Tourism Assistance Loan Program
A funding program has been developed by the Province of PEI to support the PEI Tourism Operators through a joint partnership of Finance PEI and Tourism PEI. This new program will provide funding in the form of a repayable loan to qualified applicants. Interest payments on loans approved through this program will qualify for interest relief (interest payment made behalf of the client) from Tourism PEI for a period of 18 months with Finance PEI offering principal deferrals to match the same 18 month period.
The total obligation of the Government of Prince Edward Island under this Tourism Assistance Loan program will not exceed Fifty Million Dollars ($50,000,000) in loan principal, unless increased by the Government of Prince Edward Island. Finance PEI & Tourism PEI will accept applications under this program from April 18th, 2020 to December 31st, 2020.
Businesses that are in the process of Receivership as per the Canada’s Bankruptcy and Insolvency Act, or have been so in the past, are not eligible for this program.
The maximum cumulative loan to be issued under this program to a business or group of businesses under common control, as defined by the Canadian Income Tax Act, is $1 million. The physical tourism operation and its head office must be located on PEI. Further, all non-Canadian or publicly traded companies or company owned by the same are excluded from this program. Additionally, corporate operations of a franchise network with establishments located outside of PEI are excluded from this program.
Eligible applicants must be a ‘for profit entity’ operating within one of the following sectors:
- Licensed tourism accommodations (e.g. hotel, motel, bed and breakfast, inn, resort, cottage operations, campgrounds);
- Licensed tourism accommodations must be used for business activity and not, in whole or in part, for primary residential purposes;
- Food and beverage service (e.g. restaurant, bar, brewery);
- Local artisans and artists (e.g. pottery, artwork);
- Locally-owned retail and gift shops that cater primarily to Tourism;
- Attractions (e.g. museum);
- Tourism service/experience providers;
- Event companies;
- Adventure (e.g. kayaking, amusement park, golf); and/or
- Tour operator.
What are the Program Details?
- The Tourism Assistance Loan Program being offered though Finance PEI and Tourism PEI providing financing up to a maximum of $1 million for Island tourism operators (excluding non-profit organizations).
- Loans will have a 5 year term with a 4% interest rate, amortized over a maximum of 20 years.
- Principal loan repayment will be deferred for a maximum of eighteen (18) months from the 1st disbursement.
- Tourism PEI will pay the first eighteen (18) months’ interest payments from the date of first disbursement for loans approved under this program.
Loan approval process is subject to:
- Normal lending due diligence and lending practices of Finance PEI (i.e. requiring financial statements and business plan explaining the need for financing with ability to repay debt);
- Security including best available mortgage over fixed assets (if applicable), corporate and personal guarantees (guarantees exclude primary personal residence of shareholders);
- Term of five (5) years amortized over a period not to exceed 20 years;
- Maximum cumulative loans to a business or group of businesses under common control, as defined by the Canadian Income Tax Act shall not exceed $1 million.
What is the Process to Apply?
Eligible Tourism Operators on PEI will be required to submit Tourism Assistance Loan Program application and requested supporting documentation to Finance PEI (i.e. most recent financial statements, executive business plan, A/R and A/P, twelve month cashflow working analysis).
Successful applicants will be issued a letter of offer outlining the complete terms and conditions of the loan from their account manager.
What is the Payment Process?
Interest will be charged at 4%.
Following the eighteen (18) month period of interest payments provided by Tourism PEI and the deferral of principal for the same period, the approved client will then be responsible for both the interest and principal payments on this loan on a go forward basis until maturity.
- Total interest relief for this program to be issued by Tourism PEI will not exceed $3 million over the 18 month period for this program.
- Approved loans will be advanced over a period to match the cashflow requirements for the eligible tourism operation.
The program will be administered through a joint effort by both Finance PEI and Tourism PEI.
For information about loans for tourism assistance, contact firstname.lastname@example.org.