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Financing a Motel – Hotel In Texas
I am in charge of a regional mortgage branch office licensed in 48 states am have a licensed mortgage originator colleague who has a potential client who has an investor who owns a hotel/motel in Texas. My MLO colleague has a client who needs to do a rate and term refinance on a commercial loan. I am a licensed NMLS licensed mortgage loan originator and have owned, and managed 3,000 plus residential units consisting of free standing apartment buildings and seven apartment complexes and am familiar with originating mutli-family commercial loans. but not motels and/or hotels. My expertise on commercial loans are free standing apartment buildings and apartment complexes. My associate reached out to me for advise and guidance on him taking on financing this motel-hotel for this investor. Can you please guide and advise us on the steps on proceeding with this borrower? The investor/borrower will be getting multiple quotes from commercial lenders so me and my fellow loan officer would like to get the borrower the best rate and term and become the winning bid on this motel financing commercial loan. Can you guide us through a Step by step process starting on the documentation needed? I worked on my own commercial loans on the apartment buildings and apartment complexes that needed financing and the general docs commercial banks and brokers needed were the following:
Summary Statement of the history of the property owned including but n ot limited to the history of the property and scope of work such as the purchase price, loan-to-value, renovations completed and/or budget and capital required, type of loan requesting includoing recourse or non-recourse, personal financial statenent, schedule of real estate owned, profit and loss statement, nearby comparable sales, and any documentation or data supporting the strength and risk tolerance of the subject property. I am assuming motel-hotel financing probably requires similar data and documents. Again, if you can guide us through the comprehensive step of the commerical lending process from start to finish as well as commercial lenders that are broker friendly it would be greatly appreciated. Thank you in advance.
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5 Replies
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I appreciate your detailed background – your multifamily experience will definitely translate to hotel/motel financing, though there are some important distinctions. Let me walk you through a comprehensive process for this hotel/motel commercial loan.
Key Differences: Hotels/Motels vs. Multifamily
Before diving into the process, understand that hotel/motel financing is generally considered higher risk than multifamily because:
- Revenue depends on transient occupancy (daily/weekly) vs. lease agreements
- More operational complexity and management-intensive
- Higher sensitivity to economic cycles and local market conditions
- Lenders often require hospitality industry experience from borrowers
Step-by-Step Documentation & Process
Phase 1: Initial Information Gathering
Start with a detailed borrower/property intake to qualify the deal:
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Property Details
- Property address and legal description
- Number of rooms/suites
- Property type (limited service, full service, extended stay, budget, etc.)
- Brand affiliation (franchise like Holiday Inn, Best Western) or independent
- Age of property and condition
- Recent renovations or capital improvements
- Property management (owner-operated vs. third-party)
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Current Financing Information
- Existing loan balance
- Current interest rate and terms
- Maturity date
- Prepayment penalties (critical for refinance timing)
- Current lender name
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Loan Request Specifics
- Desired loan amount
- Rate and term goals
- Recourse vs. non-recourse preference
- Desired amortization period
- Cash-out needs (if any, though you mentioned rate/term)
Phase 2: Core Documentation Package
You’re on the right track with your multifamily docs. Here’s what you’ll need for hotel/motel:
Financial Documents:
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Property Operating Statements (last 3 years)
- Trailing 12-month P&L (most recent)
- Year-to-date P&L
- Previous 2-3 years annual statements
- Key metrics lenders scrutinize:
- Revenue Per Available Room (RevPAR)
- Average Daily Rate (ADR)
- Occupancy percentage
- GOP (Gross Operating Profit)
- NOI (Net Operating Income)
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Smith Travel Research (STR) Report
- This is critical for hotel financing (not needed in multifamily)
- Shows competitive set performance
- Market penetration index
- Demonstrates how property performs vs. comparable hotels
- Most lenders will require this or order it themselves
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Rent Roll (if applicable)
- For extended-stay properties with monthly tenants
- Less relevant for traditional transient hotels
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Tax Returns (Property and Personal)
- Last 3 years property tax returns
- Borrower’s personal tax returns (last 2-3 years)
