How Does This Work?
First, call and speak with one of our licensed senior loan officers to begin the application process. We will conduct a quick phone interview to get a better understanding of your needs and quickly move to the application process.
Immediately following your application we begin the approval process. Our staff will work diligently to find the loan programs that best suit your needs and goals. We usually have an answer within 24 hours!
Once we’ve completed the approval process, you’re ready to fund your new loan. After you’ve completed signing the loan documents they will be returned to our funding department.
Hotel and Motel SBA Loans
What is a Flagged Hotel?
A Flagged Hotel means that it is a major hospitality brand such as Best Western, Hilton, Super 8 Motel, Comfort Inn, Days Inn, Holliday Inn , Ramada Inn, Quality Inn, Marriott, Radisson, We represent many lending sources including funding hotel loans for our own portfolio. You can have confidence that we at City Capital Realty will work with your best interests in mind.
Obtaining a hotel loan requires a profitable operating and occupancy history of the subject property. Getting a hotel loan for a new hotel is possible provided it has a well known flag, is well located, and has strong management and sponsorship. The best rates and terms available for hotel loans that are well cared for attractive, and have pleasing amenities. City Capital Realty would be glad to discuss all of the factors you want to be aware of in your planning for purchasing or refinancing hotel loan.
Hotel Loans and Hotel Financing are a Reflection of all the IndividuL Departments True Profitability
The financing of hotels all comes down to the consolidated operating statement of all the various departments of the hotel.
Each individual department will demonstrate their profitability by taking all revenue for that department, applying all allowable expenses; including cost of goods or services sold, yielding true net operating income for that department.
The property should be easily accessible and visible from the highway or major roadway .
Business-oriented hotels will provide ready access to downtown business areas, corporate parks and airports.
Vacation-oriented hotels will be highly visible from major roadways and be in close proximity to recreational amenities.
The hotel should exhibit sufficient parking capacity to adequately accommodate its range of services and location.
A stable historical operation is critical. A property with a history four or less years should be reviewed carefully before buying a hotel.
The hotel should have established an ongoing refurbishment program for both hard and soft goods.
Franchise affiliated hotels or Flagged hotels as they are known by are preferable, with franchise agreements extending beyond the term of the proposed loan.
Minimum acceptable occupancy (annualized for properties with seasonal fluctuations) is typically 60%; the average occupancy over the last 3 years should be at least 60%.
There are several loan and funding programs that have been used to finance hotels and motels, which can be structured with various interest rates and term options. Rates will be determined by the overall credit quality of the property and business, as well as the financial strength of the operator. Interest rates can be structured as variable, fixed or fixed to float. In the event that construction finance is requested lenders can structure an interest-only loan during the hotel construction period. The term and amortization is often structured anywhere between five and twenty-five years, depending on the assets being financed with the loan. Financing for hard assets such as the hotel property’s real estate generally receive terms between fifteen and twenty-five years, while a loan for working capital and inventory could have a term of five to ten years.
City Capital Realty offers mortgage financing for real estate under the government’s SBA loan program. These SBA loan programs can be used for properties which have greater than 50 percent owner occupancy, or are owner-managed such as a motel. SBA loans can be highly advantageous, and City Capital Realty has the resources required to guide you through this process.
Our SBA loan financing allows for both purchase and refinance capital, and can provide a range of flexible options to support future working capital needs.
- With %15 Down payment you can purchase franchise a hotel
- Up to $11,000,000
- Owner Occupied
- Nationwide Funding
The SBA 504 loan is a popular method of financing the acquisition or construction of hotels around the country. It requires as little as 15 percent borrower equity, provides up to a 20 year fixed interest rate, and insulates the primary lender from virtually all credit risk. Following is a general description of the program, its benefits and requirements, and how you can apply for a 504 loan.
Flagged or Unflagged (Independent). Although the flagged motels are usually easier to finance, however, there is financing for unflagged motels as well.
- Business must meet SBA size standard for small business.
- Business must be for profit, show good character, credit, management, and ability to repay.
- Borrower must occupy at least 51% of real estate purchased or refinanced.
- Borrower must be legal alien / U.S. citizen.
- If start up or acquisition, borrower will be required to contribute at least 10% of the start up capital
If buying your own building is desirable, one of the SBA’s flagship programs called the SBA-504 loan can help you achieve your goal. CDC is provider of SBA-504 loans. Our loans are designed to help small businesses buy, construct or improve commercial and industrial buildings as well as buy and install heavy machinery and equipment.
- Long-term, fixed rate. 504 loans have a 20-year fixed rate term on real estate and a 10-year fixed rate term for equipment
- Below-market interest rates
- Low down payment retains capital in the business. Conventional bank loans require a 35% down payment. The SBA-504 Loan has a down payment minimum of 10% – allowing your business to retain the additional 10% for working capital
- (Down payment is 15% for start up businesses)
- No balloon payments
- The 504 loan is government guaranteed. Therefore, the collateral required is normally the property being purchased; no additional collateral needed.
- Closing costs such as appraisal fee, environmental fees, contingency fees can be included in the financing
- Projected income consideration – CDC can consider projected income of a business in addition to historical cash flows. This is particularly advantageous for growing businesses
A SBA-504 loan has three participants:
- Bank – provides a first trust deed loan for at least 50% of the total project cost.
- CDC – provides SBA-guaranteed 504 loan for up to 40% of the total project cost, or a maximum of $5 million ($5.5 million for manufacturing businesses and “green” buildings)
- Small Business Owner – contributes a down payment of at least 10% (15% for start-up businesses or single purpose properties)
- Be organized for-profit
- Be organized as a sole proprietorship, corporation, partnership or limited-liability corporation (LLC)
- Have tangible net worth no greater than $15 million and average net profit after taxes below $5 million in the last two operating year
Why Choose Us?
We offer hard money loans with minimal documentation. If you have at least 20% down for a purchase, or 30% equity for a refinance, we can get your loan approved. Westpark Loans does loans the others can’t!
City Capital Realty has been in business for over 20 years. We have funded over $100 million in loans, and have relationships with hundreds of lenders and investors. This gives us the ability to say YES and fund your loan quickly at the lowest rate possible
- We can close your loan in as little as 72 hours!
- Guaranteed lowest rates!
- Over 20 years of experience.
- Evening and weekend appointments