Securing the best possible hotel loans involves more than a trip to your friendly neighborhood banker.
As with all commercial lending situations, presenting your hotel property in the best possible light, and understanding the nuances of the many financing programs available can make a huge difference in the quality of the loan offers you ultimately receive.
Hotels with national franchise affiliations are considered “flagged” properties.
Hotel or motel properties with no national franchise affiliation are considered “unflagged.” “Mom & Pop” style operators typically run these types of facilities and the quality and level of service varies considerably.
When underwriting hotel loan opportunities, K2 Commercial Finance first considers the type of hospitality property that requires financing. In addition to the “flag” issue, we have programs specifically designed for full service hotels, limited service hotels and suite or extended stay hotels.
We will work with you to create the strongest possible loan submission package, highlighting the strengths of your property with respect to its local market and specific location attributes, as well as favorable property conditions and characteristics.
Market and Location Underwriting Considerations include:
The properrty should be easily accessible and visable from the highway or major roadway.
Business-oriented hotels will provide ready access to downtown business areas, corporate parks and airports.
Vacation-oriented hotels will be highly visable from major roadways and be in close proximity to recreational amenities.
Property Conditions and Characteristics Underwriting Considerations include:
The property should have sufficient parking capacity
A stable historical operation is critical. Properties with a history of four years or less require additional scrutiny.
The property should have an ongoing refurbishment program for both hard and soft goods.
Franchise affiliated hotels are preferrable, with franchise agreements extending beyond the term of the proposed loan.