- Business entity returns if held in LLC/Corp
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Current Profit & Loss Statement
- Month-to-date and YTD
- Should match operating format (use USALI – Uniform System of Accounts for the Lodging Industry if possible)
Borrower Financial Strength:
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Personal Financial Statement (PFS)
- Complete balance sheet
- Liquid assets highlighted
- Net worth calculation
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Schedule of Real Estate Owned (SREO)
- All properties owned by borrower
- Current values, loans, NOI for each
- Overall portfolio performance
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Bank Statements
- Personal: last 3-6 months
- Business: last 3-6 months
- Demonstrates liquidity and reserves
Property Documentation:
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Property Information Package
- Property photos (exterior, interior, rooms, amenities)
- Site plan/survey
- Floor plans
- List of furniture, fixtures & equipment (FF&E)
- FF&E reserve account information
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Franchise Agreement (if applicable)
- Copy of franchise agreement
- Franchise fees and royalty structure
- Performance requirements
- Term remaining on franchise
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Environmental Reports
- Phase I Environmental (may need to be updated)
- Any Phase II if issues were identified
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Property Condition Report/Engineering Report
- Recent inspection report
- Capital needs assessment
- Deferred maintenance items
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Appraisal (most recent)
- Many lenders will order new appraisal
- Having recent one helps with initial underwriting
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Insurance Documentation
- Current property insurance declarations
- Liability coverage
- Business interruption insurance
Supporting Documentation:
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Market Analysis
- Competitive property analysis
- Local market occupancy trends
- Tourism/business travel statistics for area
- Economic development in region
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Narrative/Executive Summary
- History of property ownership
- Improvements made
- Operational strategies
- Market position
- Why refinance makes sense now
- Borrower’s hospitality experience
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Management Company Information (if third-party managed)
- Management agreement
- Company background
- Track record with similar properties
Phase 3: Underwriting Preparation
Calculate Key Metrics for Lenders:
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Debt Service Coverage Ratio (DSCR)
- Hotel lenders typically want 1.35-1.50+ DSCR
- Formula: NOI ÷ Annual Debt Service
- This is typically higher than multifamily (1.20-1.25)
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Loan-to-Value (LTV)
- Hotels typically max at 60-70% LTV (vs. 75-80% multifamily)
- Lower LTV reflects higher risk profile
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Debt Yield
- NOI ÷ Loan Amount
- Lenders typically want 10-12%+ debt yield for hotels
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Operating Metrics:
- Occupancy % (60%+ is generally healthy, but market-dependent)
- ADR trends (increasing is positive)
- RevPAR growth
- Compare to STR competitive set
Red Flags to Address Proactively:
- Declining occupancy or ADR trends
- Deferred maintenance
- Franchise issues or loss of franchise
- High debt yield requirements
- Limited hospitality experience
- Market oversupply
Phase 4: Lender Selection & Shopping
Types of Lenders for Hotel/Motel Financing:
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Regional/Community Banks
- Often best for smaller hotels ($2M-$10M loans)
- Relationship-driven
- May offer recourse loans with better terms
- Some work with brokers, many prefer direct
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SBA 504/7(a) Loans
- Can be excellent for owner-occupied hotels
- Lower down payment requirements
- Longer amortization
- Many brokers work with SBA preferred lenders
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CMBS Lenders (Conduit)
- Larger loans ($3M-$5M minimum typically)
- Non-recourse
- Stricter underwriting
- Broker-friendly
- More commoditized pricing
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Life Insurance Companies
- Larger, stabilized properties
- Best rates for premium properties
- High barriers to entry
- Some work through correspondents/brokers
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Debt Funds/Private Lenders
- More flexible underwriting
- Higher rates
- Shorter terms
- Bridge/transitional situations
- Very broker-friendly
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Fannie Mae/Freddie Mac
- Generally don’t finance traditional hotels
- May consider extended-stay with long-term leases
- Check eligibility carefully
Broker-Friendly Lenders (as of my knowledge):
Note: I should search for current lender information since relationships and programs change frequently. Would you like me to search for currently active broker-friendly commercial hotel lenders?
