Hotel Loan Refinancing

Case Summary

Hotel Financing – The client is a limited liability corporation chartered under the laws of the state of Florida and registered to do business in Louisiana. They needed refinancing of a high rate term loan.

 

Background

The corporation was formed in July of 2003 for the sole purpose of constructing and operating its new hotel in Louisiana. The hotel that the client owns was itself chartered under the laws of the state of Florida and registered to do business in Louisiana. The corporation was formed in July of 2003 for the sole purpose of constructing and operating the new hotel in Louisiana.

Construction of the hotel was completed and the hotel opened for business in November of 2004.  The property consists of a 200-room hotel with a 24-hour business center and recreational amenities (indoor pool and a fitness facility), as well as a conference center with banquet facilities and a ballroom.

Loan Approval Factors

  • The facility was originally financed via a combination of traditional bank financing and private financing.
  • The original financing obtained was at a very high rate.
  • Having now completed four full years of operations, the client sought to restructure debts to obtain more favorable rate and terms.
  • Recognizing the specialized nature of the proposed financing, client was seeking a sponsoring lender for a $8M loan through the USDA’s Business and Industry Guaranteed Loan Program.
  • Prior to the construction of this hotel, the management contractor completed a market study that supported completion of the project.

The Problem

The client had a five-year loan hotel financing it needed refinanced with a longer term.

Our Solution

We got them approved with a 20-year amortization with a lower interest rate via a USDA bank, by handling the due diligence end and by using our large finance network.

The End Result

As a result of the improved hotel financing terms:

  • the loan payback timeline was extended 4 times the original payback duration,
  • the client saved heavily on interest,
  • was given lowered minimum payments,  and
  • the client got to put that saved interest back into their monthly business cash flow, where it was needed most for growth and day-to-day operation.

If your situation is similar, contact us today see if we can do the same for you.