Gov. Lou Leon Guerrero on Friday created a local version of the federal Paycheck Protection Program, with an initial $25 million funding amount to extend forgivable loans to Guam’s tourism-related businesses and other employers to enable them to keep and pay their workers.
The forgiveness component of the loan kicks in mainly when the money is used to cover employees' wages and benefits, with priority given to businesses hardest hit by the COVID-19 pandemic, such as tourism companies and others left out of other relief programs.
The governor signed an executive order establishing the Local Employers' Assistance Program, or LEAP, using $25 million in American Rescue Plan funds.
Senators intend to match the initial amount using the government of Guam general fund, for a total of $50 million, once a newly introduced bill becomes law.
"The holiday season is coming up so this is a real Christmas gift to all of us," Valley of The Latte Adventure Park managing director David Tydingco said.
Many employees, he said, continue to work only 20 hours a week, so LEAP would help increase their hours and salaries, and help them to be able to pay their bills.
For employers, LEAP would help ensure that the medical insurance that their workers rely on is covered and paid for. LEAP also seeks to keep the island's unemployment rate low.
The Valley of The Latte Adventure Park in Talo'fo'fo', Fish Eye Marine Park, other tourist attraction venues, museums, watersports operators, laundry services and retail stores were mostly left out of pandemic relief packages including the Restaurant Revitalization Fund and the Shuttered Venue Operations Grant.
They're among employers that would benefit from the LEAP program, Tydingco and Guam Dry Cleaners executive manager Simon Sanchez said.
"Businesses still need more help," the governor said at the signing of Executive Order 2021-25 at Adelup, adding that the COVID-19 pandemic has gone on for too long and is still wreaking havoc on the tourism economy.
LEAP is patterned after the federal PPP loan program, which means it has a forgiveness component attached to employment of people, Guam Economic Development Authority Administrator Melanie Mendiola said at the signing.
"So really, while it is a program for the businesses, it's a program for the people of Guam," she said.
GEDA is the lead agency in administering LEAP, subject to Adelup's oversight. GEDA's role includes creating the application and standard operating procedures.
Mendiola said GEDA will hold stakeholder meetings about the forgivable loan program in the next week or two.
Ensuring businesses are ready when tourists return
In the executive order, the governor said LEAP will ensure that people remain gainfully employed, creating a significant economic multiplier effect.
The governor and other officials also said Guam needs to ensure tourism-related businesses and other employers have skilled and trained workers already in place when tourists come back in droves.
A group of small businesses led by Tydingco and Sanchez has been making the rounds for about two weeks now, seeking support for a proposed $75 million grant program to offer direct aid to tourism-related entities and others not covered under federal pandemic relief programs.
At the ceremony on Friday, Sanchez and Tydingco thanked the governor and the Legislature for working together and for responding promptly to their request.
"We're best when we unite. We’re best when we work together," Sanchez, a former senator, said.
Sens. Amanda Shelton and Joe San Agustin, along with eight other senators, on Friday introduced Bill 214, which seeks to commit $25 million in GovGuam general fund money to help businesses and employees mostly hit by the pandemic.
The bill would appropriate the money to the Department of Administration for LEAP, turning it into a $50 million assistance program.
"Business leaders from our tourism sector called on us to work together — and the LEAP is the result of the collaboration of our island’s leadership that demonstrates our commitment to keep our people working and carry our businesses through this difficult time," Shelton, chairperson of the tourism committee, said in a statement.
San Agustin, ways and means chair, said the pandemic has hurt the entire community and businesses have been burning the candle at both ends.
"More needs to be done. We can’t fix things overnight — but the LEAP Act will provide much-needed relief and is an important step forward," San Agustin said.
The governor's LEAP replaces a program idea announced in June by the governor and Guam Department of Labor Director David Dell'Isola.
That program sought to subsidize the salary of workers, up to $9.25 an hour, for up to three months, so businesses can reopen or remain open in the midst of a pandemic especially after PUA ended.
Dell'Isola on Friday said LEAP is "taking the best of both programs into one."
Business organizations also welcomed LEAP, which they said will serve as a lifeline to thousands of employers and workers.
"We all know that this economic downturn has been excruciating for a lot of our small businesses so this LEAP program is going to not only allow manpower to restart businesses, but also allow us to decrease our unemployment rate and allow us to create gainful employment for the future of our economic prosperity," Guam Women's Chamber of Commerce President Laura Nelson said.
LEAP is also separate from GEDA's $20 million small business pandemic assistance grant program for 2021, the funding for which also comes from APR money.
Besides federal and local programs to help businesses, there have also been programs to help individuals and families such as the All RISE program and the Economic Impact Programs.