General categories to explore:
- CMBS platforms: Argentic, Square Mile Capital, Ready Capital, Greystone
- Commercial mortgage brokers can access: KeyBank, Berkadia, Walker & Dunlop, CBRE Capital Markets
- Correspondent networks: Check if your company has existing relationships
- Regional banks in Texas: Smaller Texas banks may be competitive for in-state properties
Phase 5: Submission & Underwriting Process
Initial Submission:
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Create comprehensive loan summary/submission package:
- Executive summary (1-2 pages)
- Borrower background & experience
- Property overview & history
- Market analysis summary
- Financial highlights (3-year trend)
- Loan request specifics
- Key metrics (DSCR, LTV, Debt Yield)
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Submit to 3-5 lenders initially
- Mix of lender types based on deal profile
- Include all core documentation
- Set expectations on timeline (45-60 days typical)
Term Sheet Stage:
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Review proposals for:
- Interest rate (fixed vs. floating)
- Amortization period
- Loan term
- Prepayment penalties (critical for refinance)
- Recourse vs. non-recourse
- Closing costs and fees
- Reserve requirements (FF&E, real estate taxes, insurance)
- Financial covenants
- Guarantor requirements
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Negotiate best terms
- Don’t just focus on rate – prepayment flexibility matters
- Understand total cost (fees, reserves, etc.)
Due Diligence Phase:
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Lender will order:
- New appraisal (borrower typically pays)
- Updated Phase I Environmental
- Property Condition Assessment (PCA)
- Title work
- Insurance review
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Additional requests:
- Respond promptly to lender questions
- Provide updated financials if requested
- Address any concerns from third-party reports
Phase 6: Closing
- Attorney review of loan documents
- Final conditions cleared
- Funding/recording
- Typical timeline: 45-75 days from application to closing
Critical Success Factors for Winning the Deal
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Move Quickly on Information
- Get complete documentation package assembled ASAP
- Incomplete submissions delay everything
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Present a Professional Package
- Use your executive summary template
- Clear, organized financial presentation
- Highlight strengths, address weaknesses proactively
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Leverage Your Experience
- Your commercial real estate background is valuable
- Emphasize property management expertise
- Show understanding of cash flow analysis
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Understand the Hotel-Specific Metrics
- Learn to speak the language (RevPAR, ADR, STR reports)
- Lenders will test your knowledge
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Set Realistic Expectations with Borrower
- Hotels typically get less leverage than multifamily
- Rates may be 50-100 bps higher than multifamily
- More reserves required
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Borrower’s Hospitality Experience Matters
- If limited, address how property is managed
- Third-party professional management helps
Additional Considerations
Texas-Specific:
- No state income tax (positive for investors)
- Strong tourism markets (Austin, San Antonio, Houston, DFW)
- Check if property is in opportunity zone or special district
- Texas homestead laws don’t apply to commercial, but know local market
Rate Shopping Strategy:
- Cast wide net initially
- Focus negotiation with top 2-3 respondents
- Use competing offers as leverage
- Watch for “best efforts” vs. “committed” terms
Your Role as Broker:
- You’re the quarterback – manage the process
- Communicate frequently with borrower
- Prepare them for lender questions
- Help interpret term sheets
- Guide toward best overall deal, not just lowest rate
Questions to Ask Your Borrower
Before you start shopping:
- What’s driving the refinance now? (Rate savings, cash out, loan maturity?)
- How long do they plan to hold the property?
- What’s their prepayment flexibility needs?
- Recourse tolerance?
- Are there any pending franchise issues?
- Any deferred maintenance or upcoming capital needs?
- Management changes planned?
