Tag Archives: hotel loan

Client-Focused Gets the Loan Closed

What does it mean to be client-focused?

At GRP Capital, client-focused means understanding the specific needs and wishes of our clients. Every loan is different and every borrower is unique. We find out from our clients what the most critical aspects of their loans are and try to match them up with the best fit for their needs. We never try to shoehorn a square peg into a round hole!

Our Carolina clients worked closely with Senior Associate Ryan Dumas in order to purchase a new hotel, using the proceeds from a recent sale. The clients came to us after parting ways from a previous lender, who could not honor the terms the borrowers had signed up for.

Ryan said, “We always work as a team to help our our clients and this was no exception. The borrowers had a busy schedule including travel and so did the seller. But we stayed on top of lots of details. First, we collaborated on the personal financial statement with the buyers, to make sure it was accurate and showed good post-closing liquidity. Then our team helped make sure the PIP was accurate and had a realistic budget. Later we also worked very closely with franchise, insurance providers and lenders, all of whom had their own processes and their own requirements. And just to make things more complex, the borrowing group had several minor partners.”

What Does Client-Focused Mean?

• Know our client’s business. We take the time to know our borrowers. Before we try to match them with a lender, we know the strengths of their business plan, possible roadblocks to funding and their strengths as borrowers.

• Think Two Steps Ahead We plan your loan process from the time you make an inquiry to us until you sign your loan documents and get funded. We set a target date and determine what aspects of your loan could take the most time. Whether it is an old gas station that used to be on the corner of your property, a previous insurance claim or a couple of dings on a credit report, we are prepared.

• Quick and responsive communication We are known for our speedy response time. Our loan processors always return emails and phone calls quickly. Taking on a new loan is stressful, so we want fast, clear communication all the time. And even if our clients don’t know it, we have regular meetings about your loan twice a week to make sure we are making adequate progress.

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.

Michigan Hotel Loan Closes

Dominating the market with a new Michigan hotel loan.

That’s what our clients are now doing. Previously they owned another hotel at different price points not too far from this Michigan location. Now the purchase of this new property means they really are dominating the local market. Ultimately, they can now target different customer bases through their marketing and their differentiated rate structures.

This is the third loan closing Senior Associate Ryan Dumas has accomplished for this partnership group. Ryan worked closely with the younger partners, who are next generation hoteliers. To do so, Ryan, along with our management team, provided expert guidance. As a result, this Michigan hotel loan closed with favorable terms. Ryan said, “These clients are experts in running their hotels. However they needed our expertise in loans, especially moving from non-traditional to traditional financing. They have reliable, steady financing now, and they can focus on operational challenges.”

Clearly these clients turn to Ryan and to GRP Capital for their financing needs or for expert business consulting.

Advantages to owning multiple properties in one market:

• You already know the local market. Adding a second property in the geographic area you know means you don’t have to research new markets. Most likely, you already know the demand generators. You also know the typical customer breakdown (corporate, group, leisure, etc.)

• Different Products for Different Customers Offering two different hotel flags means that customers have choices. In addition, marketing can often go further if customers are utilizing franchise loyalty programs. And you can emphasize different aspects of each property to reach a variety of customers.

• Staffing synergy: Staffing can be a challenge. Therefore, multiple properties allow for fuller employment. And management-wise, you do not have to duplicate efforts in terms of supplies, payroll and accounting.

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.

Minnesota Hotel Loan Closes Quickly

Our clients are very experienced hotel owners and know the Minnesota market very well. They are excellent managers and are hands-on in all of their properties. But they needed assistance to find a lender willing to close a Minnesota hotel loan quickly. The reason: a 1031 exchange.

They contacted Senior Associate Ryan Dumas in order to complete the purchase of the land and the business at this suburban Minneapolis location.

Ryan worked with our team at top speed to get the loan out to lenders willing to close quickly. Ryan said, “These clients were really organized and ready to make this Minnesota hotel loan happen. We needed them to be extra responsive so we could utilize the 1031 money. It was a smooth closing, and they are owners of another property that will be very profitable under their management.”

