ASTA: Small business bailout funds have run dry: Travel Weekly

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ASTA says funding for the Small Business Administration’s Wage Protection Program and Economic Disaster Emergency Loan Program has largely dried up. The travel agent trade group is lobbying Congress to replenish funding for the two.

During a media call Thursday, ASTA Executive Vice President of Advocacy Eben Peck said the Society has spent a lot of time helping members apply for benefits under the Act. aid, relief and economic security (Cares) against coronaviruses since its promulgation at the end of March. It comes after weeks of lobbying for the inclusion of travel agencies in the federal relief program.

Peck called the Cares Act’s implementation “chaotic” and “messy,” and said Congress will need to revisit the Cares Act in addition to considering another set of relief measures.

The $ 349 billion-funded payroll protection program was designed to help small businesses keep workers on their payroll. Businesses with 500 or fewer employees, including independent contractors and self-employed workers, could apply for the program, which provided loans of up to $ 10 million.

Peck said the program “is essentially cash-strapped at this point.”

The payroll protection program has also been plagued with website and bank outages limiting who they will work with on loans, ASTA said.

ASTA is pushing for several changes to the payroll protection program. The Company estimates that the employee eligibility cap should be 2,000, that funding should be increased to $ 750 billion, and that the maximum loan threshold should be increased from 250% of monthly payroll to 400% of all business expenses.

The Company has created a base portal
for members to reach out to lawmakers and urge them to fund and fix the payroll protection program.

Under the Emergency Economic Damage Program, small businesses and insurance companies were eligible to apply for emergency economic damage disaster loans. While they waited for their loans to be processed, they would receive a subsidy of $ 10,000 for payroll and other immediate operating expenses.

But Peck said the program was overwhelmed and had dried up. Member comments and news reports revealed that emergency grants were capped by the SBA at $ 1,000 per employee and that total loans were capped at $ 15,000, while the maximum loan amount was initially set at $ 2 million. ASTA has called for an additional $ 50 billion to be invested in the program.

Peck expects Congress to work on an “interim round” of funding to address dried up loan programs. Congress is currently on recess until May 4.

Democrats and Republicans want to replenish funds using unanimous consent, which means Senators and Representatives wouldn’t have to return to Washington to vote in person. Democrats want to do it too, Peck said, but they want to add funds for hospitals and state governments.

He believes that a provisional package will be adopted in the “near future”, before a potential fourth round of federal relief is introduced.

The disorder of unemployment claims

For the first time, the Cares Act granted unemployment benefits to the self-employed. For the travel industry, that largely means independent contractors.

States were tasked with accommodating jobless claims from independent contractors, but states were not equipped to do so, ASTA Attorney General Peter Lobasso said. He said the Company had received reports from independent contractors that states had not been able to process their claims, leading to frustration.

ASTA tries to help independent contractors with state level resources and provide frequent updates. Lobasso hopes the situation will be resolved soon.

There is a silver lining: Utah announced on April 15 that self-employed workers can now claim unemployment.

Financing of major travel agencies

The Cares Act created a $ 500 billion emergency stabilization fund of loans and loan guarantees overseen by the Treasury Department. Of this amount, $ 46 billion has been set aside for airlines and associated airlines, as well as “ticket agents” or travel agencies.

Peck said the funds were intended for larger travel companies that could not take advantage of other Cares Act assistance initiatives for small and medium-sized businesses. Applications are due April 17, but Peck said late applications will be accepted by April 30.

ASTA said some of its most important members are applying and the Society will monitor the situation in the future.

Round 4 of relief funding?

Peck said Congress is scheduled to meet again on May 4. Depending on the progress of the pandemic, he said, it is possible that this will be pushed back further.

While a fourth cycle of coronavirus relief is expected, it’s hard to say exactly when, he said. The most likely period is mid-May.

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