Holiday Inn Express, Seaford, DE
Closed November 2011
MBA Capital Funding secured a loan for the buyer of the 81-key, newly renovated Holiday Inn Express in Seaford, DE. Although revenue was high and the hotel was beautiful, the sellers were losing money due to high debt and high expenses. These factors made the deal difficult to get financed. However, Capital Markets Advisor Lynda Drehmer still sought out a lender that saw the great potential of this 13-year-old hotel, and believed that the buyers’ strong hotel experience and long successful track record would quickly make it profitable. The purchase price was $3,800,000, with a SBA 7a loan of $3.1m, which included $200,000 for renovations, plus funds for franchise fees, working capital and closing costs. The buyers’ cash injection was $850,000, which was 20% of the total project cost, and the seller held $200,000. The interest rate was Prime plus 2.5%, variable quarterly, for a 25-year term. Because this loan was the largest SBA loan in Delaware for that year, the Delaware District SBA office issued a press release and held a press event at the hotel to promote the transaction.
“So glad the loan closed successfully, no doubt due to all the hard work you put into this file. You were a pleasure to work with and I do hope we have the opportunity to work together again soon.”
--Angela, Sr. Closing Officer for a national SBA 504 lender