Accessing Coronavirus Relief Options for Dealerships
The human toll of the COVID-19 pandemic is one of the many sad statistics in this world event.
On top of this, the economic impact has been tremendous - millions are now unemployed, and businesses have been doing whatever they can to maintain operations.
Speaking with our customers and partners, we know that we’re not alone and can attest that these have been especially difficult times for everyone. While we’re trying to navigate through this, we’re committed to sharing any information that may help our customers and automotive peers.
With no confirmed timeline yet on when the world will be able to return to normal, governments around the globe are passing record economic relief packages designed to mitigate COVID-19’s impact and enable businesses and individuals to get by over the next couple of months.
In the US, there are a couple of options for small businesses under the Federal Government’s recently passed relief packages. Any company that has been impacted can apply. The volume of applications will be significant, and we’re potentially weeks away until the funds are distributed, so apply as soon as possible (if you haven’t done so already).
There are two primary options for Federal assistance that you should to consider. You may apply for both options depending on how the money will be used.
Small Business Disaster Assistance Loans
The Small Business Disaster Assistance Loans, specifically the Economic Injury Disaster Loan, is designed to help small businesses by providing working capital loans of up to $2 million to help overcome a temporary loss in revenue. Small businesses affected by COVID-19 can receive up to $10,000 in advance.
Business or cooperatives with fewer than 500 employees are eligible to apply. Full details and applications can be made here.
Paycheck Protection Program (PPP)
The Paycheck Protection Program is part of the $2 trillion Coronavirus Aid, Recovery, and Economic Security (CARES) Act. This PPP was created to primarily cover small businesses’ payroll costs for up to eight weeks (capped at $10 million) to encourage companies to retain their employees over the next couple of months. The Small Business Administration (SBA) will forgive loans if all employees are kept on the payroll for eight weeks, and the money is used for payroll, rent, mortgage interest, or utilities.
More information can be found here. Consult with your local lender as to whether they are participating in the program.
We hope that this is helpful and recommend consulting with a tax, legal, and accounting professional to get advice on how to take full advantage of these options if you are eligible.
In the meantime, please stay safe and healthy.
Legal and Tax Disclaimer
The information provided in this document does not and is not intended to constitute legal or financial advice; instead, all information and content in this document are for general informational purposes only. The information provided should not be used as a substitute for consultation with professional tax, legal, and accounting advisors, and you should consult with a tax, legal and accounting professional before engaging in any transaction.