Scientific Capital Arranges the Refinance of Comfort Suites, California

PRLog (Press Release) - Jul. 17, 2012 - This client had a loan with a higher floor and margin and was in the adjustable period. A low fixed rate for 5 years takes this client to July of 2017 and a margin of 3/4 of percent over prime renders a very reasonable rate in 2017 assuming that the PRIME index will be higher by then than it is currently at 3.25%.

A difficulty in placing this type of loan is that it is not having interested buyers in the secondary market and so most lenders, knowing they have to keep this type of loan on the books, avoid it and gravitate towards SBA 7a.

Another fluid factor in refinancing of 504 loans is that the SBA has to subordinate to the new lender and so a subordination application is placed with the SBA CDC that originally processed the SBA 2nd loan. In states where the SBA has faced many hotel loan defaults and foreclosures, if there is an increase in the loan amount, the SBA may not be willing to offer subordination.

Scientific Capital had refinanced this hotel for the previous owner in 2006 and then for the acquisition of it by the new owners in 2008 attesting our client focused rather than transaction focused business model.

Scientific Capital Group, Inc. (www.scicap.com) is a hotel financing advisory and brokerage company established in 2003 in Irvine, California offering services throughout the 50 states. For more information, please contact Ramin Mostaan at (949) 477-5000 or email him at ramin@scicap.com.