The CARES Act by President Trump encompasses many relief measures for employers and employees. It is best to know the rules and regulations of the CARES Act before applying for assistance and loans.
Unemployment Assistance via CARES Act for Hotel Operators
Under this scheme, organizations with employees and self-employed people can apply for unemployment assistance. By December 2020, the CARES Act will pay half of the money for short term schemes helping employers reduce the workforce without laying off employees.
PPP Loans and Waivers via CARES Act for Hotel Owners
Hotels with an organizational size below 500 employees at a single location are applicable for PPP loans up to $10,000. Under this provision, small businesses that apply for loans due to economic uncertainty are granted PPP loans guaranteed by the SBA.
Applicants should prepare their documents before applying for PPP loans and loan forgiveness. Borrowers can seek PPP loan forgiveness with payments of the first eight weeks that include rent payment, payrolls, mortgage interests, and lease, debt, or utility services before February 15, 2020.
PPP loans that are not forgiven are subject to a 4 percent interest rate and maximum repayment of 10 years.
Employee Retention Tax Credit Under CARES Act for Hotel Owners
Employers may apply for PPP loans or employee retention tax credit that can provide half of the qualified wages if they suspend operations due to government regulations.
EIDL Loans and Grants for Hotel Operators
The EIDL under CARES Act is subjected to a cap of $2 million per loan. It also waives personal guarantees on loans up to $20,000 if the borrower has been in the business for one year and is unable to acquire loans elsewhere. The emergency EIDL Grants also provide fund loan advances of $10,000 within three days of application.
Emergency Loans for Hotel Owners
Emergency loans can be given only to eligible businesses. Borrowers must be U.S. companies and should retain through September 2020, 90 percent of its size as of March 24, 2020.
The CARES Act will surely help struggling businesses, but it’s important to understand the programs before applying for them. Want to stay up-to-date with all the latest hospitality news and trends? Then get the information you need by meeting and connecting with all the top California lodging professionals at the California Lodging Investment Conference. Contact us today to learn more about this fantastic informational and networking event.