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Alliance Business Capital appreciates the opportunity to assist you with your current Hotel Financing needs. We work with borrowers Nationwide as well as International borrowers on a case-by-case basis.

Our primary loan program is an SBA Loan Program which makes up about 90% of all of the Hospitality Financing we have closed in the last 7 to 8 years. SBA Loans allow for a longer term and greater leverage than a typical Conventional Loan. We are however, proud to assist you with any of the Hotel Loans Programs listed below. 

HOTEL LOAN PROGAMS OVERVIEW

SBA Hotel Financing

 

 

 

The SBA 7(a) Loan Program is our most popular loan program for financing hotels. SBA 7(a) Loans are available through Alliance Business Capital from $350,001 to $5,000,000.

Some Benefits of the SBA 7(a) Loan include:

  • Long repayment terms – reducing monthly payments
  • Frees up cash to expand your business
  • Low down payment of as little as 10% on multi-purpose real estate acquisitions and as little as 15% on single-purpose real estate acquisitions
  • Financing available for most industry types including: hotel/motels, gas station/convenience stores, restaurants, assisted living facilities, and day cares
Purpose:Working capital, refinance, business acquisition, R/E purchase/construction, purchase equipment or inventory
Loan Amounts:$350,001 to $5,000,000
Collateral:Commercial R/E, inventory, FF&E (furniture, fixtures, and equipment)
Term:Varies, up to 25 years
Rate:Fixed or variable rate
Eligibility:Owner-operated and for-profit
Loan to Value:Varies, up to 85% on Hotel Properties

SBA Hotel Financing

 

 

 

SBA 504 Loans are available through Alliance up to $15,000,000

Some Benefits of the 504 Loan include:

  • Low down payment of only 10% (20% on hospitality properties)
  • 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
Purpose:R/E purchase/construction, purchase long-term machinery or equipment
Loan Amounts:Up to $15 Million
Collateral:Commercial R/E, equipment, machinery
Term:Varies, up to 25 years
Rate:Fixed or variable rate
Eligibility:Owner-operated and for-profit
Loan to Value:Varies, up to 80% on hotel properties

USDA B&I Loans

Alliance Business Capital can assist on USDA B&I Loans up to $10,000,000 Acceptable Use of Proceeds on a USDA B&I Loan:

  • B&I Loans may involve acquisitions, construction, conversion, repair, modernization or debt refinance
  • Loan proceeds can be used for real estate acquisition and/or improvements, machinery, equipment, furniture, fixtures and working capital
  • Closing costs and guarantee fees are also eligible
Purpose:Working capital, refinance, business acquisition, R/E purchase/construction, purchase equipment or inventory
Loan Amounts:$500,000 to $10,000,000
Collateral:Commercial R/E, inventory, FF&E (furniture, fixtures, and equipment)
Term:Up to 30 years
Rate:Fixed or variable rate
Eligibility:Owner-operated businesses with facilities located in rural areas
LTV:Varies, up to 80% on hotel properties

Hotel Construction Loans

Alliance has access to Hotel Construction Capital under the following Loan Programs:

SBA Construction Loans

SBA Hotel Financing

Alliance now offers both the SBA 7(a) Loan (information below) and the SBA 504 Loan which allows for Construction Loans up to $15 Million (must be a good flag and the owners must have plenty of hospitality ownership experience with good liquidity).

Commercial-Loan-Form-small

SBA 504 Construction Loan Flyer

Click here for more information on the SBA 504 Loan Construction Loan.

Basic Criteria on SBA 7(a) Loan:

  • Maximum Loan Amount is $5 Million
  • Maximum Loan to Value is 75% – typically you must have a minimum 30% verifiable capital injection into the project
  • Must be able to qualify for SBA 7(a) Loan
  • Must be a Strong Flag
  • Must have outside income from other properties
  • Must have SBA full eligibility – no open SBA Loans
  • Must have good liquidity
  • Must have good experience as owner/operator

Typical Loan Fees:

  • 1 to 1.5% Construction Loan Fee – paid to Bank
  • SBA Guaranty Fees Apply
  • Third Party Reports
  • Alliance Processing Fee – typically $2500

Other Criteria:

  • Bank must approve Contractor
  • Contractor must have a Payment and Performance Bond for the Project
  • Additional conditions may apply upon Bank reviewing complete package

Conventional Construction Loans

Alliance can now assist on Conventional Construction Loans that meet the below criteria.

