Governor announces HELP for hospitality industry

The Route 1 toll lanes are closed on Wednesday. (Delaware State News/Marc Clery)

DOVER — Gov. John Carney outlined a new loan program and modified state of emergency restrictions Wednesday in an effort to help the hospitality industry operate under mandates to limit the spread of the coronavirus.

Under the Hospitality Emergency Loan Program (HELP), businesses will be eligible to receive state support in paying rent, utilities and other significant overheads.

“This is a very difficult time for businesses, particularly in the hospitality sector, given the challenges they’re having towards revenue,” said Damian DeStefano, director of the Division of Small Business. “What this program is meant to do is try to provide some short-term relief towards businesses that are facing expenses but don’t have the revenue they expected to have to cover those expenses.”

HELP comes just two days after Gov. John Carney banned all gatherings of at least 50 people, while also limiting restaurants and similar establishments to takeout and delivery services only.

On Wednesday, Gov. Carney also required the closure of bowling alleys, movie theaters, fitness centers and health spas in a continued effort to prevent the spread of COVID-19. The update goes into effect at 8 a.m. Thursday.

Hospitality businesses will be able to apply to HELP for up to $10,000 in loans per business per month. While the money can be used for rent, utilities and “other unavoidable bills,” it cannot be used for personnel costs, officials said.

The no-interest loans have a 10-year term with payments deferred for nine months.

“We didn’t want to do something where the burden on the business owner to pay it back would be so great that we’re, on the back end, hurting them,” he said.

The Division of Small Business will administer the program using existing state funds. An application should be online in the next 24 hours, Mr. Stefano said, adding that he hopes businesses will have a response within a week of their application.

Businesses will request funds on a month-by-month basis. To be eligible, businesses must have been in operation for at least a year, have annual revenue below $1.5 million and be in certain hospitality-connected industries, officials said.

Businesses also must be current for a majority of its payments in the last year. When a business applies for financial support, it cannot be past due on its most recent payment on that bill, Mr. DeStefano said.

“We don’t want to be providing funds to somebody who, six months prior to this, was not making payments. So we’re verifying that they’ve been current on that bill, and then they can get coverage for it,” Mr. DeStefano said. “Once they come back to us, and we’ve already entered that process and it’s the same bill they’re applying for reimbursement for, it’s going be much more quicker to get them the next month.”

As part his state of emergency modification Wednesday, Gov. Carney announced that businesses, such as restaurants, brewpubs, taverns or taprooms, are permitted to sell alcohol as part of take-out or drive-through services. Only businesses with valid on-premise license to sell alcohol can do so, and alcoholic beverages cannot be sold as part of transactions for delivery food service.

Under the emergency declaration, alcohol sales cannot exceed 40 percent of the total sales transaction. All other rules and regulations regarding the take-out of alcoholic beverages apply, including that containers must be securely closed. Alcoholic beverages cannot be consumed on-site, neither indoors nor outdoors.

When Gov. Carney announced the restriction on restaurants, bars and other businesses earlier this week, he formally requested the Economic Injury Declaration from U.S. Small Business Administration. The request is still pending.

Once the state’s application to the SBA is approved, low-interest loans of up to $2 million per business will be available for many small businesses and nonprofits that have suffered substantial injury as a result of the outbreak.

Businesses can be eligible for both the SBA loan and the HELP program, Mr. DeStefano said.

“[HELP] is for immediate needs, short needs, with a little bit quicker turnaround,” he said.

In response to this week’s restrictions, many local establishments determined whether to operate in a limited capacity or to close their doors temporarily. Businesses that did the latter are still eligible for HELP, Mr. DeStefano said.

“The goal of the program is to make sure as many of our businesses in the hospitality industry are still around when we do enter the recovery period,” he said.

Employees impacted by the COVID-19 outbreak are eligible for unemployment benefits.

The Department of Labor will process unemployment claims as the department receives them, with the goal of benefits becoming available within a week.

Employees with part time income will be able to collect benefits as long as they can demonstrate decreased hours and earning. The department will not classify tipped employees as minimum wage earners; their tips must be reported as wages.

If an employer needs to curtail or shut down operations temporarily because of the virus or the limitations due to the state of emergency, workers will be eligible to receive benefits.

Those who have been instructed by a doctor to self-quarantine will be eligible. Parents or guardians forced to quit or take unpaid leave from their jobs to care for children due to the emergency closure of schools and workers who have been forced to quit or take unpaid leave to care for a loved one who has contracted coronavirus will also be eligible.

An individual who becomes sick from the virus and is unable to work may be eligible for benefits.

Helpful Coronavirus links

Delaware Division of Health Coronavirus Page
CDC: About the Coronavirus Disease 2019
CDC: What to do if You Are Sick
Johns Hopkins Coronavirus Resource Center
AP News Coronavirus Coverage
Reopening Delaware: Resources for Businesses
Delaware Phase 2 guidance

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