ASTA: Rescue funds for small businesses have dried up

ASTA: Rescue funds for small businesses have dried up
Photo Credit: Rudall30/

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

During a media call on Thursday, ASTA executive vice president of advocacy Eben Peck said the Society has spent much time helping members apply for benefits under the Coronavirus Aid, Relief and Economic Security (Cares) Act since it was signed into law in late March. That comes after weeks of lobbying for travel agencies’ inclusion in the federal relief package.

Peck called the implementation of the Cares Act “chaotic” and “messy,” and said Congress will have to revisit the Cares Act in addition to mulling another round of relief.

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

Peck said that program “is essentially out of money at this point.”

The Payroll Protection Program has also been plagued with website crashes and banks limiting who they will work with on loans, ASTA said.

ASTA is lobbying for several changes to the Payroll Protection Program. The Society believes the employee cap for eligibility should be 2,000, funding should be increased to $750 billion and the maximum loan threshold should be increased from 250% of monthly payroll to 400% of all business expenses.

The Society has created a grassroots portal for members to contact lawmakers and urge them to fund and fix the Payroll Protection Program.

Under the Emergency Economic Injury Program, small businesses and ICs were eligible to apply for Emergency Economic Injury Disaster Loans. While they waited for their loans to be processed, they would be issued a $10,000 grant for payroll and other immediate operating expenses.

But Peck said the program was overwhelmed and has run dry. Member feedback and news reports revealed the emergency grants were capped by the SBA at $1,000 per employee and total loans were limited to $15,000, when maximum loans were originally envisioned to be $2 million. ASTA has asked that another $50 billion be put into the program.

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

Democrats and Republicans want to replenish the funds using unanimous consent, meaning senators and representatives would not have to return to Washington to vote in person. The Democrats also want to do that, Peck said, but they want to add funding for hospitals and state governments. 

He believes an interim package will be passed in the “near future,” before a potential fourth round of federal relief is introduced.

The unemployment claims mess

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

States were instructed to accommodate unemployment claims from independent contractors, but the states weren’t equipped to do so, said ASTA general counsel Peter Lobasso. He said the Society has received reports from independent contractors that states haven’t been able to process their claims, which has led to frustration.

ASTA is attempting to assist independent contractors  with state-level resources and providing frequent updates. Lobasso hopes the situation will soon be resolved. 

There is a glimmer of hope: Utah announced on April 15 that self-employed workers can now apply for unemployment.

Funding for big travel agencies

The Cares Act established a $500 billion Emergency Stabilization Fund of loans and loan guarantees overseen by the Treasury Department. Of that, $46 billion was carved out for airlines and related aviation companies plus “ticket agents,” or travel agencies. 

Peck said those funds are aimed at the largest travel agencies that could not take advantage of the other relief initiatives in the Cares Act for small and mid-sized businesses. Applications are due on April 17, but Peck said late applications will be accepted by April 30.

ASTA said some of its larger members are applying, and the Society will monitor the situation going forward.

Round 4 of relief funding?

Peck said Congress is expected to reconvene May 4. Depending on the pandemic’s progress, he said, it’s possible that could be pushed further back.

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


From Our Partners

From Our Partners

An Insider’s Look at the Globus family of brands and Avalon Waterways, featuring Camille Olivere
An Insider’s Look at the Globus family of brands and Avalon Waterways, featuring Camille Olivere
Watch Now
The Luxury Advisor
The Luxury Advisor
Read More
KLM Introduces Premium Comfort
KLM Introduces Premium Comfort
Watch Now

JDS Travel News JDS Viewpoints JDS Africa/MI