CARES Act Provides Much Needed Relief To Hotel Owners

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Congress formally passed the CARES Act on March 27, 2020. It will provide over $2 trillion in economic assistance to individuals, specific industries, and small businesses to help stimulate the national economy which has experienced historic layoffs and business contraction due to COVID-19.
As it relates to the hotel industry, the primary method of financial relief designated by the CARES Act will be through Small Business Administration lending programs, namely the “Economic Injury Disaster Loan” (EIDL) and an expansion of the established “7(a) Loan Guaranty Program” through what is being called “Paycheck Protection Loans.”
Below is a basic summary of the two loan programs:
US Hotel Advisors is currently looking into how these programs will work within the CMBS construct. There are certain organizational structures that may work “as is” and other structures that may require an SPE provision waiver from your servicer. There are also ways your management company (related or unrelated) may provide a separate avenue for CARES Act funding. Please do not hesitate to reach out with any questions.
For additional resources, below are links to COVID-19 Response Websites of two well respected law firms that US Hotel Advisors works with extensively:

Disclaimer

US Hotel Advisors is not a law firm. The information provided in this email does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available are for general informational purposes only. Information in this email may not constitute the most up-to-date information. Readers of this email should contact their attorney to obtain advice with respect to any particular legal matter. No reader of this email should act or refrain from acting on the basis of information provided without first seeking legal advice from counsel in the relevant jurisdiction. Only your individual attorney can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation.
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