Tourism Financing Assistance — Operating Loan
Highlights
This program is designed specifically for tourism operators like you in Prince Edward Island. It offers long-term, intermediate-term, and operating loans to help you purchase, expand, or update your business. Whether you need to buy new equipment, construct new facilities, or prepare for the tourist season, this program has you covered.
Key Benefits:
- Long-term loans for up to 20 years for major purchases and expansions.
- Intermediate-term loans for up to 10 years for asset improvements.
- Operating loans with up to 100% financing for pre-season preparations.
What's in it for you? This program provides flexible financing options that can cover up to 80% of the asset's value, making it easier for you to manage your cash flow and invest in your business. Plus, the focus on extending the tourist season means you can attract more visitors and increase your revenue year-round. Qualifying is straightforward, ensuring you can quickly access the funds you need to grow and succeed.
Financing Details
Type of Financing: Long Term Loan, Intermediate Term Loan, Operating Loan
Repayment Terms and Interest Rates:
Long Term Loan:
- Amortization period up to 20 years.
- Loans shall not exceed 80% of the fair market value or purchase price of the asset(s).
Intermediate Term Loan:
- Amortization period up to 10 years.
- Loans are for asset improvements, excluding non-income generating vehicles.
Operating Loan:
- Up to 100% financing for pre-season preparation of tourist facilities.
Eligible Expenses:
- Purchase of machinery, equipment, real property, and buildings.
- New construction, expansion, repair, or updating of fixed assets.
- Operating capital for seasonal start-up in the tourism sector.
Ineligible Expenses:
- Vehicles that do not directly contribute to the business's income or sales.
- Bed and breakfast operations as defined by the Tourism Industry Act Regulations.
Fees:
- No specific fees mentioned. Please contact Finance PEI for detailed fee information.
Qualifications
- Must carry on business, or intend to carry on business, in Prince Edward Island.
- Must operate a business that holds a valid tourism establishment license issued pursuant to the Tourism Industry Act Regulations.
- Accommodation operations must have a minimum of three lodging units, once complete, to qualify for capital financing.
Upon completion of the project, the business must have a minimum two and one half (2½) star rating under the Canada Select Accommodation Rating Program.
Disqualifications:
- Bed and breakfast operations, as defined by the Tourism Industry Act Regulations, are not eligible.
- Vehicles that do not directly contribute to the business's income or sales are not eligible.
Description
This program offers your business a chance to borrow money for various needs. You can use the funds to buy a business, expand, build new facilities, or repair and update existing ones. The loans can cover machinery, equipment, real estate, and buildings.
Key benefits include:
- Long-term loans: You can borrow up to 80% of the asset's value for up to 20 years.
- Intermediate-term loans: These are available for up to 10 years, ideal for asset improvements.
- Operating loans: You can get up to 100% financing for pre-season preparations.
Projects that extend the tourist season are highly encouraged. For example, creating recreational complexes with entertainment, lodging, and dining facilities.
Conditions to note:
- Your project must achieve a minimum 2.5-star rating under the Canada Select Accommodation Rating Program.
- Accommodation operations need at least three lodging units to qualify.
- Bed and breakfast operations are not eligible.
This program is a great opportunity to grow and improve your business with flexible financing options tailored to your needs.
Program Steps
Gather Required Documentation:
- Financial statements (last 3 years)
- Business plan
- Details of intended use of funds (e.g., quotes for machinery, equipment, real property, or buildings)
- Valid tourism establishment license
- Proof of minimum two and one half (2½) star rating under the Canada Select Accommodation Rating Program (if applicable)
- Any additional documents required by Finance PEI
Complete the Application Form:
- Obtain the application form from Finance PEI’s website or office.
- Fill out all sections accurately, providing detailed information about your business and the project.
Review Loan Terms and Conditions:
- Understand the loan terms, including the amortization period, interest rates, and repayment schedule.
- Ensure the loan amount does not exceed 80% of the fair market value or purchase price of the asset(s) being financed.
Submit the Application:
- Submit the completed application form along with all required documentation to Finance PEI.
- Ensure all information is accurate and complete to avoid delays.
Attend Follow-Up Meetings:
- Be prepared for possible follow-up meetings or discussions with Finance PEI representatives.
- Provide any additional information or clarification as requested.
Await Approval:
- Finance PEI will review your application and documentation.
- They may contact you for further details or to discuss the loan terms.
Receive Loan Disbursement:
- Upon approval, review and agree to the final loan terms.
- Once agreed, the loan funds will be disbursed, allowing you to proceed with your project.
Implement the Project:
- Use the loan funds as specified in your application.
- Ensure the project meets all requirements, including the minimum star rating and lodging unit criteria.
Maintain Communication:
- Keep in touch with Finance PEI throughout the project.
- Provide updates and reports as required.
Repay the Loan:
- Follow the agreed repayment schedule.
- Ensure timely payments to maintain a good standing with Finance PEI.