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
