ASSIGNMENT:

A past client returned to have us refinance and cash out on their hotel. Main purpose was to obtain some cash for required PIPS that needed to be made on the subject property along with some small amount going towards FF & E's.

CHALLENGE:

We had financed this property when it was purchased which was less than 15 months ago. We had structured a loan under a SBA 504 program and therefore we had to keep the SBA debenture in place and negotiate with the lender in 1st lien position to refinance their loan and allow for cash out that was specifically being invested back into the property, and we needed an appraisal that supported all of this.

SOLUTION:

SBA agreed to subordinate to a new 1st trust deed as long as we did not go beyond the leverage of the previous loan and none of the cash out funds could go in borrower's pocket it had to go towards the Capital improvements ( PIPS) and no greater than 5% of the cost could go towards FF & E's. This all worked out perfectly and the property appraised at a value that allowed the proposed structure to work. Everyone was happy and we already started refinancing another hotel for these borrowers.