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Financing a Hotel Purchase & Formula Blue PIP with 80% Conventional Loan in Virginia

Holiday Inn Express

Claypool, VA


Holiday Inn Express of Claypool Virginia finance


Conventional hotel loans at higher Loan to Value are more difficult to arrange mainly because unlike pre-2009 era the national lenders are either no longer in business or just do not lend on hotels leaving regional and local lenders as the source for the conventional hotel loans. Since the appetite for the hospitality assets in the secondary market never recovered, the lenders have to now hold the hotel loans on their books. However, due to new regulations they can only portfolio a limited volume of special-use assets such as hotels. Many hoteliers contact their local banks only to realize that the capacity of these banks for hotel loans is full. This is where Scientific Capital makes significant contribution to our clients, we match the loans with our regional lenders that are having capacity for new hotel loans.

This loan was structured at 80% Loan to Value as a five-year fixed loan fully amortized for 20 years and resetting every five years at starting rate of 3.85%. Since a syndicated partnership was acquiring this hotel, we were able to negotiate a limited guarantee for each partner. We also negotiated a reduced lender point of a quarter of a point reducing the cost for our client. The loan also includes nearly 1 million of PIP (Propery Improvement Plan) required by IHG Formula Blue design specifications. The PIP loan will be interest-only for a year once the disbursement begins.



Our Other Projects With This Client


What differentiates us from the others is loyalty of our clients. Here is the other hotels that we financed for this client not to mention a number of referrals that we got from this client.


Purchase of Holiday Inn Express of Mooresville, NC and assumption of CMBS loan
Purchase of Holiday inn Express and Springhill Suites, Morgantown, WV
Purchase of Holiday Inn Express and Clarion of Fredericksburg, VA
 Purchase of Holiday Inn Express of Stephens City, VA
 Purchase of the Super8 of Claypool, Virginia
 Purchase of Super8 of Norton, Virginia
 Purchase of Super8 of Lebanon, Virginia
 Purchase of Sleep inn of Walterboro, South Carolina
 Refinance of Super8 of Lynchburg, Virginia


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