The CARES Act was signed into law by President Trump last week, opening up hundreds of billions of dollars in forgivable grant funds to small businesses. Eligible businesses with 500 or fewer employees will be eligible for up to $10 million in forgivable loans through the Small Business Administration’s 7(a) Paycheck Protection Program. Please click here to view the SBA’s COVID-19 information page.
We recommend that you contact your SBA 7(a) lender, if you have one, as soon as possible if you plan to participate in this program. In general, the maximum loan amount is expected to be 250 percent of an employer’s average monthly payroll total, up to that $10 million amount.
Given that the Paycheck Protection Program funds are available to businesses with fewer than 500 employees, NADA has published an informational guide on how certain small business qualify, with a specific focus on auto dealers. At this link, you will find an Excel spreadsheet with a list of OEMs and their SBA status; franchisees associated with the manufacturers who already have codes should be able to much more easily qualify for SBA loans provided under the CARES Act.
Nearly every OEM with a large presence in the region has either already qualified for this provision on behalf of their franchisees, or has submitted an application to do so; you can find a full list of relevant OEM codes here. WANADA thanks NADA for their diligence in trying to expand eligibility for these SBA provisions to as many of our dealers as possible.
In addition, the U.S. Senate Subcommittee on Small Business and Entrepreneurship has also published two guides: one about the CARES Act overall, and one specifically about the Paycheck Protection Program. The Senate Finance Committee has also produced a helpful guide covering the Employee Retention Credit provision in the law. Also, NADA and the U.S. Chamber of Commerce have published a checklist for businesses preparing to apply for PPP funds.
As WANADA reported last week, state governments in the region are also offering various levels of assistance for businesses and employees who have been significantly impacted by the COVID-19 pandemic and the broad closures and economic downturn that have occurred as a result.
The Maryland Department of Labor has created a Layoff Aversion Fund, which will offer grants of up to $50,000 for businesses to defray the costs of setting up remote workspaces, workplace sanitization costs, professional development for affected employees, and for those companies that participate in the state’s long-standing Unemployment Insurance Work Sharing Program.
The Maryland Department of Commerce has also implemented a $130 million grant and loan program for small businesses and manufacturers in the state. Tens of millions of dollars in low- or no-interest loans are available, as are direct cash grants of up to $10,000, designed to help small businesses stay afloat for a short period of time after a drastic downturn in business.
Both Virginia and Maryland have waived the usual one-week waiting period to apply for unemployment benefits, and both states have waived their prior job-search requirements as well. The CARES Act also expands eligibility for unemployment benefits, which, for at least the next 13 weeks, will be supplemented by an additional $600 per week for qualified applicants across the country.Download Bulletin PDF