Agents Not Confident They Can Repay Loans By Deadline
A new survey by ACTA found that a majority of travel agencies and independent travel advisors are not confident they can repay principle and interest on CEBA, RRRF and HASCAP loans by Dec. 31 — with 67% saying they are not confident and 16% are unsure.
Focused on debt and government pandemic loans, the survey was conducted in July and revealed that 27% of travel businesses owe at least $100,000, 56% owe at least $50,000 and 80% owe at least $10,000.
Wendy Paradis, ACTA president, said that: “The survey was open to travel agencies and independent travel advisors between July 11-28 this year so that Q2 business results were known and we could have up to date information to show to governments.”
Paradis continued: “We have been hearing from ACTA Members for several months now that although business is recovering, they are very concerned about the debt load they are carrying as a result of the pandemic.”
The ACTA survey was developed to gather insight on levels of travel agency and independent travel advisor debt and capacity to repay federal government loans due by Dec 31, 2023:
- CEBA – Canada Emergency Business Account
- RRRF – Regional Relief Recovery Fund
- HASCAP – Highly Affected Sectors Credit Availability Program
The survey results will serve as the key element in ACTA’s advocacy strategy calling on the federal government to provide forgiveness and more time to repay outstanding loans.
It revealed that 50% are still recovering from the pandemic with a slow return to profitability and 15% said that loan repayment terms are difficult to meet and that today’s high interest rates add to the difficulty.
A majority of travel agencies and independent travel advisors are not confident they can repay principle and interest on CEBA, RRRF and HASCAP loans by Dec. 31 with 67% saying they are not confident and 16% are unsure.
Another 36% said they think it is likely or somewhat likely that they will close within 3 years.
When asked what measures would be most helpful in being able to repay government loans and debt, 72% would like to see more loan and debt forgiveness and 16% said a longer period to pay.
With the release of the survey results, ACTA is launching an industry-wide letter writing campaign calling on the Honourable Chrystia Freeland, Minister of Finance, to provide more time for federal loans to be repaid.
The letter writing campaign runs from Aug. 29 through Sept. 29 and ACTA is asking industry members to send a letter to their Member of Parliament and Minister Freeland.
A sample letter is provided by ACTA and your MP’s information will auto fill when you insert your address. The process is simple and takes less than two minutes.
The advocacy strategy will include several tactics throughout the Fall, including formal submissions to government, main-stream news media, social media, and meetings with MPs across Canada.
ACTA’s recommendations are:
- Extend the CEBA interest-free repayment deadline by two years to the end of 2025, while maintaining access to the forgivable portion.
- Modify the terms of the RRRF and HASCAP loan programs to allow more time for repayment. • Work with industry to explore forgiveness measures that would help the loans be repaid sooner.
ACTA is working together with several stakeholders, including Travel Industry Association of Canada and the Canadian Chamber of Commerce, to ensure a clear, strong, and collective voice and call for action is heard and acted upon by Minister Freeland.
Go to www.acta.ca for more.