At HBC, we only work with banks that are willing to provide the financing necessary for our clients to complete the franchise necessitated Property Improvement Plan (PIP) on a franchise property purchase.  Commonly, when a buyer is purchasing a new property the buyer is merely working off of estimates provided to them by the agent and seller on what the PIP cost will be on the property.  However, the formal PIP inspection is not done by the franchiser until after the new buyer has applied to the franchise for approval. (more…)

We at HBC only work with banks that will provide our clients with Working Capital as a part of the SBA loan proceeds. Why is this important? Working capital is very important as it is the “start up” capital you will need for your business right after you close on the purchase of your hotel. Working capital can assist in covering immediate operating expenses of the business such as salaries or hotel supplies. Also, it can also be used for an advertising “blitz” to increase business at the hotel. How can Working Capital effectively lower my actual down payment on the loan? (more…)

Last week we celebrated ‘National  Small Business Week’ which is an annual celebration of over 28 million small businesses in the United States. For almost 60 years the Small Business Administration (SBA) has been helping small businesses get their start by offering a wide range of services. From roots that date back to the 1930’s, the SBA’s focus has been to make sure that small businesses can participate and stay competitive in the marketplace. (more…)

The most prominent concern for most of our clients is to have a low down payment. Fortunately, SBA financing can be very lenient on down payment requirements when compared to conventional financing. SBA technically will require a 15% equity position on a hotel deal. Most buyers believe that the only way to accomplish this 15% equity position is by putting 15% down payment. However, there are other methods to get to 15% equity position that the bank requires.
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This is a famous quote from Wealth of Nations written by Adam Smith in 1776. The meaning behind this quote was mainly to define the theory that drives capitalism, however, it can be applied in many different aspects of business. At HBC, we work with several clients every year that are involved in a 1031 Exchange. A 1031 exchange allows a real estate investor to defer capital gain taxes on the sale of a property by allowing the individual (aka “Exchanger”) to reinvest that money earned from the sale of a property as a down payment towards the purchase of a new property. Many people we speak with are not clear on the rules of a 1031 Exchanges. (more…)