Among different industry vertical, the U.S. hotel industry is probably one of the most affected spheres that got completely blindsided. From labor shortage and zero sales to depleted cash reserves and empty establishments, the issues created by the pandemic are still affecting hoteliers in different ways.
As the industry gains a renewed sense of recovery in 2022 and the resuscitation continues, the industry is now undergoing a financial reset to restore its former glory. This blog will share updates and discuss ways in which hotel businesses can strengthen themselves financially to fuel their business operations:
REFINANCE AND CONSOLIDATE
Refinancing the existing debt at a higher loan-to-value ratio with a much lower interest rate and getting “cash-out” and redistributing cash equity as needed. Many hoteliers choose to refinance after several years of paying down debt to harvest their cash equity for purchasing, developing, and expanding their projects.
GET A PARTNER
A reliable partner can add a lot of value to your hotel project. Immediate family members, friends, quality acquaintances, and people who know you from the chamber of commerce, hotel franchise companies, hotel associations, third-party associations, and even business competitors are good candidates for partnership consideration.
Allot an appropriate percentage of ownership commensurate with the cash investment or a specific negotiated amount. Consult your attorney before drawing any kind of paperwork, buy-sell agreement, or tag-along-drag agreement.
MODIFY LOAN TERMS AND DEFER PAYMENTS
A honest, polite, frequent, and direct professional communication with all stakeholders proves highly beneficial for every type of business in times of crisis.
Have a clear understanding of your loan service provider or lender and your corporate attorney and public service accountant. Maintain a friendly and professional demeanor with your hotel franchise company and other third-party management company. Convey your willingness to be flexible around the arrangement and have an open mind if they ask you to make any concessions like implementing specific cost-cutting measures. When financial hardships worsen, draft a letter to your existing lender to modify loan terms to be more favorable and in terms of the current business realities.
APPLY FOR TX SBA HOTEL LOANS
Consider Austin SBA hotel loans to strengthen financial stability for your hotel business. SBA loans have played a vital role in the pandemic to minimize the impact of the economic downturn and risks during the period and revival of companies. Depending upon your location, you can even apply for an economic injury disaster loan that usually offers up to $2 million in cash assistance at a 3.25% interest rate. It can provide significant financial support to alleviate the temporary loss of revenue.
Each state usually has its disaster relief program for financial assistance.
The key here is to be creative and careful. Although we are well into 2022, the labor shortage and struggle to maximize restaurant spaces can still be felt. With that being said, if you would like to learn more about how TX SBA hotel loans can work in your favor, our experts can assist you. Connect with us to leverage more relaxed credit and property restrictions for your business.