$4.2M SBA refinance for Choice Hotels franchise
Introduction
Strategic refinancing strengthens liquidity and brand alignment. Cornovus Capital arranged $4.2 million in SBA 7(a) financing to refinance a Choice Hotels branded asset. The refinance provided long-term rate stability, refreshed brand-mandated capital improvements, and liquidity reserves to enhance operating flexibility. With strengthened cash flow and reduced debt service, the borrower successfully repositioned the hotel into a higher revenue tier under Choice’s updated brand standards.
Challenge
Balancing rate stability, brand compliance, and liquidity. The borrower, an experienced hotel operator, faced multiple financial and operational hurdles, including:
- Multiple short-term loans creating administrative burden and restrictive payment schedules
- Deferred capital expenditures due to limited working capital availability
- Brand-imposed PIP obligations under Choice Hotels franchise renewal timelines
- Higher variable-rate debt structures impacting forecast stability
- Limited cash reserves restricting growth and expansion opportunities
Solution
Customized SBA 7(a) refinance designed to enhance long-term performance. Cornovus Capital structured an SBA 7(a) loan with a fully amortizing 25-year term and competitive fixed interest rate, consolidating multiple debts into one efficient facility. The refinance addressed both immediate cash flow and future capital improvement requirements while aligning with Choice Hotels’ franchise compliance standards.
- Refinanced multiple short-term obligations into one long-term SBA 7(a) facility
- Funded 100% of required brand PIP improvements with escrow reserves
- Reduced monthly payments by more than 20% through lower interest rate and extended amortization
- Created working capital reserves to fund marketing and guest experience initiatives
- Streamlined debt service reporting and improved financial predictability
Results
Enhanced liquidity, stabilized operations, and strengthened brand performance.
- Improved DSCR and long-term debt coverage stability
- Completed brand-mandated PIP ahead of schedule with no out-of-pocket capital injection
- Reduced debt service burden and consolidated multiple lender relationships
- Refinanced into a fixed-rate SBA 7(a) structure aligned with Choice Hotels’ franchise compliance timelines
- Positioned hotel for sustained NOI growth and competitive market performance
About Cornovus Capital
With over 70 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, bridge and construction lending, 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 objectives.
Why Partner with Cornovus Capital?
At Cornovus Capital, we understand that hospitality transactions require strategic alignment between brand requirements and financial execution. Whether refinancing existing debt, completing franchise PIPs, or expanding into new markets, our advisory-driven approach ensures certainty, speed, and capital efficiency.
What Sets Us Apart
- Expertise in franchise hospitality refinancing and brand-compliant capital structuring
- Experience executing SBA 7(a) and conventional hotel loan refinances nationwide
- Proven ability to integrate capital improvements and PIP funding within refinance structures
- End-to-end advisory and lender coordination support from underwriting to closing
Contact Cornovus Capital
For hospitality owners seeking SBA refinancing solutions to improve cash flow, fund renovations, or align with brand requirements, Cornovus Capital delivers expertise, efficiency, and certainty.
Email: info@cornovuscapital.com
Phone: 513-993-3044
Website: cornovuscapital.com