Financing hotels with larger loans in tertiary markets through the conventional bank loans is challenging which is why many hoteliers use the SBA or the USDA program. A viable option that is often ignored is the CMBS non-recourse conduit loans; if the hotel meets the CMBS requirements such as the LTV (often 70%), the brand, the franchise term, the cashflow, the occupancy, the Debt Yield, and the Debt Service Coverage Ratio while the loan amount is sufficiently high enough to justify the CMBS costs, then it is an option to consider. In this project, with the Purchase price of $13 million and the additional PIP fund of $700K, Scientific Capital decided to use the CMBS program for the financing with a loan of $9.6 million (70% of the total cost of the purchase and the PIP) for a 5-year Term at 6.5% rate fixed for the 5-year term. You may go to our CMBS Loan Program page for more information on these loans.