Important Notice This program is for experienced Hotel Developers. 

Eligible Locations:United States
Security:First mortgage lien on the subject property, and pledge of ownership interests.
Loan Sizes:$15 Million Minimum
$75 Million Maximum - larger loans on a case by case basis
Loan to Cost:75% Maximum
Not all deals will qualify for maximum financing
Recourse:Non-recourse (subject to underwriting), with standard carve out guarantees and completion guarantees on construction loans.
Closing Timeframe: 4 to 8 weeks from application and lender deposit remittance.
Interest Rate:Libor-based floating rate typically between L +7.50% and L +8.75%
Debt Service:Interest only during the primary term.
Loan Term:36 month primary term; with up two 12-month extensions.
Origination Fee(s):Alliance - 1-2% of loan amount
Lender - 2% of loan amount
Exit Fee:1% to 2% of loan amount
Prepayment Penalty:12 to 18-months post certificate of occupancy.
Reserves/Escrows:Real estate taxes, insurance, replacement reserves, and mortgage interest (as may be required).
Underwriting:Emphasis on equity capital funded in connection with loan, asset quality, value creation business plan, market analysis, and sponsorship.
Expense Deposit:$35,000, payable upon acceptance of Loan Application to cover 3rd party reports and out of pocket closing costs. Any remainder credited back to borrower at loan closing, or refunded in the event the subject loan application is not approved by lender.
Third Party Reports: MAI Appraisal, and Phase I environmental, and other reports as may be relevant and / or required by lender(feasibility, property condition etc.).

Life Company Loans

Alliance Business Capital now has a new Hotel Loan Program underwritten by a Life Company. Please see below for basic guidelines/information:

Territory:
Nationwide

Minimum Loan Amount:
$40,000,000

Maximum Loan Amount:
$400,000,000

Terms:
Prefer a minimum loan term of 7 years, longer terms available

Rates:
4.00% to 7.5%

Preferred DSC:
1.50

Types of Properties Considered:
Hotel, Industrial Building/Warehouse, Multifamily, Office, Retail

Life Company Fee:
1% is typical

Alliance Fees:
$2500.00 Retainer Fee (paid upfront)
1% Success Fee (paid at closing)

Note:
This Life Company will consider Construction/Perm, First Mortgage, Fixed Rate Mortgage

Bridge Loans

Alliance Business Capital has formed Business Relationships with 2 – 3 Reputable Bridge Lenders to better assist our Clients.

Below are one of our Lending Partners terms which are not all inclusive.

Rates:
As low as 8.5%

Loan Size:
$1 Million Minimum $50 Million Maximum

Acceptable Uses:
Purchase, Refinance, Major Rehab

Terms:
2 & 3 Year Terms available

Leverage / Loan to Value:
Up to 80% of Actual Cost Maximum Typically 65% LTV

Minimum FICO Score:
620 Minimum 680 Average

Non-Recourse:
Available on Case by Case basis

Prepayment Penalty:
Step Down Prepay, Flat Prepay, YM

Debt Service:
Varies with Investor

Amortization:
Interest Only Payments are possible

Origination & Application Fee(s):
Alliance has a $2500.00 Engagement/Processing Fee – paid upfront
Alliance has a 1 to 3% Success Fee – paid at closing and determined after a review of a full package
Lender/Investor Fees will also be applicable and disclosed and determined after a review of a full loan package.

Conventional Loans

Alliance Business Capital can assist with CMBS Mortgage Loans on Hotel Properties from $3 Million up to $50 Million. Rates for Hotel Properties are currently in the 5.50% – 6.50% range on the CMBS Mortgage Loans.

Properties must be stabilized with minimum Debt Service Coverage of 1.35x and located in a Metropolitan area containing a minimum population of 100,000.

Please provide the following items for initial review:

  1. Most recent 2 year end financials – profit and loss statement
  2. Most recent 12 months trailing profit and loss statement
  3. Current year to date profit and loss statement with balance sheet
  4. Current STR Report
  5. Copy of ownership formation documents
  6. Copies of any recent Appraisal, Environmental Reports
  7. Copy of any Franchise Documents

These are the initial documents needed. Please email to allianceloans@msn.com or upload to our secure site at http://alliance.leapfile.net

 

 

Capital Markets

Alliance now has access, through our Lending Partners, to the Capital Markets.

