This was a purchase transaction for clients buying a Holiday Inn express & Suites in Hesperia. The goal was to obtain an SBA 504 Green program and achieve 80% LTV. The main borrowers involved in the acquisition were repeat clients with whom we have financed 4 hotels with one just earlier in the year, which was also a 504 Green Program.
The main applicants were multi layered in their financial statements which was quite an arduous task, and it turned out on this transaction they had plans of bringing in investor partners which is the first time for them doing this and not the norm on past loans we have completed for them. This transaction was riddled with delays and hurdles but everyone kept working together and pushing forward. For the buyers there was huge incentive in closing the transaction because the property value kept increasing while we were in escrow, but for the sellers they were looking for a way out since they had a backup offer that was significantly higher than our clients. We had lender loan approval, all third-party reports done, all members were packaged and the deal was buttoned down but then SBA dropped a major bomb on the transaction indicating that they were extremely backed up and that they would not make the close date and we could need get an extension to the close of escrow. This was not going to Happen!
A solution was needed and the only chance we had was to find a bridge lender who would offer the 80% LTV or close to it and could close in less than 10 days, and while using all of the existing reports. Fortunately, everyone kept their focus on the prize and it was really great seeing all parties involved in the transaction work together. We had a bridge lender engaged who was a real stand-up guy, but at the eleventh hour our main borrower informed us that he may have a family friend that could make the bridge loan for us, and at higher leverage and better terms and fees. What can we say there were definitely some higher forces at work on this deal looking out for the clients. The deal funded and closed on time. Now we will wait a few months and go back to resume with the SBA loan for the take out. Just want to say the Private bridge lender that had previously stepped up was on it as well, and that this change of course of action came from left field. Stuff Happens!