There is no doubt that unprecedented times call for unprecedented measures. The travel industry has been hit harder than most and accounts for 15.8 million jobs in the United States. Small businesses like yours, are struggling and need relief.
Currently the US government is rolling out financial aid in stages. The second phase, called the Families First Coronavirus Response Act, was approved on March 18th and includes free testing, paid sick leave and enhanced unemployment benefits for qualified workers. The good news is that this coverage applies to most workers at small and midsize companies just like yours. Employees who have been employed for at least 30 days, are ill, quarantined or caring for someone who is sick can apply for 2 weeks of paid leave. And for those with children who cannot work for lack of childcare can apply for up to 12 weeks of paid leave.
The US government passed the third piece of legislation on March 27, 2020, the CARES Act, Coronavirus Aid, Relief and Economic Security package. Under the CARES Act, $349 billion has been allocated for the Paycheck Protection Program, which provides small businesses employing less than 500 people with low interest loans up to a maximum of $10 million. For example, although you may be part of a chain like Hilton or Wyndham, if your specific location has less than 500 employees, you would be able to qualify. The loans include features like payment deferrals and loan forgiveness, provided the funds are spent on operating expenses for the first 8 weeks after the loan was issued. Further instructions on criteria and how to apply can be found here. According to Chip Rogers, “there is one challenge that makes the current plan unworkable for hoteliers. The legislation limits an SBA loan to 250% of average monthly payroll. This limit will not allow a business owner to meet both payroll and debt service obligations beyond an estimated 4 to 8 weeks. Consequently, it will result in furloughing the very workers the bill seeks to protect. Since the measure reduces debt forgiveness with any reduction in payroll, hoteliers would be forced to use the entire loan amount on payroll, at the expense of debt service.”
Implementing such a large plan with many moving parts may take some time and suffer a few glitches but it is in your best interest to be prepared. Bank of America and Chase have already opened up their online portals to start accepting applications as of April 3rd, however it is important to check for any stipulations in place like bank specific application forms. Most other banks are expected to launch their processes once more information is released from the government so be sure to keep checking their websites as the situation is shifting rapidly and revisions are being released hourly. It is also important to note that if your own bank is not accepting applications just yet, you could also apply through any federally insured depository institution, federally insured credit union, or Farm Credit System institution. The SBA has released a list of the most active lenders here and Fundera has released a list of lenders currently accepting applications and their criteria.
Review My Room is committed to providing you, our clients with up to date information on support programs and assistance at each step of the process. Please give us a call if you need help with forms, criteria or if you just want to talk!
It’s time to pull together as a community, as an industry and as a nation. American hospitality professionals are a strong and resilient conglomerate. We will get through this crisis together!
