Now is the best time to refinance hotels. But while conditions are ripe for borrowers, that does not automatically mean that your application will be approved. Before you go to a lender, here are five things you should do—or what are essentially five things every hotel lender wants you to do before you submit your application.
Bringing along projections that span three or five years can provide essential support to your business plan. This is the kind of financial forethought that lenders want to see and can easily be a factor when lenders determine your borrowing power. Show your lender your initiative and hotel business acumen. This is especially important when you are applying with a lender to purchase a hotel.
Bring Answers Instead of Assumptions
As a borrower, whether you are interested in hotels for sale or in refinancing hotel properties, you have a much better chance of getting the answer you want if you provide answers instead of assumptions. That means you need facts and proof to back up your business plan, like projections to help you show your lenders how the property will perform in the future.
If you want your loan request approved, then provide data that’s going to make it easier for your lenders to see why they should give you the green light. From your business financial statements and tax returns to your personal financial statements and debt schedules, ensuring that your application has all the necessary paperwork—and then some—will make it more likely for your loan to get approved.
Add Market Information
If you want to provide lenders with more valuable information that can help with the loan approval, add broader market information to your files. That kind of information can help make or break your application. Consider providing information regarding nearby demand generators, large corporations, and tourist attractions.
When you approach hotels brokers, don’t try to cover up your past. It’s best that you’re upfront about your history, even if that includes a bankruptcy or failed business. Hiding it will only fuel speculation. Be transparent about it. The right approach can even help you turn that to your advantage. You can use your experience in failed businesses to ensure this one won’t be. That, coupled with a solid business plan, can help you turn that no into a yes pretty quickly.
Find out more about how to approach brokers. For more details and help on how to refinance property or buy hotels for sale, contact us at NewGen Advisory.