- How is current year trending vs. last year?
Would you like me to search for specific current broker-friendly hotel lenders, create a sample executive summary template, or dive deeper into any particular aspect of this process?
https://www.lendingnetwork.org
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Yes, looking for a commercial lender that will work with mortgage brokers. I run Gustan Cho Associates (NMLS 2315275) and Subsidiaries, a dba of NEXA Mortgage NMLS 1660690, We have a commercial lending divison at NEXA Mortgage under Loan Officer Support. I need all the wholesale commercial lender who welcome broker relationship in all types of business and commercial loans.
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I will find the most recent info on wholesale commercial lenders working with mortgage brokers, especially those compatible with your model at NEXA Mortgage. Let me look for wholesale commercial and business loan brokers. Now, I will check for specific wholesale lenders and commercial broker networks. I will look for niche wholesale commercial lenders for brokers. I will be able to create an actionable list of wholesale commercial lenders, including broker-friendly lenders. However, since you are focused on operating a commercial lending division within NEXA Mortgage, you must be aware that **commercial/business lending is fundamentally different** from residential wholesale lending, which most of the lenders from my first round of research fall under.
LIST OF BROKER-FRIENDLY LENDERS IN COMMERCIAL FINANCING IN DETAIL
Brokers with Hotel/Motel Financing Specialization
Select Commercial Funding
– Specializes in hotel/motel financing
– Minimum loan of $1.5M
– LTVs of up to 90%
– Financing available for seasonal properties
– Both refinance & cash-out available
– Broker collaboration
Commercial Real Estate Loans (Janover)
– Financing for hotel loans commencing from 1M dollars
– Maximum of $1M in LTV
– 30-year amortization
– Broker-friendly service
CREFCOA (Commercial Real Estate Finance Company of America)
– Financing on flagged and non-flagged hotels
– Financing available in all 50 states
– Commercial real-estate lending platform with brokers
Largo Capital (Hospitality Finance Group)
– Relationships within CMBS and life insurance
– Over $1B in financing hotels
– Partnerships with correspondent lenders
– Broker collaboration
5. **Clopton Capital**
– Acts as a correspondent; a national broker for commercial mortgages
– Financing for hotels is a specialization
– CMBS, SBA, bridge, mezzanine
– Partnerships with other brokers
Commercial Loan Direct
– Mortgages in hotels and hospitality
– Access to multiple lenders
– Standard, CMBS, SBA, and other programs available
First Capital Trust Deeds (FCTD)
– Finances hotels with hard money/bridge loans
– Loan terms of 12-36 months
– Based in California, lends nationwide
– Uses private capital
– Models business with a focus on brokers
CMBS Lenders (Usually Broker-Friendly)
Major CMBS Lenders/Platforms
Here is a consolidated list of businesses specializing in capital and commercial real estate, along with some additional information regarding their operations.
