Posted by ray@lcorn on November 16, 2002 at 13:40:34:
Larry,
The description of your property is likely closer to a boutique hotel than a B&B. Not sure that makes any difference to an existing noteholder, but it will make a difference to an investor. Boutique hotels are difficult to finance, largely because there are no major chains that support them with franchise and marketing support. In fact, a large chain is the antithesis of a boutique property. But because of that they are relegated to local lenders for financing.
The key to getting anything done with a lender is a well written business plan. The package you did for an investor likely contains much of the information the lender will require to consider your request to refinance. They will want information regarding your experience and capacity to make the deal work, specific plans about the facility and any improvements you contemplate, and a marketing plan that supports the operating projections. An existing lender has an advantage on you in that they have already lived with the property for longer than you have. Don’t be surprised if they know as much if not more about the operation than you do, especially if the present owner has had any trouble servicing his debt.
For more information about how to write and format a loan proposal/business plan, do a search in the archives for business plans.
ray