From Tori Emerson Barnes @ 11:52 AM on April 14
The major provisions we secured in the Coronavirus Aid, Relief, and Economic Security (CARES) Act were a good first step to help travel businesses and our workforce. However, we knew immediately that more work needed to be done to clarify what relief was available to our industry and broaden access to it wherever possible.
U.S. Travel Association, along with industry partners, sent two joint letters: one to the U.S. Department of the Treasury and the Federal Reserve and one to Treasury and the Small Business Administration (SBA), with clarifying questions and recommendations regarding relief options for the travel industry. In response to our requests, Treasury, the Federal Reserve and the SBA have provided new guidance that may be useful to you when navigating the CARES Act.
Exchange Stabilization Fund (ESF)
- Municipal Bond Facility: States, cities, and counties will be able to issue bonds through a $500 billion program that is intended to help cover the cost of lost tax revenue. Only one issuer per state, city or county can participate in the program, but bond proceeds can be used to help instrumentalities or political subdivisions of the issuer, such as DMOs, manage cash flow issues resulting from reduced tax revenue. More information can be found here.
- Main Street Lending Program: U.S.-based businesses with 10,000 employees or less, or those earning $2.5 billion or less last year, will be able to refinance existing loans or obtain new unsecured loans through a $600 billion program being developed by the Federal Reserve and Treasury Department. Loans will be provided through banks and credit unions, with no less than $1 million provided per loan. More information can be found here.
- Corporate Credit Facility: U.S.-based corporations will be able to issue bonds or access loans through a $750 billion program being developed to inject capital into severely distressed businesses. Eligible businesses must have had an investment grade credit rating as of March 22, 2020, with some restrictions for those that have been downgraded since. More information can be found here.
More information on the ESF can be found on our website.
Paycheck Protection Program (PPP)
- Business Affiliation: The PPP will treat businesses on a consolidated basis if each is controlled, or can be controlled, by a common owner or manager or if the establishments have identical interests. However, those rules are waived for food and accommodation establishments (as classified under NAICS 72) with less than 500 employees, establishments that operate under a registered franchise, or those that have received financial assistance from a licensed Small Business Investment Company. More information can be found here or on the Treasury Department's website.
- Calculating Payroll and Employees: Borrowers can calculate their payroll costs, as well as their number of employees, using data from either the previous 12 months of payroll or calendar year 2019. Seasonal businesses can use data from February 15 – May 9, 2019, or March 1 – June 30, 2019, and new businesses can use data from January 1 – February 29, 2020. For more information, please see the Treasury Department's FAQ.
More information on the PPP can be found on our website.
While we appreciate the information that Treasury, the Federal Reserve and the SBA have provided so far, we remain concerned that too much of the industry is being left out. As such, we continue to press for greater progress in Congress and in the Administration on expanding and appropriately implementing these and other critical relief measures.
Additionally, we are in the process of updating the resources on our website with the latest information, which will be available for you to reference soon. As always, please do not hesitate to reach out to us with your own questions.
Tori Emerson Barnes
Executive Vice President, Public Affairs and Policy
U.S. Travel Association