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.
- EIDL hotel ,
- hospitality loan ,
- hotel loan ,
- hotel refinance ,
- Tennessee hotel ,