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June 25, 2010
Scientific Capital arranges a 2.03 million USDA B&I loan for the refinance
of the Super 8 in Battle Mountain, Nevada. The project was financed at 78%
Loan to original purchase Cost (LTC). The complexity of this project was
to meet the USDA required 10% tangible equity. The issue with any USDA
hotel refinance is that USDA requires 10% tangible equity on a CPA GAAP
prepared balance sheet both on the current and the post-closing proforma
basis. However, each year a hotel is depreciated, the equity drops as
indicated on the tax return's balance sheet. If the tangible equity then
drops below 10%, before applying for a USDA loan, borrower has to infuse
additional equity in the business operating account to reach the 10%
tangible equity.
In this project, Scientific
Capital was able to mitigate the depreciation impact and to qualify the
project for the 10% tangible equity requirement.
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Client's review of our services |
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Ramin:
We contacted you to help with the
refinancing of our motel; however you exceeded our expectations and you
were very resourceful. You informed us of a process we knew little about.
We also know that you have obtained the maximum amount of loan that we
were entitled to. Your dedication to our business is highly appreciated.
The financial advice and the high level of service
that you provided to us was invaluable. In particular your attention to
detail and explanation at every stage during the loan procedure was clear
and informative. We could not have succeeded without your help and will
definitely be recommending you to our friends and family.
Kind Regards,
M. Singh
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