For David Elmore, vice president of finance for an international hotel company, Choice was clear: Licensees needed inexpensive financing. At Elmore's urging, the company, Choice Hotels International decided it should serve as a liaison between licensees and sources of capital to provide attractive appropriate levels of financing.

"If we can assist our licensees by using our size and clout to get more favorable financing terms so they can improve properties, have even better guest experiences, improve their REVPARs and so forth, we want to do it," he explains. "If we can assist licensees by arranging cost-effective, attractive sources of financing for new development, we want to do it. We have a number of programs which we have developed in conjunction with specific lenders which are available to Choice licensees to meet their capital needs."

Under Elmore's direction, Choice put together several programs including:

* A real estate mortgage invesment conduit through Lehman Brothers. "Lehman provides up to 23-year term, 23-year amortization, fixed-rate, non-recourse financing to Choice licensees for their acquisition of existing properties or for refinancing their existing properties," he says. "This conduit has made approximately million in loans to Choice licensees."

* Renovation financing through Merrill Lynch. Merrill Lynch Business Financial Service, a division of the Wall Street investment banker, provides renovation financing in amounts ranging from $100,000 to $5 million to Choice licensees at interest rates ranging from prime plus 3/4 to prime plus 2. "Choice licensees must have access to reasonably priced renovation financing, and we have arranged an attractive renovation financing program for renovation to their properties," he adds. "Merrill Lynch has made approximately $7 million in loans to Choice licensees."

* Get Met. Choice has implemented a permanent financing program through Met Life Capital Corp. for the development of Sleep Inns, its moderate economy limited-service brand. Under the plan, Met Life Capital provides permanent financing for the exclusive development of Sleep Inns. "To date Met Life Capital has financed about eight Sleep Inns and has appropriated $25 million for the development of Sleep Inns in 1996," Elmore says.

* Second mortgages. "In order to further facilitate Choice licensees' development of key products such as Quality Suites, Comfort Suites and Sleep Inns, Choice has agreed to provide some second mortgage financing to qualified borrowers," continues. "We have agreed to provide $20 million of second mortgage financing."

Elmore adds the company wanted to assist licensees by improving their financial performance. "We want to contribute to the success of our licensees, he says. For instance, if a licensee can refinance their property and take advantage of lower interest rates and increase net cashflow, we want to help them do that."