Tag Archives: SBA

The Government Shutdown and Your Loans

The government is currently “shutdown”. How does this affect your current and future loans?

Current loans and the government shutdown:

  • If you have current loans with government agencies like the Small Business Administration, the SBA is still servicing these loans.
  • You can continue to make payments and can even make some changes (like in ownership). But you cannot modify any loan amounts at this time.
  • Please be sure that you continue to keep your EIDL loan current, even during the shutdown, as this affects your ability to seek future financing. You can use this link to confirm your EIDL status: Check here

Trying to Get a New Loan during the Government Shutdown?

  • If you are in the middle of an SBA loan application and your lender pulled the PLP number, your loan should not be delayed. The PLP number is an SBA-specific loan number and provides pre-approval status.
  • If you don’t yet have this pre-approval, your loan will be paused.
  • However, your lender will continue to underwrite your loan. You should continue to submit all requested documents so you are making progress.
  • But the SBA will not underwrite or approve new loans during the government shutdown.
  • If you are seeking financing because of a maturing note, we urge you to contact your current lender. Explain that you may need an extension because of the shutdown, which is beyond your control.
  • If you do obtain an extension, be realistic and patient. Even when the government shutdown ends, approvals will not begin immediately. There will be a backlog of work. Allow for a longer approval process.

GRP President Rick Patel and Managing Director Krishan Patel both have worked through government shutdowns before. They know that they can be frustrating, but with patience and planning, loans cans still close, even if slightly delayed. GRP Capital can help you as you negotiate with current lenders, satisfy sellers and guide you through the process.

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.
Loan calculation

Check Your EIDL Status: Your Future Loans May Depend on It!

What is your EIDL Status?

During the onset of the COVID pandemic, many business owners took advantage of low cost loans offered by the Small Business Administration (SBA), called Economic Injury Disaster Loans or EIDL. These were long term loans at a very low interest rate, intended to keep businesses operating.

If you have an EIDL on the books, it is critical that you are making the regular monthly payments. Even more critical is that every person who is even a partial owner in a business with an EIDL must confirm that their loan is current. You can use this link to confirm your EIDL status: Check here

GRP President Rick Patel and Managing Director Krishan Patel both have worked closely with clients whose EIDL status was not current.

Rick mentions, “There is almost nothing that is more detrimental to future loan eligibility than having an EIDL that is not current.”

Krishan states that responsible business people “must be proactive and check on any EIDL that has their name attached” before seeking out future financing.

What to Know and Do about your EIDL Status

  • Make sure you keep a current list of every business that you own (fully or partially) in which you received an EIDL.
  • The SBA portal can be utilized to check on the status of each EIDL loan. However, if there have been multiple partners or owners of a business that sought out a loan, you need to determine who set up the portal and the login information (user ID and password).
  • Within the SBA portal, you can see if the loan is current or not.
  • If your EIDL status is not current and shows either a default or even worse a charged off status, you must address this right away.
  • You cannot obtain future SBA loans (including 7(a) and 504) if your EIDL status is anything but current.
  • Please allow sufficient time to repair your EIDL status. First, find out the amount needed to get your loan current. Then continually communicate with the SBA to ensure that the portal status changes.
  • The SBA portal allows you to download EIDL documents, which might be requested by lenders, particularly the loan agreement.

Best business practice tip: Maintain Business Debt Schedules

  • Maintain a business debt schedule for every business you own (even if you are even a partial owner).
  • Each business debt schedule should list every loan for this business, the monthly payment, the date of the loan and when it will mature, the interest rate, the original loan amount and the current balance.
  • For real estate mortgages, also include the original cost to purchase the property and the current market value (your best estimate).

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.
Beach seen through a drop of water

Complex South Florida Hotel Loan Closed

Our client partnership group needed a Florida hotel loan. They were ready to purchase an underperforming hotel in South Florida. The hotel showed potential for growth, particularly with our partners’ plans to be hands-on right away. Currently, the hotel was owned by remote partners.

Krishan Patel, Managing Director of GRP Capital stated, “This partnership group consisted of a management team who were ready to enter the Florida market for the first time. The Florida hotel loan marketplace is complex and the lender pool has narrowed. We were able to secure competitive financing, requiring strategic structuring of the partnership. Our guidance was key to ensuring there was SBA eligibility, which is often critical in Florida hotel loans, especially in the mid-scale and economy sectors.”

The entire GRP Capital team worked together on all of the components of this loan. We even made sure one of the partners was able to sign his documents, while traveling on a ship!