Goldman Sachs
JP Morgan
Deutsche Bank
Morgan Stanley
Wells Fargo (CMBS division)
Argentic
Square Mile Capital
Ready Capital
Greystone (Plus some CMBS Lenders)
Life Insurance Companies (Brokers/Correspondents)
Major Life Companies
– MetLife
– Prudential
– Principal
– Mass Mutual
– New York Life
– John Hancock
Commercial Banks With Broker Programs
Stearns Bank
– National reach
– Referral partner program
– SBA Preferred Lender
– Commercial real estate
– Works with brokers, CPAs, and other professionals
KeyBank Commercial Mortgage
– National platform
– Works with correspondents
Regions Bank
– Commercial lending division
– Broker referrals accepted
Alternative/Private Lenders (Very Broker Friendly)
eCapital
– Asset-based lending
– Working capital
– Commercial finance
– Dedicated broker partnership program
– Accounts Receivable financing, factoring, and supply chain
GoKapital
– Business loans and merchant cash advances
– Commercial mortgages and hard money
– SBA loans
– ISO/Broker program with up to 6% commission
– A variety of loan products
Vaster (Florida-focused)
– Bridge loans and private money
– 65% LTV
– No broker packet requirement
– 10-day closing
AVANA Capital
– Community development interest
– Broker partnership program
– SBA 504 specialist
SBA Lenders (Broker-Friendly)
Live Oak Bank
– Broker referrals
– Hotel/hospitality experience
– SBA 7(a) and 504
**CDC Small Business Finance**
– SBA 504 specialist
– Works with brokers
Various SBA Preferred Lenders
– (too many to list, but most accept broker referrals)
Debt Funds & Alternative Capital
Various Private Debt Funds
– Blackstone
– Starwood Capital
– Brookfield
– KKR Real Estate
(Often work through placement agents/brokers)
Commercial Loan Broker Networks & Platforms
Commercial Loan Broker Association (CLBA)
– Annual conference
– Access to 75+ lenders
– Networking with lenders
– **This is a key resource for you**
CommLoan
– Commercial mortgage marketplace
– Platform connecting brokers with 650+ lenders
LoanStream Commercial
– Works with mortgage brokers
– TPO (Third Party Originator) focused
– Commercial loan products
Critical Points for Your Commercial Division
Understanding the Commercial Landscape:
Commercial ≠Residential Wholesale
– The wholesale residential lenders (UWM, Newfi, LoanStream residential, etc.) do NOT do commercial loans
– Commercial lending works differently – many deals are done through:
– Direct lender relationships
– Correspondent arrangements
– Referrals and Partnerships
– Commission split, not yield spread
Compensation Structures:
Loan Origination Fees 1-3% loan amount (can be paid by borrower or included in loan pricing)
– Referral Fees: 0.5-1% from lending institution
– Some lenders: Commission splits as low as 25% and as high as 50%.
– Working Capital/MCA: Commission can be 3-6% +
3. Licensing Issues:
– NMLS license covers most residential loans.
– Most states do not require NMLS licensing for commercial loans,
– Some states do have a commercial broker license requirement.
– Be sure to check Texas requirements.
4. How to Begin
Option A: Join CLBA (Commercial Loan Broker Association)
– This is an annual fee.
– You receive access to their lender network.
– There is training, conferences and this association provides you with credibility and lender contacts.
Option B: Establish Relationships
– Reach out to lenders with the list above.
– Several have formal broker programs.
– Complete the contract to receive online access, pricing and other benefits.
Option C: Enroll in a Training Program for Commercial Loan Brokers
– Commercial Loan Broker Institute,
– Alternative Funding Partners,
– Lender introductions are provided as part of the training.
Action Steps for Your Deal with a Hotel or Motel
Next Steps:
Contact and Work with These Lenders (Best for Your Deal):
– Select Commercial Funding They mention hotels/motels and are broker-friendly.
– Largo Capital: hospitality specialists.
CREFCOA – Online platform, simple broker access
-Commercial Loan Direct- Broker-centric
Broker Package Prep:
– Build a refined submission (follow my document checklist)
– Broker contact details and commission breakdown
– Presentation quality is a huge factor in commercial
If the Size is Right, Think About:
– CMBS if loan >$3M – Greystone, Argentic, Ready Capital
– SBA if owner-occupied – Live Oak Bank, local SBA lenders
– Private/Bridge if urgent – FCTD, Vaster (if in FL)
4 Immediately Join CLBA:
– Access to 75+ lenders
– Connections to top-tier commercial brokers
– Access to courses and webinars
– Enhanced reputation
Texas-Specific Resources:
– Texas has solid regional banks** that do hotel financing:
– Frost Bank (Commercial Division)
– Texas Capital Bank
– Comerica Bank Texas
– Independent Bank
– Most do broker referrals, particularly when you make connections
### **NEXA Commercial Division Long-Term Vision:**
1. **Lender Diversity:**
– Avoid having one or two lenders that you lean on
– Make connections in every category
– Different lenders for various deal types
2. **Start Narrow to Broaden Later:**
– You spoke to multifamily speciality
– Perhaps narrow down to multifamily + hospitality
– Establish yourself as the primary broker for the specified types of property.