1031 Exchange FAQS:

• What’s a 1031? A 1031 is a method by which you can use proceeds of the sale of one investment property for the purchase of another similar type of property. The 1031, however, has a time limit, but it does allow you to defer paying certain types of taxes, typically capital gains.

• Who Should Help Me? You need a competent escrow and title agent, who can handle multiple closings and who can keep the proceeds from the first sale in escrow. It’s very important that the proceeds from the first sale do not come into your pocket but go directly to this third party. We also advise all our clients to hire a knowledgeable attorney for all large transactions, this being no exception.

• How should I prepare? Be ready to provide all of the documents from “your side”. These would include your personal financial statement (which we will help you with). In addition, we’ll need information about other businesses you own (depending on your ownership percentage). Our loan processing team will give you updated checklists multiple times throughout the underwriting process, so we can accomplish what we need quickly.

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.

Tennessee Hotel Loan Closes: the New Normal

Perhaps your have heard the phrase: “The New Normal”. But what does it mean?

In the world of finance and loans, the new normal means the current economic climate. This new normal means that conditions can change. Therefore, borrowers and lenders have to be flexible and nimble. Finally, lenders have become somewhat conservative, which can affect the loan process.

Our clients worked closely with Senior Associate Ryan Dumas in order to refinance their Tennessee hotel. Like many hotel owners, they also had more than one mortgage, one of which was modified. In addition, they also had an EIDL (Economic Injury Disaster Loan) from the Small Business Administration. These components all had to be underwritten by the lender. The lenders needed to be reassured that the hotel was currently profitable and would continue to be. Our job was to provide the documents to support this.

Ryan admired the clients and remarked, “They really knew their hotel well and were super organized. Lenders have gotten a little bit picky recently, but this client was ready for all requests. They refinanced their two mortgages and are still paying off their very low interest EIDL. We closed efficiently and the borrowers were able to take a quick vacation to celebrate.”

New Normal FAQs:

• Be organized. If you are considering obtaining a loan for a purchase or a refinance, get your documents in order. Lenders will want to see P&L’s and balance sheets. In addition, some lenders are actually asking for monthly operating expenses particularly for 2021 to show how your business rebounded.

• Global Cash Flow is Key! Do you own multiple companies? Many business owners do. If you are seeking financing, you will have to submit significant financial information for companies that you own 20% or more of. In addition, the lender will want to see that you can afford your many businesses. They will look at all of your profits across all the companies as well as all your outstanding debt.

• Get your accountant on board! When it’s time to find financing, you’ll need a great accountant as a partner. You will need updated financials (even if you typically only receive these quarterly). Also make sure that the copies you have of your tax returns match what was actually filed and are not just drafts. (This has happened multiple times!!!)

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.

Georgia Hotel Turnaround: Expert Owner Now in Place

Our East Coast clients, experts in hotel turnaround, were ready for a new business venture. They had been looking at various areas and had been eyeing the I-75 corridor. They were particularly interested in a property that could easily become even more profitable.

These particular clients have become well-known and recognized for excellent customer service. Specifically, they have perfected the art of garnering good online reviews, parlaying this into increased occupancy and market share.

Our clients were familiar with GRP Capital, because they were sellers in a previous transaction. They quickly called Senior Associate Ryan Dumas to tell them about their business plans.

Ryan Dumas really appreciates the hard work and the special attention that these clients give to their hotels. Ryan said, “It was very easy to get a lender excited about this project, once they understood our clients’ strengths. We found them a lender who was willing to take on an undervalued property. The lender believes that the new buyers will be successful in creating a strong, profitable hotel.”

Special Considerations for a Hotel Turnaround:

• Strong Management Resume. If you are considering purchasing an underperforming business of any kind, be able to showcase your business plan. Refine your management resume so it emphasizes your management strengths. Work with our GRP Capital team to create a stronger business plan, which demonstrates how your ideas will translate to higher profit margins.