Florida Hotel Loan FAQ’s:

• What should I do about insurance while I’m looking for financing? If you’re refinancing, just inform your agent that you’ll need updated insurance certificates. If you are purchasing a new property, start getting insurance quotes ASAP, especially if a lender is requiring flood and/or wind coverage. These extra coverages can take more time to procure. If you don’t have an agent, you can ask the seller if they are satisfied with their insurance agent. That person knows the property already. We also keep an updated list of trusted agents in our database.

• How come my own local bank won’t just loan me the money? This happens a lot! Different lenders have different interests for a variety of loans! We know our lender network well. That means we know who is interested in hospitality loans and who is not. That saves you time and money.

• Why should I consider an SBA loan?:  Small Business Administration (SBA) loans are often the best matches for certain hotel properties. The SBA is willing to guarantee a larger variety of hospitality loans, including economy and mid-scale properties.

• What about Hotel Statistics? The Florida marketplace is diverse with certain areas performing better than others. Accurate hotel statistics, through STR reports, financials and occupancy tax records are critical. These documents provide the fullest picture of the hotel’s revenue. As a result, the lender can feel more comfortable in underwriting and approving the loan.

Why Choose GRP Capital?

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.

Santa Rosa New Mexico downtown

New Mexico Return Clients Close Loan

Our GRP Capital Team has closed a fourth hotel loan for a treasured group of return clients.

These return clients were ready to purchase another New Mexico hotel. They had tried to source financing on their own, but came to us when they were dissatisfied with the results. Our team was able to work with a Community Development Corporation (CDC). This CDC was crucial in obtaining an SBA 504 loan. The terms of the loan were better than the terms from the various banks that the different partners had been trying to obtain in the marketplace.

GRP Capital Managing Director Krishan Patel led the team in sourcing and closing the loan. Our work benefited the borrowing group, whom we know well. This borrowing group had many partners, so sometimes that creates a cumbersome document collection process. GRP Capital’s involvement definitely saved the clients time and money. In addition, the team was able to step in to make last minute plans when one of the partners had to leave the country unexpectedly and needed to sign early and remotely.

Benefits to Return Clients:

• We Know You: Return clients’ files are archived in our systems. We know about your other businesses and retain documents that can be provided for new lenders, if appropriate.

•You Know Us: We think we are pretty easy to get to know. However, we recognize that clients have to learn who we are and the GRP Capital Way. The learning curve is very smooth and future transactions are even smoother.

• We Know Which Lenders Will Appreciate Your Business Vision: When we’ve already closed a loan for you, we have also learned about you and your businesses. We know what aspects of your business need explaining and we also know about the strengths of the owners and managers. With this knowledge in our back pocket, it is easier for us to source appropriate lenders, who will want to loan money to our return clients.

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.

Helen Georgia hiking trail mountains

New Georgia Hotel Loan

Senior Associate Ryan Dumas has helped his client close a Georgia hotel loan, using the SBA 7a program. The loan has fixed rates, which were very competitive in today’s marketplace.

Our Georgia hotel client was ready to take on a new business. To be sure, she has a great deal of experience in hospitality ownership and management. Therefore, this Georgia hotel loan was important to her and her family.

Ryan and our in-house underwriting and credit analysis team recommended an SBA 7a loan for a number of reasons. Firstly, the loan fit many of the 7a parameters. In addition, lenders are more willing to make hospitality loans when they come with an SBA guaranty.

Ryan was very pleased with the process. He stated, “We really are the leaders in the marketplace in closing SBA 7a loans. Our GRP team knows which lenders are interested in lending for hotels (not all banks are). This saves our clients a lot of time, not to mention money. I’m pleased to be part of the solution for these wonderful clients.” As for our client, she is busy working on improving the operations of her new hotel and said in an email, “Thank you for all your help obtaining the property. You were all great!”

Basic SBA 7a Information:

• What can a SBA 7a Loan used for? Limited to $5,000,000, borrowers can use this type of loan for purchases of businesses including equipment, renovation/construction and refinancing, too. Borrowers can even take out an SBA 7a loan for changes of ownership.

•How does an SBA 7a differ from an SBA 504? In order to apply for an SBA 504 loan, borrowers must work with both a CDC (Community Development Corporation) and a senior lender. The CDC has to officially submit the loan to the SBA for approval. In addition, the CDC also approves the lender. Typically the CDC and the lender each have their own underwriting processes, which happen simultaneously. These extra steps typically lead to a lengthier closing. GRP Capital advises 504 loans when borrowers have sufficient time in their purchase sale agreement and for larger loans, too.

