Hotel Conversion Equity And Guarantor: How We Close In 3 To 5 Weeks

Sponsors ask for speed, certainty, and clean governance when converting a shut or underperforming motel into a flagged hotel. This page explains how Financely packages a fundable case, introduces qualified capital, and delivers a firm equity commitment that fits construction lender requirements. The focus is sponsor-led conversions targeting a brand like Tribute or similar, using preferred plus co-GP equity, an optional mezzanine slice, and a private equity guarantor only when the senior loan requires completion support or selective recourse. Our role is to structure, underwrite, and distribute. The selected counterparty completes onboarding, documents, and funding under its procedures. No em dashes are used in this document.

What We Deliver

The outcome is a binding equity commitment sized to your sources and uses, priced to protect sponsor economics, and drafted to align with brand obligations and senior loan covenants. We run a disciplined term sheet auction, remove friction in advance, and maintain a fixed calendar so momentum never stalls. After selection, we coordinate with your counsel and lender counsel so conditions precedent clear on schedule and funds post to escrow when required by your purchase agreement and brand milestones.

Deal Profile We Support

Targets include shut or underperforming motels to be repositioned as upscale flagged hotels. Projects are sponsor led, with an operator in place and a credible brand pathway. Equity is raised in two stages where helpful. Stage one covers acquisition, permitting, and design. Stage two covers the equity deposit for the construction loan. The base case aims for a 20 percent IRR with realistic contingencies on time and cost. If seller pricing sits above appraisal or the budget has shifted, we address that in the capital stack and purchase negotiation so the model clears the return threshold without losing control.

Capital Stack That Clears The Model

How Our Platform Works

Intake and engagement come first. You upload the file in the client portal, complete KYC, and confirm mandate scope. We open underwriting after the retainer posts. Our team produces a lender grade memorandum that covers counterparties, brand status, operator scope, budget, schedule, and cash conversion. We align the model with senior loan policy so covenants, reserves, and reporting do not conflict. We then distribute to capital. We introduce the case to banks and non bank investors through regulated partners. Where a registered intermediary is required, a U.S. broker dealer serves as chaperone under Rule 15a 6. For documentary instruments, we introduce only top tier global banks. For equity, we run a timed term sheet auction and negotiate to commitment and allocation.

Term Sheet Auction That Produces Certainty

Every bidder receives the same memorandum and a response template. The template fixes variables that move outcomes. Check size. Pricing. Governance. Promote. Guarantor stance. Conditions. Fees. We keep the calendar fixed. First round responses convert to best and final. We recommend the term sheet that provides certainty of funds at a cost that preserves sponsor economics and passes lender review without rework.

Timeline From File Open To Commitment

The practical range is three to five weeks. Pace depends on document turnaround and third party calendars. We publish the calendar on day one and keep it.

Underwriting Standards That Move Lenders

We do not accept guesswork. We validate brand obligations, operator scope, budget and schedule logic, permit path, insurance, and covenants that control cash. We stress time, cost, rate, and revenue. The memorandum shows base case and downside so investors can price risk quickly. If an item will not pass lender review, it is reworked or removed before the auction opens.

What You Upload To Launch

Upload sponsor KYC, entity documents, the purchase agreement or LOI, the brand term sheet and deposit schedule, the current budget and schedule, drawings or third party reports if available, the operator LOI and fees, the financial model with sources and uses, and the construction lender checklist if available. If a document is not ready, enter the expected date. Use the client portal only. The portal timestamp controls the calendar.

Compliance And Regulated Partners

Investor participation is limited to accredited investors under Rule 506(c). All parties complete KYC, AML, and sanctions checks. Where a registered intermediary is required, a U.S. broker dealer serves as chaperone under Rule 15a 6. Financely is not a broker dealer. We do not issue securities or letters of credit. We do not custody client funds.

Pricing And Commercial Terms

The model is straightforward. There is a retainer that funds underwriting, offer design, distribution, and the auction through commitment and allocation. There is a success fee on equity funded at closing. Third party costs for legal, brand, lender diligence, tax, insurance, guarantor premiums, and custodial services are for the sponsor’s account and are paid directly to those providers. We do not promise a credit decision. We present a fundable case to decision makers and move to a firm answer on a fixed calendar.

Where This Process Fits

Sponsors who need equity to win control of a shut motel and secure a brand pathway. Sponsors who must post a brand deposit and fund design work before a construction loan can close. Sponsors who face a seller price above appraisal and need a structure that narrows the basis gap without losing control. Sponsors whose lenders require a guarantor for completion risk or selective recourse. Sponsors who value a fixed calendar and a clean auction that reaches decision makers.

Optics That Help You Close

Investors and lenders read discipline in the way you present. A clean data room, a short memorandum, and a schedule that holds build confidence. Digital presence matters. Operator references matter. Brand clarity matters. We keep the pack tight and factual. That is how you move from interest to allocation without wasting calls.

FAQ

Financely structures, underwrites, and distributes opportunities to banks, non bank lenders, and investors through regulated partners. Financely is not a broker dealer and does not issue securities or letters of credit. Participation is limited to accredited investors under Rule 506(c). Nothing here is an offer or a commitment to lend or invest. All transactions are subject to KYC, AML, and sanctions screening, verification of materials, third party approvals, and market conditions.