Financing a Hotel Purchase

with SBA 7(a) Pari-Passu Loan

Best Western Plus
Richmond, VA

Recognizing the complexities of the transaction, the listing agent, Mr. Justin Pinkard of Mumford Company introduced the buyers to Scientific Capital. The acquisition of the 80-room, interior-corridor Best Western Plus presented a number of challenges that were resolved with great team work between Scientific team and Mr. Pinkard. However, the project faced underwriting challenges as well such as the following:

Due to insufficient cashflow, Scientific Capital prepared projections integrating the buyer’s planned strategies that accommodated the minimum Debt Service Coverage Ratio of 1.15 upon completion of the renovations
Due to lack of buyer’s hotel experience, Scientific Capital had to rely on buyers’ years of experience and business acumen to structure a $6 million loan consisting of a $5 million SBA 7(a) loan and a $1 million pari-passu companion conventional loan. Considering the total acquisition cost of $7.4 million, $6.4 million purchase price and $1 million renovation budget, the $6 million loan was at 81% Loan to Value

What Our Client Thinks of Us

I would like to share our closing experience about buying our very first hotel, the Best Western Plus Governor's Inn, with the help of Ramin and Laila. It has been an amazing experience working with Ramin and Laila. From the moment we spoke for the first time, we knew that we found the right people, and that we would crack this deal. I just don't have enough words to describe your hard work, experience, and guidance every step of the way that you provided us. This is our first step into the hospitality business. We come from very different backgrounds: the gas station and trucking business. Ramin explained everything to us and understood our situation very well. He suggested an SBA loan, and we agreed. Everything went quite well at first, but we came through some difficult times. Ramin showed great patience, with incredible experience and thoughtful guidance, which made this very difficult deal possible in the end. You were with us every step of the way during every small and big decision. Your experience, knowledge, and patience helped us a lot. You showed your passion and professionalism, and we strongly recommend you to any hotelier for hotel financing loans. For us, you have become a mentor in the hotel business. We have created a long-lasting relationship with you, and I am sure we will close on more hotels in the coming future. We are all very thankful for your help and guidance. Ramin, you have given 110% in this deal. Thank you again, Ramin and Laila.

Shaishav Patel

Managing Member