Scientific Capital

Financing the Purchase / Conversion of a Hotel
at 85% Loan in Florida

Quality Inn
Zephyrhills, FL

Financing hotels with an SBA 504 loan requires 20% equity injection (downpayment). This is true for both the construction and the acquisitions of hotels. However, if a hotel buyer is expanding an existing business, the SBA requires 15% equity in which case the structure looks as follows:

  • Lender: 50% of the total SBA qualified cost
  • SBA: 35% of the total SBA qualified cost
  • Borrower: 15% of the total SBA qualified cost

Expansion is the key word where various scenarios may be interpreted as expansion. For example, the fact that the buyer was managing the hotel for the seller helped us categorize this purchase as an expansion. In general though the expansion means acquiring a new hotel is the same market and with the same structure of ownership as an existing one. In these cases, the buyers establish a new entity to buy a new hotel but the ownership structure of the new entity is similar to one they hold already in the same market.

Manny and others visiting us at the AAHOA 2022 in Los Angeles

Our Other Projects With This Client

What differentiates us from the others is the loyalty of our clients who not only return to us for all their hotel financings but refer us to their circle of friends and family. Click below to see the other hotel that we financed for this client.

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