Refinance of Motel with USDA B&I Loan in Nevada
Battle Mountain, NV
Scientific Capital arranges a 2.03 million USDA B&I loan for the refinance of the Super 8 in Battle Mountain, Nevada. The project was financed at 78% Loan to original purchase Cost (LTC). The complexity of this project was to meet the USDA required 10% tangible equity. The issue with any USDA hotel refinance is that USDA requires 10% tangible equity on a CPA GAAP prepared balance sheet both on the current and the post-closing proforma basis. However, each year a hotel is depreciated, the equity drops as indicated on the tax return’s balance sheet. If the tangible equity then drops below 10%, before applying for a USDA loan, borrower has to infuse additional equity in the business operating account to reach the 10% tangible equity.
In this project, Scientific Capital was able to mitigate the depreciation impact and to qualify the project for the 10% tangible equity requirement.
We contacted you to help with the refinancing of our motel; however you exceeded our expectations and you were very resourceful. You informed us of a process we knew little about. We also know that you have obtained the maximum amount of loan that we were entitled to. Your dedication to our business is highly appreciated.
The financial advice and the high level of service that you provided to us was invaluable. In particular your attention to detail and explanation at every stage during the loan procedure was clear and informative. We could not have succeeded without your help and will definitely be recommending you to our friends and family.