More HELP needed

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Good afternoon,

Delaware’s  Hospitality Emergency Loan Program (HELP)  provides  a ray of hope for an industry that was hard hit by the state’s coronavirus emergency declarations and a sinking economy.

The  program aims to help establishments with less $1.5 million in revenues, with interest-free loans and deferred payments.

But hospitality is a large and complex industry and the $1.5 million limit needs to be adjusted upward. The program also needs to be extended to all small businesses that have been ordered to shut down or restrict operations.  That’s the case being put forward by the Delaware Hotel and Lodging Association, which is now pushing for an expansion of the program to establishments with up to $10 million in revenues with loan maximums to match.

Hotels, like airlines, have seen revenues crash and burn,  and both are seeking a federal bailout package. How the money would make its way hospitality franchisees, staffs etc. remains unclear. The airline industry has a  big problem that hurts their argument – resentment over fees for everything other than using the bathroom. Little of the billions of dollars in extra revenue was set aside for times like these.

The hotel industry has a similar problem outside Delaware,  resort fees in popular destinations that can add $40 a day to the hotel bill. 

In Delaware, local units of government piled on by passing an up to three percent room tax. Once things improve, a total tax of up to 11 percent will be a barrier in attracting travelers.

Regardless of what happens on Capitol Hill,  an expansion of Delaware’s  HELP program to include hotels, retailers and service businesses that have been forced to close their doors or sharply reduce operations is needed.

One Monday Maryland Gov. Larry Hogan rolled out a $175 million program aimed at helping small businesses.

The $175 million figure includes some money already available from existing programs. A quick glance at the program shows that some of the assistance is modest.

Adjusting for Delaware’s population,  a similar program would come with a  $25 million to $30 million price tag.

The above number is a good start, especially if the funds could be leveraged with below-market interest rate loans from financial institutions.  On the federal level, the  Small Business Administration is working to reduce paperwork and other barriers.

There have been reports that the Carney Administration plans to expand its efforts to aid businesses that have been hammered by coronavirus and state efforts to limit its spread.

Help cannot come too soon.

Agree or disagree? –  let me know. Simply hit reply and type away. – Doug Rainey, chief content officer.

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