Coronavirus Aid, Relief, and Economic Security Act (CARES)
Paycheck Protection Program
Phase III of the government’s response to the COVID-19 virus has been signed into law and creates a new, temporary loan program to assist businesses, including auto dealers.
Resources
SBA: Paycheck Protection Program Loan Forgiveness FAQs
Paycheck Protection Program Loan Forgiveness Application
Interim Final Rule on Loan Forgiveness
Interim Final Rule on Loan Review Procedures and Related Borrower Responsibilities
SBA: Paycheck Protection Program-Participating Lenders
Treasury Department: Paycheck Protection Program Overview
Treasury Department: Paycheck Protection Program FAQs
PPP Loans: Do Businesses Owned by Large Businesses Qualify? NADA Preliminary Guidance
PPP Loans: Use of Proceeds and Forgiveness NADA Preliminary Guidance
U.S. Chamber of Commerce: Coronavirus Emergency Small Loans Small Business Guide and Checklist
About
- The CARES bill provides $350 billion for 100 percent federally-guaranteed loans for eight weeks.
- In April, Congress authorized an additional $320 billion for the program.
- Dealers may borrow up to 250 percent of their average monthly payroll cost and may be forgiven equal to the amount spent over an eight week period following the origination date of the loan.
- Eligible businesses must have paid salaries and payroll taxes prior to February 15, 2020 and have fewer than 500 employees.
- For those auto groups with more than 500 employees eligibility affiliation rules may be waived under certain criteria. Click here for information from NADA on how this applies to dealers.
- Loans can be used for “payroll costs” up to an annual rate of $100,000 per employee. This also includes interest on mortgage obligations, rent, and utilities.
- SBA-certified lenders and non-SBA lenders will be authorized to make Payment Protection loans through delegated authority for quicker processing.
- Loans will not require an application fee, personal guarantees, collateral, or closing costs.