29 Sep Financing Hotels in Today’s Market
If you’re a hotel investor reading this, you already know that a vast predominance of banks simply won’t lend to the hospitality industry, no matter how aggressive the market study or financial strength of the borrower. And if you do find a lending institution willing to take on that loan, the equity required can often be more than 35%. Navigating through the process is time-consuming and quite frequently, deflating.
HiFive has been successful in helping its hotel customers obtain financing by observing a few simple rules:
Over the years, HiFive has built relationships with specific individuals at lending institutions who have both the interest in making hospitality loans and the authority to do it.
In most cases, at the request of the investor, we “package” his/her financials in the specific manner requested by the lender. This simple step streamlines the process of initial approval by the underwriter or loan committee. In these cases, HiFive will execute a “non-disclosure agreement” with the investor to protect his/her interest.
As the only hotel developer in the region with a complete “in-house” architecture firm, we provide drawings and specifications within requests for financing so that lenders’ appraisers can evaluate the proposed improvements. In most cases, we keep the cost of those initial drawings very low or simply defer the cost until financing is approved.
In a recent case, HiFive presented a particular financing package to 29 banks, all of whom declined to consider the loan. But the 30th bank, a small agricultural bank in Central Ohio, was eager to make the loan… and did. That hotel had its grand opening a few weeks ago and is already cash-flowing for its owner.LEARN MORE AT HOTEL-CONTRACTOR.COM