TCI News

Survey asks TCI Government to negotiate and support ‘survival’ loans for Tourism industry

#TurksandCaicosIslands, May 13, 2020 – Hassle-free loans with soft terms are a viable option to bring buoyancy to some of the tourism and hotel sector businesses in Turks and Caicos struggling to survive in the midst of a global pandemic caused by the coronavirus, revealed a new survey.

More than half of those who participated in an April survey, conducted by KPMG and commissioned by the Turks and Caicos Hotel and Tourism Association, TCHTA replied that ‘yes’, they would take out a loan.

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“Fifty-four per cent of employers said that they would choose to apply for additional debt if it can be made available on “soft terms” i.e. with no “red tape”, no additional security and where it is to be used for specific purposes. This does not take into account other sources of finance such as private equity, mezzanine finance etc.” said that survey which was, this week, issued to members of the TCHTA and media.

It is not a far-fetched prospect for the Turks and Caicos Islands Government to support the opportunity for companies to stay afloat amidst the public health crisis which has grounded travel indefinitely.  With so much at stake, the survey recommends that TCIG would do well to support a Staff Retention Program and government-backed loans.

“This is another suggestion that has been put forward to TCIG and HMG on behalf of TCHTA which is modelled on an initiative already introduced in the UK called a Coronavirus Business Interruption Loan scheme. In the UK 80% of such loans are backed by the government.  

Any initiative in TCI along these lines need not necessarily be exactly the same as the initiatives introduced in the UK but it appears from anecdotal evidence that something similar with a credit enhancement component e.g. a sovereign guarantee of some description will be needed to make more debt available in the prevailing circumstances and to entice employers to take on more debt to finance commitments to the program.”

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The suggestion, explained the report, is both practicable and internationally touted.

“This initiative put forward by TCHTA is also consistent with the actions that WTTC are advocating to global governments with substantial tourism industries.”

A government guaranteed loan scheme is however, not hugely popular for the membership of the TCHTA.  Some 46 per cent of those taking the survey expressed that they would not apply for a loan.

The survey was administered between April 12-20. Employers participating in the questionnaire represent 5,606 employees.

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