Hotel Financing Made Simple with USDA

Welcome Hospitality Management Company
Monmouth Junction, New Jersey

Challenge:

In September 2008, the management team decided to move forward with plans to build a limited service hotel. After considering several sites in North Carolina, the WHMCO team decided to build an 84-unit Wingate byWyndham in the town of Southport. The management team negotiated a construction agreement with Harold K. Jordan and Eastern Hospitality Advisors. They then needed to find a financial services partner with the resources, experience and commitment to help them build the facility. Owing to the credit crisis, at the time no lender was willing to finance the construction. Although the business had injected nearly 35% of their own capital in the project, no bank was willing to take the risk. If the borrower was unable to find a solution, his project would come to a standstill and prove very costly for him in the long run.

Solution:

Eastern Hospitality Advisors representatives recommended that Mr. CZ Patel contact Ocean Capital, the specialty finance arm for Home Loan Investment Bank. Having financed numerous hotels through the USDA program, Ocean Capital has extensive experience in originating, packaging and closing USDA Business & Industry loans catering to the hospitality & lodging industry. In cooperation with the North Carolina USDA office, Ocean Capital created a custom financial solution that met the borrower’s immediate need.

Results:

On January 30th, 2009, Ocean Capital agreed to provide a USDA B&I loan for $5MM to provide the borrower with the funds needed to complete the construction of his hotel and avoid any potential delays in meeting his April 2009 opening deadline. The hotel opened April 7th, 2009 and has been successful in capturing the travel and leisure business in Southport by offering a superior product at a competitive price.