The Des Moines hotel is among 29,242 Iowa small businesses to be approved for the loans
The Hilton Des Moines Downtown Hotel has been approved to receive a nearly $1.2 million loan through the Small Business Administration’s Paycheck Protection Program, the board of the nonprofit corporation that oversees the facility learned this morning.
The Iowa Events Center Hotel Corp. board, in a telephone meeting, unanimously approved a resolution giving board president Gerard Neugent authority to sign the loan papers. The loan is being processed by Sioux Falls, S.D.-based Great Western Bank, which holds a loan on the $101 million facility that opened in spring 2018.
The Paycheck Protection Program, which ran out of money Thursday, is designed to help companies cope with the fallout of the global pandemic. The program’s goal is to cover eight weeks of a small business’s payroll expenses, so the business can keep or rehire workers laid off for reasons related to COVID-19.
In Iowa, 29,424 small businesses have been approved to receive more than $4.3 billion from the program, new information released today by the SBA shows. The average size of a loan to an Iowa small business is $146,672, the data shows.
Overall, more than 1.66 million loans totaling $342.27 billion have been approved by nearly 5,000 lending institutions, according to the new SBA data.
About $350 billion was earmarked for the program in the $2 trillion federal coronavirus relief package signed into law in late March.
The SBA defines small businesses as those with 500 or fewer employees.
The downtown Hilton, at 435 Park St., has about 200 workers, according to the facility’s LinkedIn page.
The nonprofit Iowa Events Center Hotel Corp. was established by Polk County and Des Moines officials in partnership with Bankers Trust Co. The hotel’s construction was financed by a number of sources including tax increment financing, hotel-motel taxes, gaming revenues from Prairie Meadows Racetrack and Casino, and a loan from Polk County.
Polk County Administrator Mark Wandro told the board today that the hotel had been approved for the loan and that it had 10 business days to close the loan.
“Ideally we would begin paying all of the employees that were there before the coronavirus showed up,” Wandro said. The hotel is operating with a skeletal staff right now – primarily management, he said. Wandro said he didn’t know how many hotel workers had been laid off; a hotel official did not respond to a request for the information.
The occupancy rate of the hotel, which has 330 rooms, is about 15%, Wandro said. Hotel guests are primarily airline flight crews, he said.
The loans are forgivable provided 75% of the total amount borrowed is used for payroll expenses. If money from the loan isn’t used for qualified purposes, it must be repaid within two years at a 1% interest rate.
“If we can’t rehire our employees for the appropriate period, [the loan is] not forgivable,” Neugent said. “You have to repay it, but it’s a 1% loan. … It’s worth the risk.”
SBA’s Paycheck Protection Program report
The Small Business Administration today released updated information about the Paycheck Protection Program, which was authorized in the federal coronavirus relief package.
– 1,661,367 small businesses have been approved to receive $342.27 billion in loans through the program.
– The overall average loan size is $206,000.
– 24%, or 140,197, of the loans were for between $350,000 and $1 million; 17%, or 1.22 million, of the loans were for $150,000 or less.
– 13%, or $44.9 billion, of the loan money went to 177,905 businesses in the construction sector.
– 29,424 Iowa small businesses have been approved to receive more than $4.3 billion from the program.
To see more details about the program, click here.