Lakepoint refinances a 115-room Okanagan hotel out of higher pricing into a competitive 4-year fixed term

This engagement came to us through an existing relationship. Our client owns and operates a 115-room flagged hotel in the Okanagan, a property they built and opened in 2021. Five years on, the hotel had established itself as one of the stronger performers in its regional peer group. What had not changed was the financing. The lender that funded construction was still the incumbent, and they were coming up for maturity.

That is a common situation, and an expensive one. Construction lenders price for construction risk: an unfinished building, no operating history, and no proof yet that the business plan works. That pricing is entirely fair at the time. It stops being fair once the building is complete and the operation is stabilized. The renewal pricing offered by that lender simply was not at market - no fault of that lender, they just have a higher cost of funds than others.

So the mandate was simple: get the cost of borrowing down.

We prepared a detailed Request for Financing that told the story the way it deserved to be told, with five years of operating history, occupancy and rate performance benchmarked against the regional peer set, the flag relationship, and a clear picture of the sponsor behind it. Then we took it to the market and ran a competitive process, approaching lenders in parallel rather than negotiating with one at a time. When lenders know they are competing, terms improve in ways they simply do not when a borrower is talking to a single bank.

Four lenders came back with offers. A credit union won the file, and the results went well beyond rate.

Lower borrowing costs: The winning offer included a very competitive four-year fixed rate on a $12,400,000 term loan. Measured against the incumbent's renewal terms, the savings run into the several hundred thousand dollars over the four-year term, and that is after considering Lakepoint's engagement fee.

Improved cash flow: The new facility amortizes over 25 years, which spreads principal repayment over a longer horizon and frees up cash the business can put toward operations, capital improvements, or distributions.

Materially less personal exposure: The personal guarantee was capped at 5.0% of total credit facilities. On $12,900,000 of total credit, that is roughly $645,000 of personal exposure instead of the full amount. For an owner-operator, that is one of the most valuable concessions available in commercial lending, and it is rarely offered without being asked for.

Working capital in place: A $500,000 revolving line of credit was added alongside the term debt, giving the hotel a cushion for seasonal swings without touching the term facility.

The net result is a hotel financed on terms that match what the business actually is today, rather than what it was in 2021 when the first shovel went in the ground. Lower cost, longer amortization, a fraction of the personal risk, and a lender whose model fits a stabilized operating asset.

If your building has quietly outgrown the loan that built it, that is usually worth a conversation. Construction pricing has a way of sticking around long after the construction crew has packed up and left.