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BHA President speaks on Good Stays’ SSB Loan

The Social Security Board is contemplating whether it will provide a loan facility of 200 thousand dollars to Good Stays Hotel Limited. It is a start-up hotel, located off the Bullet Tree Road in the Cayo District. The company, owned by Ruben Recinos, is hoping the SSB greenlights this loan for capital expenditures. Yesterday, the media asked the Belize Hotel Association’s President, Reynaldo Malik, whether Good Stays is a member of the association and whether the loan proposal is a sound investment. Malik said that he sees the wisdom of the SSB to improve its investment profile but also hears the cries of the contributors. Here’s how he squared it off.

Reynaldo Malik, President, Belize Hotel Association: “I’m not aware of any other member of the BHA or any other hotel for that matter or groups that have applied to the SSB. But I think you used the perfect word. It’s an application and my understanding of the application is that the way the process works is that SSB puts it out in the public domain so that it can be discussed. Case in point is the loan that was applied for in the medical industry and after, I’m not going to say public outcry, but there were presentations from the Ministry of Health itself which said I don’t think that it fits. So in this case in terms of good stay, I’ve seen the comments. I’ve heard people say why can’t they just go to a bank? Listen. When you’re in the private sector, you’re always looking for the lowest rate that you can find on borrowing money. That’s the way business is. I’m not going to go borrow a commercial loan at 12% when I can get something at 8% or 6%. That’s the nature of it. Individually, even on your personal side, if you can get a house mortgage at 6% and the other guy is offering you at 8, you’re going to go at 6%. So the question of why people are going to the SSB, if the SSB is putting out there, if the DFC puts out there a much lower rate then that’s what’s going to attract the attention of potential borrowers. It is up to the SSB, the responsibility of theirs to determine whether that particular application is going to be able to repay that loan because at the end of the day, again, I hear the cries. It is the public purse because it is our, all of you guys, mine, a very hefty sum of it now that’s being raised that goes into the SSB fund.”

In July last year, Good Stays applied for a loan of 390 thousand dollars, which was unanimously approved by the Social Security Board in October. The board, we understand, has lent the company 597 thousand 400 dollars. Collateral value including capital investment is about 1.8 million dollars, which gives a loan-to-value ratio of thirty percent. The hotel is expected to open later this month and applications for jobs are already being accepted.