10/14/2026
🏨 JUST CLOSED | $6.8MM HOTEL REFINANCE
📍 87-Room Comfort Suites | Mississippi
🏦 Conventional Hotel Refinance | Fixed-Rate Bank Financing
Legacy Lending Partners is pleased to announce the successful closing of a $6.8 million conventional refinance for an experienced hotel ownership group.
The transaction refinanced the borrowers out of their existing SBA 7(a) pari passu financing and into a new fixed-rate conventional bank loan, significantly reducing their interest rate exposure while establishing a new long-term banking relationship. 🤝
💰 FINANCING STRUCTURE
Permanent Real Estate Refinance Loan
▪️ Loan Amount: $6.8MM
▪️ Interest Rate: 6.60% Fixed
▪️ Term: 5 Years
▪️ Amortization: 17 Years
▪️ Prepayment: 3% / 2% / 1%
▪️ Bank Origination Fee: 1.00%
▪️ Conventional Bank Financing
💡 A major component of the structure was preserving the ownership group's liquidity.
Loan proceeds financed the existing debt payoff along with transaction costs, including bank fees, appraisal, third-party reports, title and filing costs, legal expenses, and brokerage fees.
This allowed the borrowers to complete the refinance without injecting additional capital at closing, preserving liquidity for operations and future hotel acquisitions. 📈
🔎 THE OPPORTUNITY
The ownership group acquired the Comfort Suites in 2023 utilizing SBA 7(a) pari passu financing at Prime + 1.25%, resulting in a floating interest rate that had become increasingly expensive.
Since acquiring the hotel, the owners significantly improved the property's performance through hands-on management, targeted property improvements, and a strong focus on guest experience and operations. ⭐
With the property stabilized and performing well, the ownership group was ready to transition away from SBA financing and establish a relationship with a conventional bank that understood both hospitality real estate and experienced multi-property hotel operators.
⚖️ THE CHALLENGE
Although the hotel had demonstrated improved operating performance, the refinance still presented several underwriting considerations:
▪️ The guarantors were out-of-state owners with a hotel portfolio spanning multiple U.S. markets and no principal guarantor residing in Mississippi.
▪️ Financing a Choice Hotels-branded asset can result in a more limited conventional lender universe compared with certain select-service Hilton, Marriott, and IHG brands.
▪️ The borrowers were seeking a new conventional banking relationship for a sizable first transaction.
▪️ Ownership wanted to refinance the existing debt without contributing additional cash at closing.
▪️ The structure needed to provide enough proceeds to cover the existing debt and the various costs associated with completing a conventional refinance.
🤝 THE EX*****ON
Legacy Lending Partners worked closely with the ownership group and lender to present a comprehensive credit story focused on the strength of the sponsorship, demonstrated operating performance, real estate collateral, and the borrowers' broader hospitality experience.
Rather than simply finding a lender willing to refinance the hotel, our objective was to structure financing that improved the borrowers' overall position.
✅ We successfully secured a 6.60% fixed interest rate for five years, eliminating the interest-rate volatility associated with the borrowers' previous floating-rate SBA debt.
✅ We negotiated a relatively short 3/2/1 prepayment structure, providing the ownership group with future flexibility should the capital markets create another attractive refinancing opportunity.
✅ Most importantly, the transaction was structured so the borrowers could finance the costs associated with the refinance rather than deploy additional equity at closing.
🎯 THE RESULT
✓ $6.8MM Conventional Hotel Refinance
✓ 6.60% Fixed Rate for 5 Years
✓ Replaced Higher-Cost Floating-Rate SBA Debt
✓ Financed Transaction and Closing Costs
✓ No Additional Borrower Equity Required at Closing
✓ Preserved Liquidity for Future Acquisitions
✓ Established a New Conventional Banking Relationship
For experienced hotel owners, the right refinance is about more than obtaining a lower interest rate.
The right capital structure can reduce debt costs, protect cash flow, preserve liquidity, and position an ownership group for its next acquisition. 📊
🏢 Legacy Lending Partners works with hotel owners nationwide on acquisition, refinance, renovation, and construction financing, including conventional bank, SBA 7(a), SBA 504, USDA, and CMBS executions.
📩 Looking to acquire or refinance a hotel? Let's discuss the financing options available for your next transaction.
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