• Why do lenders like SBA loans? It’s all about risk! Lenders are by nature risk-averse. The SBA guarantees the majority of the SBA loan, which removes a great deal of the risk from the lender. So it’s a win-win for them. They get to have a loan on their books without the full amount of the risk they incur with conventional loans. GRP Capital is continuing to dialogue with our network of lenders. We think it’s important that lenders understand the many stable, profitable hospitality businesses that are out there.

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.

Graphic of electric vehicle charging station

New Spending Bill and Electric Vehicles

Electric Vehicles are in the news right now. The new spending bill that just passed through Congress affects the purchase of these vehicles and charging stations. In addition, the bill may have an impact on your future business decisions.

How can electric vehicle charging stations benefit you? What legislative decisions will also affect you?

Electric Vehicles (EV) and the New Spending Bill:

• Expiration of Tax Credit for EV Purchases : Currently, individuals who purchase an electric vehicle receive a $7,500 tax credit for new vehicles and a $4,000 tax credit for used vehicles. These tax credits will expire on September 30, 2025.

• Possible Effects of Expiration: EV owners are loyal and largely happy with their purchases. There is likely to be a surge of demand and purchases of EV’s up to the expiration date. There may also be interest and inquiries regarding nearby charging stations.

• Electric Vehicle Charging Stations: There was also a tax credit through the Alternative Fuel Vehicle Refueling Property Tax Credit. This tax credit, limited to $100,000, offered incentives to businesses that installed charging stations. Many business owners took advantage of this credit. This included gas station and convenience store owners, retail and commercial office space owners, multi-family housing owners and hospitality owners.

• When is the EV Charging Station tax credit expiring? This tax credit is due to expire on June 30, 2026.

• Should I Install an EV Charging Station? Our lenders are aware that business owners may be keen to take on this business upgrade with some urgency. In addition, if you are in the market to purchase or refinance commercial real estate, you may want to include a charging station installation in your business plan. While it is difficult to predict the cost-benefit of a charging station, it is certainly advantageous to install the station before the tax credit expires. t

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.

Meeting from above

SBA Launches Working Capital Loan

The Small Business Administration has just announced a brand new working capital loan program. This program will be administered as a 7a loan. Although the SBA has not announced a start date, the official launch of the loan could occur as early as third quarter 2024.

The name of the pilot program is the Working Capital Pilot Program (WCP). The goal is to provide lines of credit to small business owners. The SBA particularly wanted to create this financing option during the current extended high rate environment.

According to the SBA’s press release, “This pilot program represents a significant expansion of the SBA’s loan programs by adding a line of credit product with an innovative fee structure engineered to increase flexibility for small businesses and lenders, providing more options when structuring a line of credit to meet businesses’ specific needs.”

What we Know about the Working Capital Loan Program:

• Competitive Rates for a Line of Credit: This loan can be utilized for short-term capital injections. As a result, the loan should help increase profitability or jump start a new aspect of a business. The shorter team loans and flexible designs should be enticing to many entrepreneurs.

• Flexibility: The WCP offers greater flexibility than other SBA 7a offerings in terms of maturity date and loan terms.

• Asset Based Financing : The WCP will offer a line of credit, based upon the assets of the small business. This should enable business owners to manage cash flow and to also deal with any snags in supply chains.

• More guidelines are forthcoming: The SBA is offering one-on-one consulting to lenders to help educate their personnel first about the advantages and details of the WCP. GRP Capital expects to be able to recommend these loans after a short study period with our lending partners.

• Using Valued Lender Partners: In order to access this working capital loan, we will need to engage with experienced lenders in the SBA marketplace. These lenders are already in contact with our GRP Capital team. Together we are determining the best usage of this new financing option.

• Annual Guaranty The loan will include an upfront SBA guaranty. Borrowers can pay this guaranty annually.

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 Hotel Closes with SBA 504

Our Florida client was able to purchase a new Gulf Coast hotel, taking advantage of an SBA 504 loan.

As experienced multi-family owners, our clients had their eyes on a South Florida property.

However, the lending space has changed recently for hospitality loans. Consequently, lenders and borrowers are interested in the guaranty that the SBA loans provide. The benefit of an SBA 504 loan is that it is fixed interest and competitively priced.

