The American Society of Travel Advisors (ASTA) doubled down on its efforts to amend the problematic Payment Protection Program (PPP) by reaching out directly to the U.S. Small Business Administration (SBA).
The May 15 letter — addressed to SBA administrator Jovita Carranza and sent by Eben Peck, ASTA’s executive vice president of advocacy — addresses the SBA’s Interim Final Rule, which was released April 15 and outlines specific rules and regulations of the PPP. (Note: Interim final rules become effective immediately upon publication, but they may be altered if warranted by public comments).
“Today, ASTA is responding to the SBA requests for comments on the Paycheck Protection Program (PPP), the centerpiece of the CARES Act,” according to a statement from ASTA. “While the program has provided a critical financial lifeline to those of our member companies that have successfully been able to apply since its launch on April 3, there are numerous shortcomings with the PPP, some of which are within the SBA’s power to fix.”
While the program has provided a critical financial lifeline to those of our member companies that have successfully been able to apply since its launch on April 3, there are numerous shortcomings with the PPP, some of which are within the SBA’s power to fix.
In the correspondence, the association lays out concerns about the program’s impact on travel advisors and travel agencies, and asks for amendments to the program that will ensure its funds reach the individuals and businesses it was meant for, while allowing recipients to have increased flexibility on how these funds will be used. The PPP was originally designed to keep employees on payroll by providing low-interest, forgivable loans for businesses with 500 or fewer employees, independent contractors (ICs) or the self-employed.
Many of the PPP’s problems stem from last-minute rules put in place by the SBA, including the decision to impose a 1% interest rate (at one point, the department considered .5%); choosing to incorporate shorter loan terms; and the fact that the funds are doled out on a first-come, first-served basis.
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ASTA’s proposed amendments, which were compiled based on ASTA member feedback gathered prior to and since the PPP’s launch, include increasing loan forgiveness from eight to at least 12 weeks and allowing the “forgiveness clock” to begin running at the borrower’s discretion.
At the same time they are dealing with an unprecedented collapse of travel demand, travel advisors are working around the clock to accommodate clients whose travel plans have been disrupted or who, due to coronavirus concerns, are seeking refunds in connection with future trips.
Other amendments include expanding loan terms to at least five years; allowing borrowers to use at least 50% of their loan for nonpayroll expenses; and treating ICs and the self-employed as equal to small businesses with more employees.
“While new business and any revenue associated with it has come to a halt, the work hasn’t,” Peck said in the letter. “At the same time they are dealing with an unprecedented collapse of travel demand, travel advisors are working around the clock to accommodate clients whose travel plans have been disrupted or who, due to coronavirus concerns, are seeking refunds in connection with future trips. This is the situation many of our members find themselves in — working harder than ever before but essentially without pay.”
Peck also communicated that ASTA will be willing to collaborate with the SBA to provide any additional information that may help these changes come to fruition.
The Details
American Society of Travel Advisors
www.asta.org
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