CHLA Lodging News Sept/Oct 2019

12 CALIFORNIA LODGING NEWS www.calodging.com   continued f f Support from a Certified Development Company (CDC). A CDC, such as TMC Financing, is a nonprofit corporation established to support economic development in its community through the SBA 504 Program. CDCs complete the SBA paperwork and guide the borrower through the entire loan process. They strive to be the borrower’s advocate throughout the life of the loan and are a great resource for the borrower. SBA 504 Success Story: GROUND UP CONSTRUCTION Kiran and Minaxi Patel owned a small, independent hotel in Santa Cruz and after 45 years in operation, they decided they wanted to expand and modernize the property. The Patels connected with TMC Financing with a desire build a new 60-room hotel to replace their outdated, independent, 20-room hotel. TMC was able to secure $15 million in total project financing to complete the project, which is currently underway. The Patels used equity from their current property as seed money to scrap the old hotel and are constructing a new state-of-the-art flagged hotel in its place. The funds will cover $11 million in construction costs plus nearly $1 million for fixtures and furnishings. This new hotel will greatly increase the Patels’ capacity and revenue. In addition, they will have a long term, below-market fixed rate from the SBA. Is a 504 Loan the Right Choice for You? Property acquisition through an SBA 504 loan is an accessible and affordable way to grow your hotel business and solidify your financial security. It allows hotel owners to smartly invest in their business by either purchasing new facilities or making improvements to their existing ones. Qualifying for a 504 loan is easier than you may think. In fact, most businesses in the U.S. qualify, as long as they meet a few simple guidelines as a privately-owned business that operates for-profit.  Kurt Chambliss is the Executive Vice President of TMC Financing, a Certified Development Company (CDC) that has provided real estate financing for close to 40 years. TMC Financing is the national leader in SBA 504 hotel financing. With over 35 years of experience, TMC can help you find the financing that is best for you and guide you through the 504 loan process. Features of the 504 loan that are par ticularly at tractive to hotel owners include: Æ Æ Below-market FIXED interest rates with payments fully- amortized over 25 years, with no balloon payment. July’s 25- year rate is 4%. Æ Æ As low as 15% down payment. Æ Æ No project maximum. Æ Æ No additional collateral required. Æ Æ Franchised or independent hotels qualify. Æ Æ Versality of funds. Funds can be used to purchase land or buildings, construct or upgrade buildings, purchase large equipment and furnishings, and even to refinance commercial mortgages with cash out. Æ Æ Support from a Certified Development Company (CDC). A CDC, such as TMC Financing, is a nonprofit corporation established to support economic development in its community through the SBA 504 Program. CDCs complete the SBA paperwork and guide the borrower through the entire loan process. They strive to be the borrower’s advocate throughout the life of the loan and are a great resource for the borrower.