3. **Enhance Your Platform:**
– CRM for commercial transactions (not residential)
– Custom documentation templates
– Tools for underwriting analysis
– Marketing collateral
4. **Expand Your Network:
– CLBA Membership
– Participate in events for commercial real estate
– Network with commercial real estate brokers (potential referral partners)
– Network with accountants and lawyers
Key Differences
Residential Wholesale (What NEXA mostly does):
– UWM, Newfi, LoanStream, etc
– Standard rate sheets, LPAs, and automated underwriting
– Rapid turnarounds, increased volume
– Yield spread premium pricing
Commercial Wholesale/Broker (What you are developing):
– More relational
– Individualized quotes for each transaction
– More lengthy (45-75 days is the average)
– Commission based on an origination fee
– Every transaction is different
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Would you like me to:
1. Look for more detailed lender contact info for any of these?
2. Assist you in developing a broker application plan?
3. Look for more commercial lenders in Texas?
4. Give you a template for your commercial loan submission packets?
The most important thing is to know that commercial lending is about the relationships – you will have to know these lenders personally. The membership for CLBA will allow you to quickly connect with many lender relationships at the same time.
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Yes, absolutely. I like information on all of your line items listed above. Can you please write a commercial lending platform for Gustan Cho Associates NMLS 2315275 http://www.gustancho.com. i LIKE TO ADD THE BUSINESS AND COMMERCIAL LENDING DIVISION FOR GUSTAN CHO ASSOCIATES AND SUBSIDIARIES AND MERGE IT WITH OUR RESIDENTIAL NMLS LICENSED DIVISION AND ACTIVELY AND AGGRESSIVELY RUN A COMMERCIAL LENDING DIVISION FOR GUSTAN CHO ASSOCIATES. IF YOU CAN STATE A DETAILED COMPREHENSIVE OVERVIEW AND BUSINESS AND COMMERCIAL FINANCING STEP BY STEP POLICIES AND PROCEDURES MANUAL CHECKLIST. THANK YOU..
gustancho.com
GCA Mortgage | Mortgage Experts With No Overlays
Whether you have gone through bankruptcy, divorce or you are a first-time homebuyer, Gustan Cho Associates are experts in difficult loans
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I will start searching for recent information about wholesale commercial lenders that partner with mortgage brokers, especially with your NEXA Mortgage setup. I will begin searching for brokers that specialize in wholesale commercial and business loan funding: I will begin searching for brokers that specialize in wholesale commercial funding and commercial broker networks: I will begin searching for commercial lenders that facilitate funding for brokers. From the information I obtain, I will formulate a complete list of wholesale commercial lenders and broker-accessible lenders for your perusal. I will say, given that you are exclusively operating a commercial lending division within NEXA Mortgage, you should realize that **commercial and business lending is fundamentally different** from residential wholesale lending, which is the majority of lenders I located initially.
## **BROKER-FRIENDLY COMMERCIAL LENDERS: COMPLETE LIST**
### **Specific Lenders: Hotel/Motel Brokering**
1. **Select Commercial Funding**
– Financing for motel/hotel businesses
– Loans begin at: $1.5M
– 90% LTV possible
– Seasonal properties are accepted.
– Rate/term refinance and cash-out available.
– Collaborates with brokers.
