SBA HOTEL LOANS
SBA Hotel Loans are truly our specialty here at Alliance Business Capital. SBA Loans have accounted for 90% of the Hospitality Financing closed through Alliance in the last 11+ years.
We have provided SBA Loans for new hotel construction, and to purchase or refinance an existing hotel property. SBA Loans allow for property improvements, FF&E purchasing and in some cases working capital.
While we prefer flagged hotels, we can work with boutique hotels for experienced owner/operators.
Alliance offers both the SBA 7(a) and SBA 504 Loan Programs on Hospitality Properties Nationwide. For more information on these programs please see below.
SBA Loan Programs
This is our most popular loan program for financing hotel properties. We have a fast efficient process and can typically review a hotel financing request within 2 business days and have a term sheet to you within 2-3 business days. Our closing ratio on hotel loans when a term sheet is provided is second to none.
SBA 7(a) Loans are available through Alliance Business Capital from $350,000 to $5,000,000
Some Benefits of the SBA 7(a) Loan include:
- Longer repayment terms, up to 25 years on real estate
- Frees up cash to expand your business
- Low down payment of as little as 15% on Hotel Properties
- Construction Financing, PIP Financing, FF&E Financing are all eligible under the SBA 7(a) Loan Program
- Seller Financing is allowable as a 2nd Mortgage under certain conditions – would still require a minimum of 10% borrower injection
- Closing timeframe of 45- 60 days
| Maximum Loan Amount: | $5 Million with exceptions up to $6.5 Million |
| Minimum Loan Amount: | Typically $500,000 however will consider loans down to $350,000 on a case by case basis |
| Use of Proceeds: | Expansion, New Construction, Purchase Equipment or FF&E, Purchase a New Building and Land, Lease-hold Improvements, Working Capital, Refinance Debt (for compelling reasons) Purchase Inventory, Start a Business |
| Who Qualifies: | Must be a for profit business & meet SBA size standards, show good character, credit, management, and ability to repay. Must be an eligible type of business. |
| Prepayment Penalty: | Typically a 3 year prepayment penalty will apply |
| Terms: | Up to 25 years on Real Estate 5-10 Years on Working Capital, Machinery and Equipment Loans |
SBA 504 Loans available up to $15,000,000
Some Benefits of the 504 Loan include:
- Lower down payment than a Conventional Loan-typically 15 -20%
- Long repayment terms – reducing monthly payments
- Frees up cash flow to expand your business
- Many rate options including long term fixed rates
- Associated fees and soft costs may be financed in the loan
| Minimum Loan Amount: | Varies from Lender to Lender. Alliance has a $2 Million minimum on a 504 loan |
| Maximum Loan Amount: | $10 Million 1st Conventional with exceptions up to $20 Million $5 Million CDC/SBA |
| Use of Proceeds: | Long-term, fixed asset loans. Construction, New Purchase and Refinance (with compelling reason) |
| Loan Term: | Typically 10 - 20 Years |
| Who Qualifies: | For-profit businesses that do not exceed $15 Million in tangible net worth, and do not have an average two full fiscal net income over $5 Million . Must be a minimum of 51% owner occupied on existing properties or 60% on new construction. |
| Benefits to Borrower: | Lower down payment than a conventional loan, long term financing with no balloons |
We ask for a lot of items upfront so that we don’t have issues late in the loan process. In order to receive a term sheet we will need the following forms and documents on all shareholders, partners, owners.
- SBA Personal Financial Statement – must be completed in detail
- SBA Resume Form – need completed in detail with job descriptions etc.
- Loan Intake Form
- Credit Authorization – cost of credit is approximately $29 per individual depending on State tax
In addition to the above forms we will need the following documents:
- Most recent 3 full years of Business and Personal Tax Returns complete with all schedules including any W-2 and K1 Statements. We will need business returns on all businesses owned.
- Clear copy of Government issued ID
- Copy of last 2 months asset statements – need the complete statement including blank pages
- If a purchase we will need a copy of the purchase contract
- If a refinance we will need a copy of your existing note(s)
This is not a complete list and additional items will be needed in order to obtain a letter of interest or commitment letter. Once we review the above items an additional needs list of documents will be prepared and sent to you.
Questions or Comments
Alliance Business Capital understands the Hospitality Business and we understand SBA Loans. No one will work harder to get your hotel financing request approved. Give us a call today or Apply Online to get the process started. Thank you for the opportunity to work with you on your next hotel financing request.