Hotel loan program extended through June 2023
Hotels trying to recover from closing down for the Covid-19 pandemic are getting a little extra financial help. The Thai Cabinet has decided to extend low-interest soft loans until June 2023. The loans were created to help hotels address property repairs after many opted to close when customers dried up because the borders closed amid the pandemic.
The announcement was made this morning to extend the program from September 2022 to June 2023, as well as soften some of the requirements. The move is aimed at getting small and medium enterprise (SME) hotels back on their feet after the pandemic. Nearly three years of closure have left many small properties in decay, crumbling under lack of maintenance and revenue to support upkeep.
The loans for small hotels have friendly terms to help businesses reinvest in their properties and get them back up to speed as tourism grows around the country. They offer low-interest and deferred payments. The extension was approved by Minister of Finance Arkhom Termpittayapaisith and was allocated a budget of five billion baht to reinvest in hotels in Thailand.
The original programme was launched in June earlier this year. It offered two years of interest-only payment, and then another five years on top of that to repay the loans. The loans are offered through Government Savings Bank. The Thai government would pay interest of 2% per year for the first two years, capped at a total of 200 million baht in financial easement for GSB.
Now the programme is being extended and expanded, softening requirements to allow more hotels to qualify for the loans. Properties that are still stuck in the gruelling process of obtaining a business license would now be included as eligible for the loans. The profit consideration period has been extended to five years from the original three. Loan officers will factor in what income a property is producing when determining repayment terms.
To qualify, an applicant must be the owner-operator of a hotel or an SME business in the sector. They must either be a Thai registered corporation where more than 50% is owned by Thai nationals or an individual Thai citizen. The Finance Minister explained the goal of opening up large loans to more small hotel businesses.
“The timeframe was extended and criteria eased to enable hoteliers to have working capital and increase their liquidity in carrying out their business. Entrepreneurs may apply for a 5 million baht loan each.”
