Applying for any loan can be a stressful process, even for seasoned borrowers, and hotel financing is perhaps the most complex of all commercial real estate assets. Lenders have a number of requests come across their desks every day. How can borrowers know what will attract the lender and make their application stand out? What must borrowers do to put their best foot forward and come to the table ready to negotiate the most competitive loan for their needs?
1. Demonstrate forward thinking
Demonstrate forward thinking with three- to five-year projections for the business plan.
Showing this kind of financial forethought is something the lender takes into consideration when evaluating the loan application. It reveals an applicant’s preparation and organization, as well as provides that applicant with a degree of control over the impression given to the lender. Lenders, regardless of their organization’s loan criteria, want to know if the property’s net income is sufficient to support the loan amount being requested. To allay any lender hesitation, it must be clear how extending credit carries minimal risk potential to help generate a positive ROI.
This piece is a guest blog for Lodging Magazine. Continue Reading...