Refinance SBA 504 Hotel Loan with New SBA 7a to Buyout Partners in Indiana
following points highlight the challenges and the achievements of this
1) SBA 504 can be
refinanced with a 7a loan: In this project, we
refinanced the 504 first TD, the SBA debenture in the 2nd
position, and the nearly $450,000 of renovation and PIP (Property
Improvement Plan) cost. The
refinancing of the existing first trust deed keeping the SBA debenture
in place would have been the first choice but the project involved
partner buyouts where every other guarantor was leaving the partnership
forcing us to refinance the entire loan. Additionally, 504 commercial
first loans are tougher to finance in our credit market where the
lenders of these commercial loans are seeking simple higher quality
transactions. Furthermore, SBA debenture has certain limitations and
one cannot always structure the required business changes within the
2) SBA 7a refinance can be used
in partner buyouts: SBA can be used to
finance partner buyout if those
partners completely leave the partnership and the remaining partner has
sufficient equity in the project.
3) Transfer of more than
51% of ownership translates into a
franchise re-licensing: For those whose title is not structured under a
single entity, such as ownerships under tenants in common, a change in
ownership of 51% or more triggers a relicensing of the franchise
agreement. It is always a preferred strategy to have the hotel titled
single entity and manage the details of the partnerships in the
operating agreement or the bylaws.
4) Payoff of 504 SBA
debentures: These loans can only be paid off on
the third Thursday of each month. Planning is crucial in refinancing
What Our Client Thinks of Us
Some memories we always cherished. Mr.
Ramin Mostaan helped me in refinancing my Clarion Hotel and Conference
Center. From my perspective, he is one of the most Preferred vendors
rendering effective financial services in the current hotel/motel
I had to repay a conventional loan. It was a difficult transaction.
Technicalities in the ownership and franchise implications postponed
the closing couple of times. He encouraged me with his affirmative
answers all the time.
My initial paper work started in May of 2012 and we ended up closing in
November due to many challenges handled by Mr. Mostaan. I am
really appreciative of Mr. Ramin Mostaan is his creativity and
knowledge, his calm attitude and his timely guidance. He communicates
tirelessly by phone, by text messages, by emails, and by his three way
conferences etc. He provides precise and justified answers to all
In short, if I could be a reference to his work and work ethics, he
would pass with flying colors.
Col Nataraj V Kote
A major differentiator between us and the others is the loyalty of our clients. Here are the other hotels that we
financed for this client not to mention a number of referrals that we have received from him.
|| Purchase of Motel6 of Evansville, IN
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