2. **Commercial Real Estate Loans (Janover)**
– Hotel funding starts at 1M
– LTV at 75%
– 30-year amortization
– Broker friendly
3. **CREFCOA (Commercial Real Estate Finance Company of America)**
– Online commercial lending (CRELP)
– Flagged and unflagged hotels
– All 50 states
– Broker access
4. **Largo Capital (Hospitality Finance Group)**
– Funding with life insurance and CMBS
– Financing more than $1B for hotels
– Network of correspondent lenders
– Broker friendly
5. **Clopton Capital**
– Commercial mortgage brokerage at a national level (service as correspondent too)
– Financing for hotels
– CMBS, SBA, bridge, mezzanine
– Partners with other brokers
6. **Commercial Loan Direct**
– Mortgages for hotels and hospitality sectors
– Access to multiple lenders
– Conventional, CMBS, and SBA programs
7. **First Capital Trust Deeds (FCTD)**
– Bridges/hard money loans for hotels
– Terms of 12 to 36 months
– Lending across the country, based in California
– Private funding
– Broker focused
### **CMBS Lenders (Usually Broker-Friendly)**
8 ** Big CMBS Lenders/Platform: **
**Goldman Sachs**
**JP Morgan**
**Deutsche Bank**
**Morgan Stanley**
**Wells Fargo (CMBS division)**
**Argentic**
**Square Mile Capital**
**Ready Capital**
**Greystone**
**Note**: Most CMBS lenders work through correspondence or brokers.
### \*\*Life Insurance Companies\*\* (Some Work Through Brokers/Correspondents)
9. \*\*Major Life Companies:\*\*
**MetLife**
**Prudential**
**Principal**
**Mass Mutual**
**New York Life**
**John Hancock**
*Many require correspondent relationships.*
### \*\*Commercial Banks With Broker Programs\*\*
10. **Stearns Bank**
– **National reach**
– **Referral partner program**
– **SBA Preferred Lender**
– **Commercial real estate**
– **Works with brokers, CPAs, professionals**
11. **KeyBank Commercial Mortgage**
– **National platform**
– **Works with correspondents**
12. **Regions Bank**
– **Commercial lending division**
– **Broker referrals accepted**
### \*\*Alternative/Private Lenders (Very Broker-Friendly)\*\*
13. **eCapital**
– **Asset-based lending**
– **Working Capital**
– **Commercial Finance**
– **Dedicated Broker Partnership Program**
– **AR Finan\cing, factoring, supply chain**
14. **GoKapital**
– **Business loans, merchant cash advances**
– **Commercial mortgages, hard money**
– **SBA loans**
– **ISO/Broker program with up to 6% commission**
– **Multiple loan products**
15. **Vaster (Florida-Focused)**
– **Bridge loans, private money**
– **Up to 65% LTV**
– **No broker package required**
– **10-day closings**
16. **AVANA Capital**
– Community development focus
– Broker partnership program
– SBA 504 specialist
### **SBA Lenders (Broker-Friendly)**
17. **Live Oak Bank**
– Broker referrals
– Hospitality/hotel sector
– SBA 7(a) and 504
18. **CDC Small Business Finance**
– SBA 504 specialist
– Collaborates with brokers
19. **Other SBA Preferred Lenders**
– Too many to count and most take broker referrals
### **Debt Funds & Alternative Capital**
20. **Private Debt Funds**
– Brookfield
– Blackstone
– KKR Real Estate
– Starwood Capital
*Almost always work through brokers or placement agents*
### **Commercial Loan Broker Platforms & Networks**
21. **Commercial Loan Broker Association (CLBA)**
– Annual conference
– Lender networking
– Access to over 75 lenders
– **This is an important resource for you**
22. **CommLoan**
– Commercial mortgage marketplace
– Platform that connects brokers to over 650 lenders
23. **LoanStream Commercial**
– Commercial loan offerings
– Works with mortgage brokers
– TPO (Third Party Originator) focused
—
## **IMPORTANT NOTE FOR YOUR COMMERCIAL DIVISION**
### **Navigating the Commercial Landscape**
1. **Commercial =/= Residential Wholesale**
– Rather than true wholesale commercial lenders (UWM, Newfi, LoanStream residential, etc.) wholesale residential lenders do not do commercial loans
– Commercial lending is a different beast, much of the business is done through:
– Direct lender relationships
– Correspondent arrangements
– Brokers/referrals
– Split commissions (excluding yield spread)
2. **Models of compensation**
