$1.74M SBA 7(a) Refinance Powers Hotel Renovation and Best Western Premier Brand Conversion
Introduction
Long-term financing structure supports hotel repositioning, debt consolidation, and branded relaunch. A Tennessee-based boutique hotel owner sought to unlock long-term value through a full renovation and brand transition. Originally acquired in distressed condition, the 47-key property underwent a complete transformation—modernizing rooms, upgrading FF&E, and enhancing its market profile through a strategic conversion to Best Western Premier.
To support this effort and eliminate high-cost short-term debt, Cornovus Capital secured a $1.74 million SBA 7(a) loan, enabling the borrower to refinance layered obligations and align operations under a nationally recognized brand. This case study highlights how long-term SBA financing can reposition hospitality assets, increase cash flow, and set the stage for sustainable growth in competitive secondary markets.
Challenge
Renovation delays, COVID-era disruptions, and a fragmented capital stack constraining growth. The borrower faced a series of financial and operational constraints as they worked to reposition the property:
- Acquired as a distressed asset with only 17 of 47 rooms operable at time of purchase.
- Renovation efforts stalled during the COVID-19 pandemic, delaying PIP completion.
- Operations were limited to partial occupancy, suppressing cash flow during key ramp-up periods.
- The borrower relied on $800,000+ in short-term private loans from multiple parties to complete improvements.
- The capital stack was fragmented and expensive, making it difficult to achieve financial stability or brand conversion.
Solution
Recapitalization strategy anchored by SBA 7(a) refinance—reducing debt service and unlocking long-term brand value. Cornovus Capital worked closely with the borrower to structure a long-term SBA 7(a) refinance package that paid off high-interest short-term loans, stabilized cash flow, and provided the borrower time to complete final brand upgrades. The solution included:
- $1.74 million SBA 7(a) loan with 25-year fully amortizing term and no balloon payment.
- Refinanced layered short-term debt obligations to reduce monthly debt service and interest burden.
- Financing structure allowed borrower to finish remaining brand-mandated upgrades and enter franchise system.
- Executed without interruption to ongoing operations or occupancy.
Results
Stabilized capital structure, improved cash flow, and successful franchise launch under national flag. The SBA 7(a) refinance positioned the hotel for long-term stability and growth with measurable improvements:
- Reduced debt service by over 45%, allowing management to reinvest in property operations.
- Final upgrades completed, resulting in acceptance into Best Western Premier system.
- Occupancy and ADR increased significantly following brand conversion and relaunch.
- Hotel now positioned as leading upscale flag in the market, supporting long-term hold strategy and cash flow.
About Cornovus Capital
With over 60 years of combined experience, Cornovus Capital is a trusted financial partner specializing in business financing, commercial real estate lending, and hospitality funding solutions. We design customized capital strategies that help businesses acquire, expand, and optimize operations, ensuring long-term growth and financial stability.
Our expertise spans SBA 7(a) and 504 loans, CMBS and LifeCo financing, private capital solutions, and structured debt strategies. By focusing on certainty of execution and closing assurance, we guide businesses and investors through complex financial landscapes, securing funding tailored to their long-term objectives.
Why Partner with Cornovus Capital?
At Cornovus Capital, we understand that complex transactions require sophisticated financing solutions. Whether repurposing commercial assets, structuring high-leverage debt, or integrating municipal incentives, we deliver capital strategies designed for certainty and efficiency.
What Sets Us Apart?
- Advisory expertise in adaptive reuse, commercial redevelopment, and business acquisitions
We have a strong history of structuring financing for property repositioning, urban infill projects, mixed-use developments, and real estate acquisitions that support business expansion and operational stability. - Innovative capital structuring
Our financing solutions include non-recourse construction loans, Mini-Perm transitions, and TIF-backed capital stacks. - Proven track record across diverse transactions
Over the years, we have facilitated financing for a wide range of businesses, developers, and real estate investors, helping them secure the capital needed to grow and succeed. - End-to-end capital advisory and execution
From initial underwriting to securing financing, we provide comprehensive transaction support to ensure seamless execution and certainty of funding.
For businesses seeking flexible financing solutions to support expansion, acquisition, or working capital needs, Cornovus Capital delivers expertise, efficiency, and certainty.
Contact Cornovus Capital
At Cornovus Capital, we simplify the financing process with tailored solutions, competitive loan terms, and expert advice. Whether you’re acquiring, refinancing, or developing a property, we’re here to help you succeed.
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📞 513-653-4246
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