GRP Capital President Rick Patel and the whole team worked closely on this loan. He noted, “The SBA 504 loan process is a little more rigorous. Sometimes this can scare clients. But our team worked closely with all of the various personnel to get this loan closed. I want everybody to consider SBA financing when it is appropriate. We know we have the systems in place to make the detailed underwriting much easier for our clients so they can take advantage of the SBA products.”

Fast FAQ’s on SBA 504 loans:

• What’s a CDC? A CDC is a Certified Development Company. These are community-based partners who underwrite the loan and create the package. They are the first step in getting a loan closed. Most importantly, they know their way around the SBA and the best paths to secure SBA approval.

• Tell me the difference between the SBA 504 and the SBA 7a: The 7a loan is typically (although not always) for smaller loans and for businesses that might have more trouble obtaining conventional financing. Currently SBA 504 loans hold fixed rate loan structures, while many SBA 7a loans are structured with a variable rate. Both loan products can be used for purchases and construction, while 504 loans may have restrictions regarding refinanced debt.

• Is the equity requirement affordable in an SBA 504 loan? Typically, yes, but every project is different. In the case of this closing, the equity contribution met the budgetary needs of the 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. 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.

Options For a Maturing Note

If you have a maturing note, you have the following options:

  • Pay off the remainder of the loan
  • Extend the loan
  • Renew the loan
  • Secure new financing

Choosing the Best Option for your Maturing Note:

• Paying off a maturing note: If you have had a conventional or even SBA mortgage which has been paying down your debt over a long number of years, making your final payment might not be too cumbersome. Do you have a bridge loan or a construction loan? If this is the case, full payoff may not be feasible. Be aware that you will no longer have tax credits for mortgage interest, which will change your taxable income.

• Extending the Loan: This option allows you to get some extra time before making that final payment. Extension is most common when facing balloon payments. Your lender must agree to an extension; in fact, this is not automatically granted. There will likely be some additional interest charges should you choose this option.

• Loan Renewal:  Have you had a good relationship with your lender? Were your payments on time for the most part (with perhaps some pauses during COVID 19 lockdowns)? Your lender MAY be amenable to creating a new loan. This will allow you to continue to pay down debt, reducing your taxable income, while staying with a familiar lending partner. Unfortunately, there are certain industries that are coming up against lender hesitancy to renew loans, including hospitality loans.

Securing a New Loan:  If you cannot go back to your current lender, you must secure new financing. Because of higher interest rates, this is the time to seek advice and figure out the best options.

GRP Capital can be of assistance. We will examine restructuring and reach out to lenders to determine what financing options are likely to be approved. Our team will consider if you should refinance existing debt, retire part of it or even restructure it. In addition, we can help evaluate your financing and cash flow needs. You will have a better sense of what type of financing options exist and choose the best one for your business.

If you would like to discuss your maturing note or any other business issues, feel free to contact our team.  An initial business evaluation is complimentary.

Is It Time to Refinance Your SBA 7a Loan?

Do you have a Small Business Administration SBA 7a loan that is at least three years old?

Have you been meeting your business plan goals and objectives?

Now is a good time to examine what the options are for refinancing your SBA 7a loan.

Timing an SBA 7a Refinance

• Three years: SBA 7a loans have prepayment penalties for the first three years. Therefore, we advise most borrowers to wait until the three years have elapsed before seeking refinances. There are a few select cases, however, where the prepayment penalties are worth it.

• Do you have evidence of meeting profit targets? If you are looking to refinance a loan, lenders need evidence that your business is largely on target. We find that lenders are willing to overlook the market disruptions of COVID, especially during mandatory lockdowns. Other than that, your financial statements should demonstrate sustained profitability. In addition to financial statements, lenders and appraisers typically require evidence from third parties. These can include STR reports or sales tax bills based upon revenue receipts.

• Debt Coverage:  The most important factor in finding affordable, reasonable loans is your current debt coverage. Lenders are not impressed just with the value of your property. In this somewhat volatile economic milieu, demonstrating the ability to pay back loans and having capital reserves is key.

Debt Refinance Possibilities and Other Structures:  We can help you determine the best next steps. It might be to refinance existing debt, retire part of it or even restructure it. We can help evaluate your financing and cash flow needs. You will have a better sense of what type of financing options exist and choose the best one for your business.

If you would like to discuss your SBA 7a loan or any other business plans, feel free to contact our team.  We can conduct a business evaluation, reach out to our lenders, offer advice on bidding and secure financing for you. An initial business evaluation is complimentary.