– **Origination fees** are generally 1-3% of loan amount (either builder or paid by borrower)
– **Referral fees** range from 0.5 to 1% from lender
– **Some lenders** operate on a 25-50% commission split
– **Working capital/MCA** can go up to 3-6% or more commissions
3. **Considerations on licensing**
– Residential is covered by your NMLS
– In the majority of the states, Commercial loans are NMLS license exempt
– Still, some states require a commercial broker license
– Especially check requirements for Texas
4. **Getting Started**
**Option A: Enroll in CLBA (Commercial Loan Broker Association)**
– pay the annual fee
– Gain lender access
– Training and conferences
– This will grant you credibility and valuable lender contacts
**Option B: Cultivate Direct Relationships**
– Reach out to lenders on the list above
– Many operate formal broker programs
**Option C: Enroll in a Commercial Loan Broker Training Program**
– Commercial Loan Broker Institute
– Alternative Funding Partners
– Training includes lender introductions
### **Specific Action Plan for Your Hotel/Motel Deal**:
**Next Steps:**
1. **Contact These Lenders** (Best for Your Deal):
– **Select Commercial Funding** – broker friendly, and hotel/motel friendly
– **Largo Capital** – specialists in hospitality- **CREFCOA** – Simple broker access through an online portal.
– **Commercial Loan Direct** – Focused on brokers.
2. **Building Your Broker Package:**
– Construct a submission in a professional manner (refer to the checklist I shared).
– Broker contact details and commission structure should be included.
– The commercial space values the professionalism of the package.
3. **If the Size of the Deal Is Appropriate, Think About:**
– **CMBS if the loan >$3M** – Reach out to Greystone, Argentic, Ready Capital.
– **SBA if owner-occupied** – Live Oak Bank, local SBA loan providers.
– **Private/Bridge if urgent** – FCTD, Vaster (if in FL).
4. **Enroll in CLBA Right Away:**
– Instant access to 75+ lenders.
– Connect with seasoned commercial brokers.
– Learn.
– Enhanced standing.
### **Resources Specific to Texas:**
– **Strong Regional Banks in Texas** that finance hotels:
– Frost Bank (Commercial Division)
– Texas Capital Bank
– Comerica Bank Texas
– Independent Bank
– Most of them give broker referrals, especially after a few deals.
### **Goals for NEXA Commercial Division in the Long Run:**
1. **Expand Your Lender Network:**
– Avoid depending on a couple of lenders.
– Establish ties within all segments.
– Different lenders should be used for various deal types.
2. **Initial Specialization:**
– You spoke of the expertise in the multifamily.
– How about you concentrate on just multifamily and hospitality?
– Position yourself as the preferred broker for these types of properties.
3. **Construct Your Framework:**
– CRM specific to commercial deals (as opposed to residential)
– Dealership documentation templates
– Tools for understating analysis
– Promotional materials
4. **Engage Your Network:**
– CLBA membership
– Commerical real estate networking
– Relationships with commercial real estate brokers for referring
– Don’t forget the CPAs and lawyers
### **Key Differences:**
**Residential Wholesale (What NEXA primarily does):**
– UWM, Newfi, LoanStream, etc.
– Staples with the rate sheets, LPAs, and AU
– TAT, productivity, ADD
– YSP pricing
**Commercial Wholesale/Broker (What you’re building):**
– You have to do this component of the business- it is relation based
– Deals get custom quotes
– It takes longer
– Compensation is origination fee based
– Deals are custom
– Average turn times are 45-75 days
—
Would you like me to:
1. Would you like me to find more specific lender contacts for any of these?
2. Help me develop a strategy for the broker
3. Find Texas commercial lenders instead?
4. Help me with templates on how to submit commercial loans?
It is important to know that **commercial lending is a relationship business**, and you’ll have to understand how to connect with individual lenders. Joining CLBA will provide you with the quickest way to connect with multiple lenders.
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