Pennsylvania Hotel Purchased with 504 Loan

Our clients successfully purchased a Pennsylvania hotel loan, using the SBA 504 loan program. They felt that the property had good revenue potential and that they were an ideal set of owner/managers.

Ultimately, GRP Capital matched the clients with a senior lender and a Community Development Corporation. Both of these are needed for a 504 loan. SBA 504 loans are especially attractive right now in the hospitality realm. Conventional lenders can still be hesitant to lend money for hotel businesses, especially outside large metropolitan areas. But the SBA guaranty is enticing to a larger group of lenders. In addition, an SBA 504 loan can be used for slightly more expensive loans

Senior Associate Ryan Dumas really enjoyed working with this partnership group. He stated, “These guys were ideal partners. They are strong, experienced, hands-on operators, who have shown previous success as owner/operators. Most importantly, they were organized, motivated and had a strong business plan. At least one partner knew the area well and was ready to be on-site. This property will benefit from their hands-on, knowledgeable management.”

Advantages of an SBA 504 Loan

• Lower down payment/equity injection
• Competitive fixed-rate financing for the life of the loan
• Long repayment periods (up to 25 years)
• Affordable payments as a result of the loan repayment periods, which impacts cash flow immediately

Should you consider a 504 loan?

• Are you and all owners of the borrowing entity U.S. Citizens? As of this writing, the SBA regulations require that an applicant for a 504 loan or a 7A loan must consist of 100% citizens. (In the past, a borrowing entity could have a small percentage of permanent residents, that is Green Card holders.)

• Are you current with all previous SBA loans? Each partner of the borrowing entity will have to disclose their current and past SBA loans. Any loans that are not in good standing could delay or prevent the loan from closing. Be particularly mindful of previous EIDL (Economic Injury Disaster Loans). How to find out if you are current with your EIDL loans?

• What’s your timeline? SBA 504 loans can take a little bit longer to close, because two entities are underwriting the loan. If you are considering accessing this type of loan, make sure your Purchase Sale Agreement (PSA) allows enough time to close. Consider engaging an attorney to represent you through this part of the process.

More information about the SBA Debenture Process

Why Choose GRP Capital?

Our GRP Capital team specializes in crafting financing solutions tailored to each client’s unique goals. We even have experience with lender dropouts and critically timed funding needs.

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 what sets us apart:

• We save you time by researching and identifying the best funding options for your project.
• Our expertise spans various loan products—including non-recourse loans, SBA loans, bridge loans, and conventional financing—so you can navigate even the most complex transactions confidently.
• Beyond lending, we provide strategic guidance on operational decisions that drive long-term business success.