Travel advisors will soon be getting some much-needed financial relief.
The historic $2 trillion Coronavirus Aid, Relief and Economic Security (CARES) Act — which was signed into law by President Trump today — is the largest and most expensive legislation in U.S. history.
It also offers several avenues for travel agencies to apply for financial assistance if they have been negatively affected by the coronavirus pandemic.
More than 7,000 American Society of Travel Advisors (ASTA) members tuned in today to the association’s webinar “The CARES Act – Overview of Financial Relief Options for Your Business,” where ASTA executives gave updates on the results of their lobbying efforts and provided guidance on how to apply for financial relief.
Zane Kerby, president and CEO of ASTA, opened the webinar with some positive press, revealing that travel agents have topped Politico’s list of “Who Got Special Deals in the Stimulus and Why They Got Them.”
“You usually do not want to read your own name on Politico’s pages or on its website,” Kerby said. “We’ll forgive them for not referring to us as advisors, but make no mistake: ASTA’s unprecedented advocacy campaign is the reason for this.”
Make no mistake: ASTA’s unprecedented advocacy campaign is the reason for this.
In addition to in-person testimony in front of Congress’ Small Business Administration (SBA), a staggering total of 28,604 emails and phone calls from ASTA members went out to legislators over the past few weeks, shattering the association’s previous record for grassroots engagement (previously held by the fight against California’s AB5 legislation in 2019, during which 2,998 members contacted their state legislators).
“This is what we are built for,” Kerby said. “No one could have predicted today’s pandemic, but this crisis underscores the need for collective action and to speak with one voice. For anyone who sells or dispenses travel advice for a living, your voice is ASTA, bar none.”
Eben Peck, ASTA’s executive vice president for advocacy, said this crisis is unprecedented — and there was no playbook to turn to before lobbying Congress.
“If Congress was going to give any targeted relief to the travel industry, travel agencies had to be included,” Peck said. “And we had to have as many options for our members to get financial relief as possible.”
The CARES Act outlines multiple avenues travel advisors can take to petition for relief. Here’s how to tell what you or your agency can qualify for.
For Independent Contractors (ICs)
Through Dec. 31, 2020, ICs who meet a certain set of criteria can receive benefits through their state unemployment programs to the same extent that they would if they were W-2 employees.
Under normal circumstances, ICs who file under 1099 status are not qualified to claim for these benefits, according to Peter Lobasso, senior vice president and general counsel for ASTA.
“However, the CARES Act recognizes that there are people whose income has been decimated by the crisis, so it offers relief for them, too,” Lobasso said.
Circumstances that must be met include proving that an IC is able and available to work if it were not for the COVID-19 crisis. This may include having to care for a family member who has been diagnosed, needing to self-quarantine or being unable to reach work. (Lobasso predicts that these criteria will be loosely enforced.)
No one could have predicted today’s pandemic, but this crisis underscores the need for collective action and to speak with one voice. For anyone who sells or dispenses travel advice for a living, your voice is ASTA, bar none.
The application process and amount of benefits received will vary by state, but will be based on the IC’s net income for 2019. ICs will also be eligible to receive an additional $600 per week for up to four months, which is available regardless if the individual was previously earning less.
To apply for these benefits: ICs should contact their state’s unemployment benefits agency. Applicants should expect delays while the state governments adapt to this new program.
For Travel Agencies With Fewer Than 500 Employees
Agencies with fewer than 500 employees will have access to both a pre-coronavirus-era SBA Economic Injury Disaster Loan Program and a brand-new SBA Business Interruption Loan program designed specifically for the crisis.
SBA Economic Injury Disaster Loan Program: Under the existing SBA program, for-profit businesses can request loans of up to $2 million offered at a 3.75% interest rate for a maximum term of 30 years. These loans are available to both ICs and self-employed individuals, as well.
Additionally, several updates to this program have been made since the coronavirus outbreak, including increased funding and wider availability. (Currently, because all U.S. states and territories have been declared disaster areas, there will be no limitations to these loans based on an agency’s location.)
SBA Business Interruption Loans (New): What's more, a brand-new, $349 billion program will offer loans of up to $10 million to businesses that either bring in less than $22 million in revenue or have fewer than 500 employees.
What makes this new program especially appealing, according to Genevieve Strand, director of advocacy for ASTA, is that loans are available to a wider pool of people than those of the existing SBA programs, and that they do not require proof of collateral or personal guarantee.
And although the new program is not a grant, there is some loan forgiveness built in. The portion of the fixed low-interest-rate loan that would cover businesses’ payroll, mortgage, rent or utility expenses from Feb. 15 to June 30, 2020, will be eligible to be forgiven in whole or in part if advisors meet a certain set of criteria. (These criteria, in addition to a list of FAQs about the specifics of SBA loans, will be made available to ASTA members on its new resource website).
To apply for these benefits: Applications for SBA loans are currently available online at the Small Business Administration’s website. Paper applications are also available, but processing times are considerably slower.
For Travel Agencies With More Than 500 Employees
Large agencies not eligible for the SBA’s loans will have additional options under the CARES Act.
In addition to qualifying for relief through the $25 billion airline economic stabilization loan, large travel agencies may be eligible for an additional $454 billion in loan and loan guarantees to support businesses not receiving adequate relief through other loan programs.
These loans will be offered to agencies at pre-coronavirus interest rates with payback terms of up to five years and without the option for loan forgiveness. To qualify for this assistance, agencies must be able to prove that alternative forms of financing are not readily available.
To apply for these benefits:Application guidelines are not yet available but will be released by the U.S. Treasury Department within 10 days of the program’s enactment.
Additional Resources From ASTA
- ASTA provides updated COVID-19 webinars every Monday at 3 p.m.
- Members can access a wide variety of coronavirus resources (including analysis of the CARES Act, an FAQ page about how to apply for financial relief and more) at a new members-only website.
- ASTA Premium Members will also have access to the association’s general counsel and government affairs team.
American Society of Travel Advisors