Jumbo Hotel Financing
hotel loan, Financing for hotels, motels, medical buildings, manufacturing, office buildings,warehouse, industrial, self storage
- 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.
Eligible Applicants - Small Business Loans Requirements
- 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.
Advantages of a SBA-504
- 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
Structure of Loan
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)
To qualify, the business must:
- 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