This loan was an SBA 7a purchase of a Days Inn property in TX. The challenge on this loan was that the buyer was a first-time buyer who had limited hotel management experience (Less than 2 years). The other challenge on the loan was documenting the buyer’s down payment proceeds. The SBA has greatly increased the degree of documentation that the bank must collect from the buyer in regards to documented their source of down payment funds. Per the SBA Loan Rules and Regulations Manual known as the SBA SOP 50-10 (Page 167),”….Lenders are expected to use reasonable and prudent efforts to verify that equity is injected and used as intended and failure to do so may warrant a repair or partial/full denial..” The banks are required to gather all pages of the buyer’s 2 most recent bank statements PRIOR to approval. The funds which are eligible to be used as injection must be in the bank account for at least 60 days BEFORE the approval. However, to be safe, most banks’ now collect 3 months most recent bank statements. This can be an extensive process but in the end we were able to work directly with the buyer and the local deposit bank to gather all of the necessary documentation to fully document the buyer’s injection proceeds.

Client Comments:

“Working with Shawn was a great experience. The service he provided was friendly, professional, and very transparent. I really appreciated his taking the time to listen to all of my questions, concerns, and comments. As a first time buyer, he taught me a lot. Thank you for all of your help. I would definitely refer Shawn to anyone who is looking for a hotel loan.”

Ravi Patel – Hotel Owner