Scientific Capital logo


 

Review of the bridge hotel loan program

 

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

 

 




Our Other Popular Hotel Loan Programs

Press to go to our CMBS hotel loan page Press to go to our Construction hotel loan page Press to go to our Conventional hotel loan page

CMBS


Construction

Conventional

Press to go to our SBA 7a hotel loan page Press to go to our SBA 504 hotel loan page Press to go to our USDA hotel loan page

SBA (7a)


SBA 504


USDA B&I