Hotel Motel Loans
Hotel loans, motel loans, and hospitality financing of every size and variety is our area of expertise for MBA Capital Funding Inc. The loan approval process for hotel, motel and resort acquisition, renovation, construction and debt restructure involves many aspects such as :
- Analysis of the property's operating income and expense statements, ADR and occupancy rates.
- Analysis of the market in which the property operates.
- Consideration of franchise or 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, etc. Borrowers’ qualifications are also reviewed in detail, with strong emphasis on the borrowers’ 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 now, 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. MBA Capital Funding knows 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 various 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. MBA Capital Funding can provide invaluable services to our clients to make the entire process go as quickly and smoothly as possible, right through until the loan closing is completed.
“I have worked with Lynda Drehmer on several difficult, complex 504 hotel loans. She is always a pleasure to work with, and very knowledgeable and efficient. Lynda goes above and beyond to do whatever it takes to resolve issues and potential roadblocks and get the deal to close. A real Super Star!”
--Tom, VP of a major Maryland CDC that processes SBA loans