Working with others, the United Motorcoach Association has put together a proposal asking for specific support for the bus and motorcoach industry impacted by the COVID-19 economic crisis.
The three-point plan resolves some of the biggest issues that arose for operators trying to take advantage of the CARES Act programs; the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL). A new industry-wide letter-writing campaign was launched on April 16 to ensure its success. Within 24 hours 1,000 individuals had already sent letters to Congress for a total of 5,000 individual contacts.
“Over time, we have hammered this out to the point that we feel this is what needs to be expedited to bring the quickest help to our operators that need it the most,” explained Ken Presley, UMA vice president, legislative & regulatory affairs & industry relations/COO. “We know they are not formulated perfectly; however, these programs already exist and modifying them seems more likely than creating new programs; which Congress has not demonstrated any interest in.
Presley described the details of the effort during the weekly UMA Town Hall on April 16. He was joined in the conversation by Becky Weber, with Prime Policy Group, the UMA’s lobbying firm for the past 15 years.
“We feel like the programs that have stood up, as they were designed to, are designed to just keep you alive, keep your employees together and keep your company alive so that you can live and operate when this is all over,” said Weber.
Funding PPP, EIDL
The goal is to make sure the PPP and the EIDL programs are fully funded, and some minor changes are made so UMA members can better use them.
There have been some hiccups with accessing these programs, and the money is starting to run out. Congress is working to bring more funds to the plans.
So “The Ask” is actually made up of three requests:
First, make sure the PPP and EIDL are fully funded. Second, the 75%/25% loan forgiveness rule in the PPP is shifted to 50%. And third, that a PPP rule that benefits the hospitality businesses with more than 500 employees is extended to bus transportation.
With the exception of funding, the other changes can be made administratively.
The UMA isn’t asking for a specific number for PPP; however, the Trump Administration has decided that $250 billion is what is needed, at least for now. There are indications that the program will receive new funding in subsequent stimulus packages as the effects of the pandemic are more widely felt.
“The UMA’s position would be as long as there is a need, and there are businesses that haven’t been able to access this money, then Congress should fully fund these programs to address the need that is out there,” Weber said.
The PPP is basically a grant disguised as a loan, which is what makes this pipeline of stimulus money so attractive. Currently, PPP loans can be completely forgiven if 75% of the amount is spent on payroll and related costs such as benefits.
Unfortunately, the 75%/25% restriction doesn’t make sense for a very capital-intensive industry like bus and motorcoach, where operators finance very expensive pieces of equipment. After talking with members, UMA is lobbying for that percentage to be reduced to 50%.
“As we read the legislation, you can use part of the money for the interest on your vehicle payments, on your lease or your real estate mortgage,” Weber said. “We are aware that there are several other industries that are having trouble with the 75%-25% requirement and would also benefit from this, so it’s something we feel has some momentum in order to get done.”
This change could be accomplished through an administrative change by the Small Business Administration.
“We’re hopeful that, if we make enough noise, they might change that,” Weber said.
Second, while both the PPP and EIDL are targeted to small businesses with fewer than 500 employees, there is a rule that lets companies with multiple locations that have fewer than 500 employees at each location apply for the stimulus funds. But that rule extends only to the lodging and restaurant businesses.
It was basically written to address the needs of franchises and chain restaurants and hotels. But Weber contends it makes sense to extend that rule to operators who have several locations and serve a similar market. Currently, the statute references the businesses that are eligible using SBA codes for the National Industry Classification System.
UMA is asking that six codes be added to this category to cover all charter, motorcoach, bus, transit, school buses and other types of transportation that UMA operators provide.
Extend through Dec. 31
And finally, the group is requesting funding for bus and motorcoach operations through Dec. 31, so operators don’t need to reapply every eight weeks.
Even if the economy starts reopening in the next month or two, the bus and motorcoach industry is expected to take longer to recover than other businesses.
“It’s important that we have an ask that’s doable to get us through the rest of this year, as we may need that because of the timing of the restart of business. We want to make it possible for you to be funded, as you need it through the end of the year,” said UMA President and CEO Larry Killingworth.
Presley pointed out the industry has benefited from not having a carved-out category but rather being included with small businesses.
“The reality is that the current loan funds have worked pretty well for the industry and, by flexing them up a little bit and opening them up a little bit, they should work very, very well for the industry. They’re already in place, so we don’t have to reinvent the wheel for the short run,” Presley said.
He added that UMA sent a letter to Treasury Secretary Steven Mnuchin and SBA Administrator Jovita Carranza on April 16, asking for more flexibility with PPP.
“Some of the things are done administratively rather than through Congress, and they have some of that flexibility to change those things now, so we’ve asked them to change those,” Presley said.
The power behind this ask will be the voice of the industry. Members sent nearly 26,000 letters previously to leaders. Now, it’s time for another wave of letters to put weight behind this new ask.
The letter campaign will focus on congressional leadership, asking for their quick action to extend funding of the PPP and EIDL financial support programs through the end of 2020.
These moves would support the industry’s 3,000 mostly smaller businesses that are part of the nation’s transportation fabric.
Fortunately, sending a letter takes about 90 seconds.
“These letters will go to the Senate and House majority and minority leaders, and to your representatives,” Presley said. “The P2A is pretty easy to use. You type in your address and name and your company, hit send and off it goes.”