Maximum Loan Amount | $25,000,000 – 1st Mortgage / Trust Deed Loan Amount | ||||||
Minimum Debt Service Coverage Ratio |
Multi-Purpose – 1.10x
Hospitality – 1.20x Special Purpose – 1.25x |
||||||
Minimum Global Debt Service Coverage Ratio | 1.25x+ | ||||||
Post-Closing Liquidity | 5% of total loan amount (1st + 2nd mortgage amount) | ||||||
Full Recourse | Yes (with Personal Guarantees) | ||||||
Minimum FICO Score | 650 | ||||||
Ownership Experience | Two years minimum ownership experience demonstrating successful (profitable) operation of same business. | ||||||
Maximum LTV For 1st Trust Deed |
|
Maximum Advance Rate | 70% – 85% of cost | ||||||
Contingency | 10% contingency and interest reserve must be accounted for in the project cost. | ||||||
Post-Closing Liquidity | 5-10% of total loan amount (1st+ 2nd mortgage amount), available upon completion of construction. | ||||||
Third Party Cost Review | Borrower must agree to third-party cost review, contractor evaluation report, and third-party fund monitoring during construction. All related costs may be included in project cost. | ||||||
Performance Bond | Borrower may be asked to provide performance bond from their contractor. Subject to third-party review of contractor. | ||||||
SBA Eligibility | The borrower must be eligible under the SBA 504 or SBA 504 Green Loan initiative programs. | ||||||
Maximum LTV For 1st Trust Deed |
|
||||||
Cash Collateral(May Be Required) | Additional cash collateral equivalent to 5% to 10% of the total project cost may be required during the construction phase if the Borrower and Guarantors do not meet the Global Debt Service Coverage Ratio requirements (0.50x-1.00x from surplus cashflow). Cash Collateral will generally be released upon completion of construction and issuance of the SBA 504 debenture. | ||||||
Additional Hospitality Requirements | Midscale or upper midscale limited-service or select-service franchises only. Property must be located in an economically diverse community with a population >50,000. |
Maximum Advance Rate | 75% of cost or 70% of stabilized value. For SBA eligible projects, up to 80% of eligible project costs. | ||||||
Loan Size | $1,000,000 to $15,000,000 | ||||||
Loan Term | 6 months to 36 months – Interest Only | ||||||
Collateral | 1st Mortgage or Deed of Trust on land and improvements held fee simple interest | ||||||
Stabilized NOI |
|
||||||
Recourse | Partial or Full Recourse | ||||||
Ownership Experience | Minimum 3 years of comparable ownership and management experience demonstrating successful (profitable) operations. | ||||||
Preferred Property Characteristics for Hotel Loans |
|
The following documents are required to prescreen the transaction and issue a discussion term sheet within 3 business days.
Business/Property | All federal copies of income tax returns for subject business over the past three years, including affiliate entities in which principals hold 20% or more ownership. For affiliate entities in which principals hold less than 20%, K1 statements are needed for the previous three years. |
Personal | All federal copies of tax returns over the past three years for all parties with 20% or more ownership interest in subject business. |
Financial Statement | Current year to date financial statement for all entities and personal financial statement of all guarantors. Personal financial statement form available here. |
Debt Schedule | Schedule of all debts for subject business. Template available here. |
Resumes | Management resumes of all principals, Guarantors, and GM. Template available here. |
Rates shown are updated every Tuesday of each week. On weeks where Monday is a holiday,
rates will be updated on Wednesday. Last updated: December 11, 2018
*As quoted by CDC Small Business Finance.