This is a question that we hear all too often at HBC Lending. This really is a “loaded” question, however, for the most part SBA will allow as low as 15%. In reality, SBA 7(a) loans are primarily based upon Loan-To-Value (“LTV”) and are not based upon the percentage of down payment. Many potential clients come to us with the expectation of a 20% down payment. However, it really is more complicated then that. (more…)
The SBA only allows $5,000,000 in total SBA loans to each individual borrower. The SBA will only count loan dollars against this total availability of $5,000,000 if you personally guaranty the loan. The SBA only requires that an individual personally guaranty the loan if they own at least 20% or more of the new business. These three simple facts go a long way when getting your next loan approved and your ability to get future SBA loans and buy additional hotel properties. (more…)
It has come to my attention in conversations with clients over the years that several borrowers are confused by how much the SBA and bank require as injection from each partner in a partnership when purchasing a property. Several clients that I have spoken with over the years believe that each partner in a partnership must inject a percentage of the total required down payment that is equal to their percentage of ownership in the new business.
The appraisal is one of the most crucial elements in a loan closing. They truly can make or break a deal. This is why having a well qualified hotel appraiser assessing the value of the hotel your are purchasing or refinancing is extremely important. The bank’s we work with have been in existence for quite some time and have built up a long list of highly reputable hotel appraisers on their bank approved appraiser list. They use very experienced hotel appraisers on all of our deals, which is critical to getting an accurate and true valuation of your hotel property and most importantly closing your deal without problems. (more…)
Down payment documentation has become a hot button of focus for the SBA and subsequently banks. The SBA requires that the bank collect at minimum 3 months most recent bank/brokerage statements from all accounts that will be the source of down payment for the loan PRIOR to approval. The SBA’s main concern is that the funds are the buyer’s and are not borrowed funds. (more…)
