

Becoming a Better Borrower

What Businesses do Lenders Like Now?

Fast Closing for Hotel Purchase in Colorado

GRP Capital is pleased to announce that Managing Director  Krishan Patel executed a fast closing on a hotel purchase loan for our Colorado client.  

GRP Capital secured a fully amortized, 25-year permanent loan with historically low interest rates. Because the previous note on this property was a Small Business Administration (SBA) 504 loan, time was of the essence. SBA 504 notes can only be paid off on one day per month (typically the third Thursday). We knew a fast closure was critical and were able to close 21 days from LOI to funding. A fast closing also ensured that the this loan was eligible for SBA’s 6-month subsidy. As a result, our clients have no payments for the first six months of the loan. 

Patel remarked, “We know these clients very well, as we recently closed another loan for them. When we realized we would only have 21 days to close this loan, we knew we had to work as partners. We used as many of the previous documents we had gathered from our previous work with the client. For their part, our clients were incredibly organized and responsive, turning in documents and information quickly. As a result, the lender was also responsive and quick-moving. We were thrilled that we could accomplish this fast closing, saving our clients six months of loan payments.” 

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.

Speedy Closing for Hotel Purchase In Kentucky

Another speedy closing is in the books. GRP Capital Senior Associate Ryan Dumas was able to close this loan rapidly and efficiently with the help of our team. Our client, who was actually the seller of this property, wanted a smooth and quick closing, Ultimately, he wanted to transfer ownership of the property in preparation for new business ventures. 

GRP Capital secured a fully amortized, 25-year permanent loan. The buyers were able to take advantage of continued low interest rates.  In addition, the quick closing also ensured that the this loan was eligible for SBA’s 6-month subsidy. As a result, the buyers have no payments for the first six months of the loan. 

Our client told us after the closing, “Your teamwork is amazing and guided us step by step. I have never seen an SBA loan close this fast.” Ryan Dumas was proud of GRP’s ability to execute this speedy closing efficiently and smoothly. In order to accomplish this, the GRP team worked in partnership with the buyer, the seller, the lender and many third party vendors. As a result, the client and Ryan are already discussing future business 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 assist you.