Hospitality business is getting pinched by bank. Advice/thoughts/suggestions?

 

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Hospitality business is getting pinched by bank. Advice/thoughts/suggestions?

Bank wants me to pre-pay both 8 mos of mortgage/loan (504 / 7a) and property taxes; kept in escrow to be used to make payments if business can’t. (No details on deferment /repayment structure yet).

In exchange, bank offers 8 mo deferment.

In meantime, bank will “work on SBA” to get their portion of the loan/mortgage “frozen”. Unclear what frozen means currently- but more interestingly, bank requests we don’t discuss any of this with SBA or their liaison (Why?).

Within 8 mos, bank wants a new biz plan describing how we’ll again be profitable (and able to pay mortgage).

Or, a plan on how we’ll pay off loan in its entirety.

Not super thrilled with idea of tying up this much capital in escrow ( I have 3 other unrelated hospitality businesses in a tough spot too) nor the fact that I’m getting more on the hook by such an escrow situation.

I’m curious if anyone sees what the banks strategy is and what my best approach may be here. This is so far just “talking points” from the bank, but it’s clear they want to move on something like this. They’re nervous about offering simple deferments at this point apparently. My goal is to get back to business, but unsure of market -due to COVID perception and ongoing/potential closure/reduction mandates.

**I have PPP & EIDL funds that’ll last until at least spring, after this it’ll be personal funds, additional (unannounced) gov funding, or a mix.

[edit] more info: effectively, the bank is pushing for a forbearance agreement reflecting the terms above. A bit odd in my mind due to the amount of EIDL/PPP funds available. I’m wondering if the bank is just trying to minimize their perceived potential loss of our biz should fail or whatnot…

What’s it look like to those more familiar?

Hospitality business is getting pinched by bank. Advice/thoughts/suggestions?

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