Purpose: Acquisition or refinance
The program is used for the purchase or refinance of hotels. The purpose of the refinance maybe to achieve cashout, partner buyout, transfer of ownership, PIP and renovations, etc.
Rate: Range from 8% to 13%
The rate will depend on the project and the source we can place for that project. By the project we refer to the market the hotel is located in, the financials and the characteristics of the hotel such as age, brand, etc., and the strenght of the sponsorship
Loan size: 3 million plus
This is the minimum loan Scientific Capital accepts for bridge loans
Loan to Value: up to 85%
The LTV ranges from 70% to 85% depending on our bridge source and the hotel project
Debt Service Coverage Ratio (DSCR): Project dependent
On many bridge loans, the loan is to help the borrowers to turn around the hotel. As such, in many projects, the DSCR is low and this is why a bridge loan is required. In many other instances, the cash flow is acceptable but the loan or the borrower is not qualified for a bank loan in which cases, the DSCR may be 1.2 and above
Reserves: None
This loan does not require FF&E reserves and the lender does not escrow taxes and insurance
Initial Deposit: Depends on our bridge sources
The amount and the purpose of the deposit depends on the source we use
Amortization and Maturity: Interest only – 1 to 3 years
Often borrowers require interst only for the term of the bridge loan and that is the market standard. Additionally, the term of the loan is generally 1 to 3 years with exceptional cases to be under a year
Prepayment: Depends on the source
Generally the bridge loans require an exit point which is about 1 to 2 points. However, differnet lending sources plan different point programs, some charge higher at the funding time and have no prepay, some charge points at funding and points at exit
Points:
Bridge loans require 1 to 3 points
Personal guarantee: Both recourse and non-recourse
Both programs exist depending on the hotel and the project
