Dateline: 07/08/02

Far more U.S. travel agencies are now eligible to receive Small Business Administration (SBA) assistance, including small business loans, under a new rule that took effect on July 1, 2002.

Under the new rule published in the Federal Register on May 31, 2002, travel agencies generating up to $3 million in annual revenue now qualify for SBA assistance. The old limit, under SBA's revenue-based size standards, had been $1 million.

Travel agencies falling within the new size standard are eligible for SBA assistance, including small business loan programs. These travel agencies will be eligible to apply for SBA’s contracting and business development programs such as the 8(a) Business Development Program and HUBZone Empowerment Contracting Program; and compete for federal contracts worth an estimated $347 million through small business set-asides and other contracting incentive programs.

Qualifying travel agencies are also eligible to apply for economic injury disaster loan (EIDL) assistance for losses and damages attributed to the Sept. 11, 2001 terrorist attacks on the World Trade Center and the Pentagon. The deadline to apply EIDL assistance has been extended to Sept. 30, 2002.

Government Responds to a Changing Industry
"SBA recognizes the hardships facing travel agencies nationwide in the rapidly changing travel market, especially after the September 11 Terrorist attacks. We have increased the size standards to help these firms better qualify for assistance and ensure that they receive access to capital and their fair share of contracting opportunities," says SBA Administrator Hector V. Barreto.

The decision to increase the size standards came after an in-depth SBA review of the travel agencies industry showed that trends affecting compensation, technology, and government and corporate requirements justified the change.

Besides the devastating effects arising from the Sept. 11, 2001 terrorist attacks, SBA noted that small travel agencies had been impacted by reduced airline commissions and increasing demands to keep up with advances in technology, specifically, the use of the internet. "In order to compete with larger businesses, travel agencies have had to make greater investments in technology to meet the needs of their customers and switch from a commission-based system to a fee-based compensation system," stated the SBA in a prepared statement.

About SBA Size Requirements: What is "Small?"
SBA’s size standards define whether a business entity qualifies as small and, thus, eligible for government programs and assistance reserved for small businesses, including some programs in other agencies.

Size standards are established separately for industry groups as defined by the North American Industry Classification System.