How it Works
How to secure HIF funding
HIF OBJECTIVE AND OVERVIEW
The objective of the fund is to provide financial support to hotels who have been affected by the COVID-19 pandemic or those that have had to defer investment plans which they now need to grow their business.
The fund will support hotels with unsecured gap funding to facilitate recovery or growth of their business.
The financial support for hotels will be for a three year period, with the potential to extend this in certain circumstances. Pembroke Hospitality and BVP Investments will manage the HIF’s €50m fund.
USE OF FUNDS ADVANCED BY HIF
The HIF can advance funding under three criteria:
- Working capital funding
- Capital investment funding
- Environmentally sustainable investment funding
Funds advanced by HIF will be by way of a three year preference equity investment, with no interest payable until redemption at the end of the term.
INVESTMENT SUPPORT POTENTIAL
The HIF can advance a maximum of up to €5m in funding to a single hotel or hotel group with minimum funding at €500k.
PROCESS TOWARDS FINALISING FUNDING SUPPORT FORM HIF
There is a staged process towards a funding agreement between a hotel and HIF as follows:
- Stage 1: Initial application
- Stage 2: Initial analysis by HIF of hotel financials and shareholder structure
- Stage 3: Term Sheet issued by HIF to hotel owner, outlining indicative financing terms
- Stage 4: HIF Investment Committee approval of financing
- Stage 5: Execution of legal documents
- Stage 6: Funds issued
HIF MONITORING POST-FUNDING
A hotel that receives funding support from HIF will be subject to on-going monitoring until such time as it repays the funds advanced.
Hotel monitoring will comprise of an agreed plan with the hotel prior to funding support, designed to confirm a pathway whereby the hotel can recover, meet its financial obligations and repay the HIF funds advanced.
FUNDING EXTENSIONS
The HIF Investment Committee can grant extension periods to hotels that have been unable to recover sufficiently within the time frame envisaged in certain circumstances.
DEFAULT PROVISIONS
HIF investments will be in the form of a legal agreement with the hotel owner which will outline the rights of the HIF in the event of default.