Covid loan helps travel agencies cope
A federal loan program supporting some of the nation’s major airlines has also helped a travel agency in northwest Arkansas survive the pandemic.
Federal Coronavirus Aid, Relief and Economic Security Act provided the US Treasury Department with $ 500 billion in loans and other investments “to provide liquidity to eligible businesses, states and municipalities related to losses suffered as a result of the coronavirus “.
The law allocated up to $ 25 billion of that money to a passenger airline industry loan program, which ultimately provided nearly $ 21.2 billion in low-interest loans to airlines, ticket agents and aircraft repair companies, according to a report released this week by Congressional Oversight. Commission.
Of that amount, more than $ 21 billion went to nine airlines, including $ 7.5 billion to American Airlines and $ 7.491 billion to United Airlines.
Bristin Travel LLC of Fayetteville, which received a loan of $ 549,651, was one of two travel agencies nationwide to participate.
Ovation Travel Group in New York, which received a $ 20 million loan, was the other.
Bristin Travel founder David Temple said the loan, along with other government covid-19 programs, has helped his company survive the most difficult business climate he has ever encountered.
With over 100 trips to Mexico and the Caribbean to his name, the 35-year-old businessman has made travel and tourism his mission.
Operating under the name BlueSun Vacations, his company hosts destination weddings and sunny respites.
Specializing in seaside destinations, its travel agents are called BeachMasters.
After the coronavirus pandemic shut down the country, “it was a nightmare,” Temple said.
The number of trips to Transportation Security Administration checkpoints, which was approximately 2.15 million passengers on March 31, 2019, fell to 136,023 on March 31, 2020.
Closed borders; overseas flights have been canceled.
“I was in the industry during the Great Recession [of 2008-2009]. I’ve been through some pretty tough boom and bust cycles. It was completely unprecedented, “he said.” It wasn’t an excursion. You just fell off a cliff overnight. “
With clients canceling trips and credit evaporating, “my full-time job has become ‘making sure I don’t run out of cash’,” he said.
“I applied for around 98 government-subsidized loans, grants and vehicles,” he said.
The Paycheck Protection Program, combined with the Small Business Administration’s Covid-19 Economic Disaster Loan Program, helped him avert a disaster, Temple said.
The loan handled by the Treasury Department was quite complex, Temple noted.
“As you realize, it wasn’t created for small businesses like me,” he said.
He inquired about the loan in April, and it was not finalized until October, he said.
It was an expensive process; Temple estimates he spent $ 25,000 on lawyers and accountants in general.
“The closing documents were 498 pages long. The compliance documentation since obtaining the loan was almost 2,000 pages,” he said.
“I’m sure I spent 100 hours, maybe 150 or 200 hours, on paperwork, correspondence [and] meetings, ”he said.
“I didn’t really know or have any degree of confidence that we were going to get it until a few days after receiving it,” he said.
The interest and charges on the loan will ultimately be around 6.75%, he said.
The loan maturity date is October 26, 2025.
The Treasury Department “will be reimbursed, in full, with interest,” he said. “It shouldn’t cost American taxpayers anything, and it saves all jobs.”
The company now has 16 employees, six of whom were hired this week, and the business is rebounding, he said.
“It’s booming,” he says.
People are looking to travel during the summer, and year-end travel is heating up as well, he said.
The Transportation Security Administration reported 1,278,113 passengers at its checkpoints on Wednesday – up from 136,023 on the same date a year ago.
The Treasury Department closed the airline industry loan program.
U.S. Representative French Hill, R-Ark., Who sits on the bipartisan Congressional Oversight Committee, said the program has done what it was supposed to do, highlighting the revival of passenger travel.
A separate $ 4 billion program provided loans and loan guarantees to air cargo companies.
“The Congress Airlines and Air Cargo program has been extremely helpful in getting the airlines through this storm of the year,” he said.
“In our opinion, it has been accepted and used by airlines and air cargo companies with quite a bit of success,” he said.
Hill, a former Little Rock banker, was one of four people hired to serve on the Congressional Oversight Committee, a bipartisan body formed to oversee how the Treasury Department and the Federal Reserve use law funds CARES.
The report is available at: https://coc.senate.gov/sites/default/files/2021-03/March%20Report%2C%20Appendices%20v2.pdf