Capital Market Overview

Alliance’s Lending Partners to the Capital Markets offers cost-effective and flexible structured debt and mezzanine loans, such as secured credit facilities comprised of term loans and revolvers, subscription lines secured by investor commitments, traditional warehousing and term facilities for debt platforms, financing for loan portfolio acquisitions and co-lending large loans; a-notes, pari-passu and senior/sub including mezzanine.

Lenders Guidelines

Structured Debt

Product Types:
Secured Credit Facilities comprised of Term Loans and Revolvers Subscription Lines secured by investor commitments Traditional Warehousing and Term Facilities for debt platforms Financing of Loan Portfolio Acquisitions, performing and non-performing portfolios

Property Types: Office, Multifamily, Retail, Industrial, Full-Service Hotels

Preferred Size:
Secured Credit Facilities: $100 million to $750 million
Subscription Lines: $50 million to $100 million Warehousing:
$100 million to $500 million Financing of Loan Portfolio Acquisitions:
$50 million to $500 million T

Term:
Fixed or Floating / 3 to 10 years; Secured Credit Facilities can combine multi-rate/duration notes

Markets:
Prefer Primary Markets, Domestic and International

Borrowers:
Real Estate Funds, Separate Accounts, REOCs/REITs and Insurance Companies


Mezzanine Loans

Product Type: Secured Mezzanine Loans behind CMBS or Life Company Senior Mortgages Property Types: Office, Multifamily, Retail, Industrial, Full-Service Hotels Markets: Primary Markets, Domestic and International Structure: Bankruptcy remote SPE, customary intercreditor and cure rights Size: $25 Million to $200 Million LTV: Up to 75% Term: 1 to 10+ years Rate: Market rate depending on LTV and risk, current pay (fixed/floating) Coverage: Target Minimum 1.2x from income in place

Hedge Fund Loans

Alliance Business Capital is pleased to offer the following Hedge Fund Lending Program which is designed for Income Properties, Construction, Raw Land Acquisition and Development Loans.

Existing Properties Only

Currently we can only assist with refinancing or purchases of existing properties.

Basic Transaction Features: Loan Amounts: $10 – $550 million

Loan Term: 2 – 6 years

Recourse: Typically, most deals are recourse deals.

Prepayment: Loans generally may be prepaid at any time after 2 years without penalty. Prepayment penalties may be required for shorter terms.

Loan to Value: Loan amounts can be up to 75% of the Bank’s approved appraised value.

Loan Rates / Fees: Rates start at Wall Street Journal Prime + 3% depending on the collateral type and risk. Loans are generally interest only and highly leveraged loans may contain an equity kicker or additional fees.

Alliance Business Capital Fees: Alliance has an engagement/processing of $2500.00 – paid upfront Alliance has a success fee – typically 1% of the final loan amount and paid at closing.

Origination Fee: Typically one percent

Hedge Fund Commitment Fee: Typically one percent Loan

Collateral: Real estate assets. We specialize in land, land development loans and other property types (e.g., hotels and special purpose properties) whose special circumstances disqualify them from lowest-rate financing. We also provide “bridge loans” on traditional multi-family, retail and office properties that need to be “turned-around” before they can qualify for conventional loan underwriting.

Quick Response: Our Partner has in-house staff for most preliminary market, engineering, and legal reviews, allowing us to quickly quote specific loan terms based on information provided in the loan request. Portfolio Lender: This hedge fund lender originates loans for its own portfolio so the borrower saves time and money dealing with one lender and one set of due diligence and closing personnel.

Loan Flexibility:
Alliance’s works hand in hand with this lender and together we will strive to tailor a loan structure to fit your deal, unlike so many other institutions that require your deal to fit their structure.

SBA Hotel Financing

 

 

 

This is a new loan program for Alliance. Please see below Criteria:

Minimum Loan Amount:
$500,000

Lien Position:
Can be 1st or 2nd Position (no need to refinance a good 1st Mortgage)

Acceptable Uses:
To meet PIP For upgrades Renovation

Eligible Properties:
Flagged Properties
Non-Flagged Properties
Older Properties (must be well maintained and cash flowing)
Interior & Exterior Corridors

Debt Service:
Minimum 1.25%

Term:
Up to 10 years

Maximum Loan to Value:
Up to a Maximum CLTV of 80% on cash flowing and well maintained properties Must have Sufficient SBA Eligibility and meet SBA Guidelines.

Your business is very important to us. If you have any questions about any of the Hotel Loan Programs offered through Alliance please do not hesitate to Contact Us or you can Apply Online to get the ball rolling..

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