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First National Bank of Oklahoma is proud to announce the successful closing of a $1,680,000 USDA Business & Industry (B&I) Guaranteed Loan to finance the acquisition and rehabilitation of a hotel property in Oklahoma.
This strategic financing allowed a long-time client of the bank—an experienced hospitality operator—to exercise a purchase option under an existing lease agreement and acquire the hotel at a highly favorable price. In addition to the acquisition, the loan provided funds for essential renovations and brand repositioning, ultimately transforming an underperforming asset into a revitalized hospitality destination.
Purpose of the Loan
This USDA B&I loan provided the Borrower with the capital needed to:
- Acquire a well-located hotel property at a highly favorable price
- Improve its operational capabilities through property rehabilitation
- Elevate a low-performing property into a premier hospitality venue.
Loan Details
- Loan Type: USDA Business & Industry Guaranteed Loan
- Loan Amount: $1,680,000
- Use of Funds: Hotel acquisition + rehabilitation
- Term & Amortization: 20.5-year term
- 6-month interest-only period
- 20-year amortization following interest-only phase
- State: Oklahoma
This transaction represents FNBOK’s third USDA loan with this borrower, underscoring a trusted and productive lending relationship.
Strategic Benefits
1. Unlocking Ownership Through Lease Structuring
The borrower initially operated the hotel under a lease agreement with a built-in purchase option. This flexible approach enabled him to prove operational success before taking on ownership risk. With occupancy and performance improving under his management, First National Bank of Oklahoma stepped in with USDA B&I financing to support the transition from lessee to owner.
2. Operational Turnaround of an Underperforming Asset
Prior to acquisition, the hotel lacked brand recognition and online booking infrastructure. The borrower—an expert in digital marketing and hospitality turnarounds—implemented a new marketing strategy, boosted online visibility, and negotiated with a national hotel franchise to flag the property. This dramatically improved both occupancy and revenue performance.
3. Rehabilitation + Rebranding
Loan proceeds also funded physical improvements, helping the hotel meet franchise standards and elevate the guest experience. These renovations were essential for rebranding and aligning with the expectations of national and regional travelers.
4. Flexible Structure = Stronger Cash Flow
The 6-month interest-only period, followed by a 20-year amortization, allowed the borrower to reinvest early cash flow into improvements and ramp up operations without the burden of full principal payments from day one.
Why USDA B&I?
The USDA Business & Industry Guaranteed Loan Program is designed to support rural business development and economic growth by providing favorable loan terms that are not typically available through conventional financing.
For this hospitality project, the USDA B&I loan offered:
- Long-term amortization ideal for a hospitality turnaround
- Interest-only period to ease early cash flow pressure
- Higher leverage with a lower equity requirement
- Support for property rehabilitation and reflagging costs
By partnering with FNBOK and the USDA, the borrower was able to acquire and revitalize a key hospitality asset in the Oklahoma market—supporting local employment and enhancing the region’s tourism appeal.
A Proven Lending Relationship
This marks the third USDA transaction between First National Bank of Oklahoma and this client—a testament to the borrower’s success and our bank’s long-term commitment to supporting entrepreneurs in rural and semi-rural communities.
At FNBOK, we believe in financing potential, not just performance. Whether you’re acquiring, expanding, or improving a business asset in a rural area, our USDA B&I lending team is here to structure a solution that fits your vision.
Visit USDA Rural Development learn more about USDA B&I loan opportunities.