Thank you, James.
I guess it's twofold. As soon as this started to happen, as soon we got into this, we went very aggressively to every one of our banks—we have mortgages on all of our properties—and they did give us a deferral. They gave us somewhere between a three-month to a six-month deferral. The problem with this part of it is that for the deferral you're going to have to pay for it. As for what they didn't do, they haven't set up the terms of what we have to pay and when we have to pay.
I talked to one of my franchisees yesterday and he said it's great. His mortgage payments are $150,000 a month on a very big property in Montreal. After three months, that's $450,000. He got the deferral. What he hasn't got from the bank is when they are going to start asking for it back. He says that if they start in October, giving him the six months, his mortgage payments are going to be $150,000. The deferral part, which they only wanted to say is for a year, adds $40,000 a month. He says, “I'm going to be so under water at that point that it doesn't matter.”
Banks aren't talking about any kind of abatement. They're only talking about deferral, which is really causing stress for my franchisees. If they had sat down and said.... I have some retail tenants, and some tenants as well, that I'm giving deferrals to, where I say, “Here's the deferral and, starting January 1, 2021, if the balance of the term of your lease is five years, I'll take that deferral and amortize it over the balance of the five years.” It doesn't hit them as hard. I'm trying to see if the banks are going to do the same thing. I haven't seen that yet. They really haven't come up with a program on that side of it.
With respect to the government assistance, it's threefold. The $40,000 assistance, which is great, I have to tell you.... You get $40,000 and it helps you pay for rent and some staffing and whatnot, and you only pay back $30,000. That seems to be coming very quickly. I'm talking to different guys. They do the application and it's a very quick turnaround, which is great.
The problem is that for the two other loans, one being the COVID working capital loan, which EDC has capped at $2 million, as I said before, it's a very tough process to qualify. It is based on need, but they're looking to tack it on to the existing mortgage you have. It just makes it too tough. We're kicking the can down the road, which I've said. On the $6.25-million loan, I'm hoping—and I know that Susie Grynol from HAC was very passionate about this—to get it set up so that it's on a per property basis versus a corporate need basis. I have franchisees who own 10 hotels. With $6.25 million as a cap, it doesn't go a long way. Again, the problem is qualifying for that. We feel that has to be 100% guaranteed.
That's my issue with the banks, James.