A hotel acquisition in the Marina/Cow Hollow neighborhood of San Francisco for the Lombard Plaza Motel. The purchase of the hotel was made with an SBA 504 loan through TMC Financing.
Online PR News – 29-January-2014 – San Francisco, CA – Lombard Plaza Hotel Ownership made possible through SBA 504 loan
SAN FRANCISCO (JAN 28, 2014) New owners have acquired the Lombard Plaza Motel. The experienced new owners are Roger Patel and Nilesh Patel, under the operating company 2026 Lombard Street, LLC. The 8,630 square foot hotel is located at 2026 Lombard Street in San Francisco and is an iconic three-story hotel property, constructed in 1955. Just miles from the Golden Gate Bridge, this hotel restores the traditional tourist accommodations are all about– walk-able to many San Francisco sights. The financing for the purchase of the hotel was completed with an SBA 504 loan and totaled $4,514,000. The financing will allow Lombard Plaza Hotel to retain working capital and retain employees.
David Griffis, Senior Vice President of Business Development at TMC Financing, worked with 2026 Lombard Street, LLC to provide the financing. The lender on the project was Bank of the Orient in San Francisco, and Sam Patel of CSV Hospitality Management facilitated the loan process.
“The SBA 504 program helped my company to purchase a building with a moderate down payment, which allowed us to renovate the building without borrowing extra money,” said Sam Patel, president of CSV Hospitality Management. “With the SBA guaranteeing a portion of the loan, we had no problem getting a primary bank to make the loan. TMC was excellent in helping us. They made the entire process extremely easy. Once we picked our primary bank, the folks at TMC dealt directly with them, and got our loan closed within our deadline. Everyone we worked with at TMC was knowledgeable, courteous and helpful. I would definitely use TMC for any future loans and I highly recommend them to everyone.”
In the last three years, TMC Financing has provided $677 million in hotel financing alone. In 2013 the overall SBA 504 program has provided $920 million to hotel owners throughout California.
“At TMC we feel hotels and SBA 504 is a great match. In 2014 we see TMC helping even more hotel owners through the SBA 504 financing,” said Barbara Morrison, President and CEO of TMC Financing. “Because credit availability through conventional lenders likely will remain unpredictable for the foreseeable future, the SBA has really stepped up to fill the funding gap and expanded to complex projects like hotels. There are many reasons why the 504 program is appealing for hoteliers. For starters, there is no maximum on the project size, no additional collateral is required, and equity injection is only a 15% minimum.”
Several other reasons hotel owners are attracted to the SBA as an alternative financing option is because the loan can be used for construction, renovation, and/or an acquisition or purchase. If the hotel is a franchise, the loan can be easily approved through the SBA’s franchise registry. For green energy construction or enhancements, more access to capital is available at $5.5 million verses only $5 million. And any single owner can hold more than one SBA 504 loan.
About the SBA 504 Program
SBA 504 financing offers businesses below-market, fixed rate financing for the acquisition, renovation or construction of commercial real estate. SBA 504 loans provide long-term stability for businesses with the ability to retain working capital which can be used to further grow the business and create new jobs. The January SBA 504 interest rate is 5.53%, fully fixed for 20 years. The typical loan structure for an SBA 504 loan comes from a first mortgage with a conventional lender and second from a certified development company (CDC).
About TMC Financing
TMC Financing provides Small Business Administration (SBA) 504 real estate financing and is the leading Certified Development Company (CDC) in Northern California and Southern Nevada. During the past 30 years, TMC has provided over $7.5 billion in SBA 504 financing for more than 4,500 businesses. This financing has resulted in the creation of over 33,000 jobs. TMC has been ranked in the top five Certified Development Companies nationwide for over a decade. TMC's experienced team works directly with borrowers, lenders and real estate brokers to tailor financing packages that meet SBA program guidelines and the borrower's credit capacity. For more information, visit tmcfinancing.com.