Hospitality Loans
We are experts in hotel and motel loans, and hospitality financing of every size and variety and in some cases get up to 90% financing. The approval process for hotel, motel, and resort acquisition, renovation, construction and debt restructure includes:
Analysis of the property's operating income and expense statements, ADR, and occupancy rates.
Analysis of the market where the property operates.
Consideration of franchise versus independent status.
Borrower’s financial status, capital injection, collateral, credit history, and experience in hospitality ownership and operation.
Type of loan program applicable to the property and borrower.
Underwriting criteria for hotel loans have changed drastically over the last few years. Lenders are much more thorough and cautious now in analyzing all facets of the property’s current and historical cashflow, tax returns, demand generators, physical condition, competition, and other factors. Borrowers’ qualifications are also reviewed in detail, with strong emphasis on previous successful experience, cashflow of their affiliate businesses, post-closing liquidity, source of cash injection, and prior or current hotel ownership. Many lenders perform the majority of their underwriting tasks up-front, before they issue a commitment letter.
Hospitality Lenders also can vary in their parameters for property, such as age, exterior/interior corridor, flagged or independent, market area, required debt-service-coverage-ratio, etc. We know the property qualifications, underwriting requirements and loan parameters unique to numerous hospitality lenders and will match each financing project to the most appropriate one(s), presenting the deal simultaneously to multiple financing sources as applicable.
The loan application and underwriting process for hotel financing is daunting and time-consuming, and can be confusing or overwhelming to first-time buyers as well as seasoned hoteliers. We make the entire process go as quickly and smoothly as possible, right through to closing.