• Don’t be humble; brag! Be sure that the GRP team and the lenders know what you have done in the past to overcome challenges in owning and managing a business. How have you handled renovations or staffing issues? What about a less than stellar online review? Make sure you have a record of the benefits of the positive actions you took.

• Choose your new business carefully. No matter how strong you are as a manager, not every business can be saved. Let us evaluate a business with you, so we can be sure that there are not endemic issues that will be too difficult to overcome. Our business evaluation services are free.

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.

Colorado hotel loan; repeat client buys nearby property

We were happy to close a Colorado hotel loan for a repeat client of ours. This partnership group has found success in the Mountain states. They were eyeing a property not too far from a successful hotel that they previously purchased with a GRP-supported loan. In addition, they discovered that there was an absentee owner. Savvy business owners often target businesses held by out-of-town owners as potential purchases. Often, these properties can be extracted for more revenue. In this case, our clients will be able to manage this hotel along with their other hotel, pooling staff and using similar operating procedures.

GRP Capital Managing Director  Krishan Patel led our team to close this loan. Patel stated, “I know this client group well, as we have closed loans with them before. They are excellent business owners and managers and know the hospitality industry very well, particularly the Colorado hotel business. We supported them through the challenges of purchasing from an out-of-state owner. Now they are ready to have even greater market penetration with their two nearby properties.”

Things to remember when purchasing from Absentee Landlords:

• Who knows this business the best? Out of state (or country) business owners vary in their ownership style. Some really understand all of the properties in their portfolio. Others defer to their management team and know very little. If you are considering purchasing from an absentee landlord, determine if they know their business well and if not, get the contact number of the person who does.

•  Determine property condition Again, depending on the style of the owner, properties without ownership nearby can have deferred maintenance issues. Utilize the appraiser or even your own third party hires to determine the property condition. Be sure to include any needed renovation or upgrades in your loan package, especially if completing these would lead to greater revenue.

•  Get a solid understanding of the financials Even before potential lenders underwrite the loan, you should have a good sense of how the business is doing. What are its challenges and strengths? What kind of management is needed? Most importantly, will you be able to give the attention and oversight needed to make this business profitable?

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.

What’s in a Good Business Plan?

Many lenders require borrowers to create a business plan. A well-crafted business plan shows a borrower’s intentions. Crucially, this business plan is evidence that they are ready to take on debt to fund an existing or new enterprise.

Elements of a Strong Business Plan:

• Market Analysis: Lenders can be located all over the country. As a result, they may not know about the exact site of your business. They need to know about your business’ location and its strengths in addition to your position in your industry. What locally will drive people to your business? Who are your targeted customers? Who is your competition and what are your proposed advantages over them? Finally, are there market trends that support this enterprise?

• Detailed Plans for future Operations and Management: How is your business going to be structured? Most importantly, will this business be owner-managed or will you be hiring a management team? What experiences does your management team have in this industry? How will you handle hiring, training and supervision of employees? Who will be in charge of monitoring financials?

• Financial Projections: Creating a three year detailed financial projection can bolster a borrower’s case. Fortunately, GRP Capital is adept at helping to create, revise and analyze these documents in consultation with our clients. Financial projections need to include as many categories as you can think of. These categories include franchise fees if applicable, insurance, payroll, contract labor, daily operational costs and continued capital expenditures and renovations as needed.

• Strategies for Marketing: How will you get the word out there to your customers? Will you depend on a franchise for a marketing platform? Ultimately, do you have a plan to differentiate yourself from your competitors? Will you hire a marketing director? Who is responsible for monitoring online reviews and responding when possible?

• Possible Roadblocks: Try to imagine the scenarios that could be challenging. Specifically consider what are the risks in this business and in this location. How could you handle supply disruptions? Are there issues that could impact worker retention? If you are buying a business, what challenges did the sellers face and how would you handle these challenges if they recur?

Let GRP Capital Help You Craft a Strong Business Plan

Our GRP Capital team specializes in crafting financing solutions tailored to each client’s unique goals.

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.