Improve Your Listing Success!
+1 (435) 631 2391
BOOK A DEMO
Lexicon Travel Technologies
  • Solutions
    • Channel Manager
    • Free Analysis
  • Partners
    • Channel Partners
    • PMS Partners
    • Memberships & Affiliations
  • Resources
    • Press
    • Blog
    • Case Studies
    • EBooks
    • Webinars
  • About
    • About Lexicon
    • Results
    • Our Team
    • Contact Us
    • Philanthropy
    • Careers
  • Solutions
    • Channel Manager
    • Free Analysis
  • Partners
    • Channel Partners
    • PMS Partners
    • Memberships & Affiliations
  • Resources
    • Press
    • Blog
    • Case Studies
    • EBooks
    • Webinars
  • About
    • About Lexicon
    • Results
    • Our Team
    • Contact Us
    • Philanthropy
    • Careers

Ideas that Help you Succeed

Blog (noun) blawg​
: a collection of experiences, observations and opinions to help the vacation rental industry​

4/16/2020

Understanding Aid Packages Available for Vacation Rental Managers

 
Picture
​Michelle Marquis, Chief Revenue Officer of Lexicon Travel Technologies
Joel Inman, Co-Founder & CEO of Lexicon Travel Technologies
Brooke Pfautz, Founder & CEO of Vintory
 
Brooke Pfautz, Founder & CEO of Vintory, has taken the time to learn the ins and outs of the aid packages available to vacation rental companies and shared his take on what to do. Below you will find information on the two main aid packages available: the Economic Injury Disaster Loan Program (EIDL), the Paycheck Protection Program (PPP), and additional aid packages that your company or owners might be able to apply for.
 
Disclaimer: New modifications are being added to these bills daily. It is recommended to reach out to your attorney or accountant for help in applying to these programs.

Economic Injury Disaster Program (EIDL)
 
With this program, loans can be approved up to $2 million and do not have to be used for just payroll – they can be used for funding multiple business operations. Additional $10k grants are available as well but are hard to receive currently.
 
Loan Details:
  • $10k Forgivable Grant
  • Can be approved for up to $2 million – this is based on what your company can afford to pay back as well as what your economic injury looks like
  • 3.75%. interest rate for for-profit businesses
  • 2.75% interest rate for non-profit businesses
  • Up to 30-year term
  • 1-year deferment – interest does accrue 
 
Criteria to be Approved:
  • Adversely affected by COVID-19 – your company will need to prove economic injury
  • Less than 500 employees (meant for small businesses) – including sole proprietorships and independent contractors
  • Credit-check required
  • Must show ability to repay the loan
 
Proving Economic Injury: For example, your company can show previous years revenue vs. current sales. You can also look at potential loss of revenue. Cancellations can be a sign of economic injury.
 
Use of Funds:
  • Fixed Debts
  • Payroll 
  • Accounts Payable
  • Other Bills
 
Collateral Requirements:
  • Personal Guarantee Loans over $200k – not secured with personal collateral 
  • Secured with GSA loans over $25k
 
The EIDL loan has an extremely low interest rate and can be used for multiple business operations, although a credit check is required. Association-ran rental programs do not qualify for EIDL and it looks as though individual owners cannot qualify for the loan either. Joel Inman stated, “They are being very, very lenient on the qualifications to apply. I would encourage everyone just to apply and let them tell you if you don’t qualify.”
 
You can apply for EIDL directly with SBA at covidrelief.sba.gov.
 

Paycheck Protection Program (PPP)
 
The PPP loan can be used for payroll, healthcare benefits, etc. but it is more geared towards payroll. Just like the EIDL, the interest rate is extremely low.
 
Loan Details:
  • 2.5 x Average Monthly Payroll (Max is $10 million)
  • 2-year term 
  • 1% interest rate
  • 6 months to a year deferment 
  • No credit-check
 
Criteria to be Approved:
  • Adversely affected by COVID-19 
  • SBA Defined Small Businesses – under 500 employees
  • Started business by 2/15/20
  • Sole Proprietors, Independent Contractors, or Self-Employed
 
Use of Funds:
  • Payroll
  • Healthcare Benefits
  • Business mortgage/rent/utilities
 
Collateral Requirements:
  • No Personal Guarantee 
  • No Collateral Required
 
Loss of Forgiveness:
  • Reduction in full-time employees
  • More that 25% spent on non-payroll
 
The PPP loan is a forgivable loan that is meant more for payroll, though it can be used for additional approved expenses. If you do not provide proof that you used the loan for approved expenses, then it will not be forgivable. “It does not hurt to go through multiple banks if you have the accessibility”, said Inman. 
 
You can apply for this loan with SBA Lenders at: https://www.sba.gov/paycheckprotection/find.

Online FiTech Co’s Processing is another source used for this loan, as well as: Divvy, Kabbage, Cross River, Lendio, and Intuit. Each of these companies has a different qualification process that might work for your company’s specific situation and needs. If you have a banking relationship, start there. Small community banks can process the loan quicker. 
 
 
Other Programs Available
 
Vacation rental companies might not qualify for these programs, but they can be offered to owners as additional resources.
 
State Programs
There are programs available for each specific state – talk to your accountant to see if your company can qualify.

Airbnb Aid
  • Committed $250 million in aid
  • Reservations booked on/before March 14th
  • Check-in between March 14 – April 31
  • Refund of 25% for normal cancellation

Airbnb Superhost Aid
  • $17 million in aid for Superhosts
  • Up to $5,000 grants for Superhosts
  • No more than TWO active listings 
  • Verified identity 
  • Superhost for one year +

Airbnb Superhost Aid
  • $340 million in ad credits
  • Have to be a small or medium size business - active advertisers since January 2019
  • Credit notification in their Google Ad Account in upcoming months

Goldman Sachs
  • $300 million in aid
  • $250 million in emergency loans to small/medium businesses
  • $50 million in grants 
  • No details on how to apply yet

Companies can apply for both the EIDL and PPP loans. “My understanding is as long as the funds are used for distinct things and very different uses, you can apply for both,” stated Brooke Pfautz. If you have the accessibility, it does not hurt to go through multiple banks to apply. You can apply, but you do not have to take the loan any bank offers. Just make sure to set up separate accounts and track everything, especially for forgivable loans. 
 
Don’t wait – apply for these loans as soon as possible.

Comments are closed.
Book A Demo
Client Dashboard

Picture
Privacy Policy  |  Terms & Conditions  |  © 2022 Lexicon Travel Technologies. All Rights Reserved.