The Latest on Paycheck Protection Program for Auto Repair Shops
Will there be another round of PPP funding? If there is, will you be ready?
This article was published on April 22, 2020. Please keep in mind that the information may be outdated as time passes.
In a little under two weeks, the $349 billion lending limit for the Paycheck Protection Program was reached. If your shop didn’t manage to apply in time or if the fund ran out before you were approved, you may be wondering if there will be another opportunity for relief. There most likely will.
Congress is working on another round of small business stimulus and protection and The Wall Street Journal has reported that a deal has been struck. It’s hard to say when another round of funding will be approved and some of the parameters may change, but in all likelihood, more money is on the way.
While we’re waiting to see exactly how it shakes out, there are some steps you can take right now to prepare your shop to apply and land some relief. Remember: the first round of funding ran out pretty fast, so you will want to be prepared before the next round is appropriated. Here are some steps you can take to either be prepared for the next round of funding or seek other financial support.
Get Your Paperwork in Order
Paperwork requirements may change, even in a matter of a day or two. However, there are certain documents you can get in place to be prepared for most possibilities:
Your basic company and contact info, including preferred phone number, an email you check daily, and preferred person to be contacted regarding financial matters;
A copy of your driver's license or other official ID such as a passport; and
Your most recent IRS form evidencing your payroll (ex. Form 941, 1099, 1040).
Tek-Tip: Take a closer look at your balance sheet
Now’s a good time to check out your general financial numbers. You’re already taking the time to look at what you spend on people, so it’s also worth looking at what you spend on processes and technology. You may be able to make changes that improve efficiency, marketing, and the guest experience so that you can hit the ground running when business picks up again.
Consider Going with a Small Bank
The Paycheck Protection Program is funded by the federal government through the SBA (Small Business Administration), but some of the eligibility requirements are determined by the lenders themselves. Some business owners who bank with larger banks discovered upon applying that they were either ineligible for the program or that they simply couldn’t get through fast enough to be in line for relief.
If you ran into either of these issues before or want to decrease your chance of going through something similar in the next round, you may want to consider a smaller, local bank. Just as local businesses in other industries sometimes know your needs and provide a better guest experience, local banks may get back to you faster or have more lax eligibility requirements for their customers. Even if you are not currently a customer with a local bank, they may be willing to take you on, especially as small business owners look for answers in their own community.
Keep an Eye on the SBA Website
The SBA has set up a resource site for businesses dealing specifically with COVID-19. In addition to health and safety measures, the site also provides guidelines for companies seeking loan and funding assistance. Expect the SBA to update their site regularly as things evolve, and keep an eye on the news to see the status of potential sources of funding. What loans are available, who qualifies, and what businesses need to do to qualify may vary depending on legislation and department policy, so staying tuned will help you adjust to whatever is requested.
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