Paycheck Protection Program Update

Dear WANADA Members,

The Small Business Administration's Paycheck Protection Program officially has begun accepting applications. The Treasury Department issued an interim guidance regarding the PPP, which hopefully will begin to provide more clarity about how this forgivable loan program will be administered.

We want to remind you that, as the guidance further reinforces, this $349 billion fund is available for eligible small businesses through June 30, 2020, or until the available monies are exhausted.

Treasury has also published a Borrower Application Form for the PPP, and a Lender Application Form as well. From a legal standpoint, the PPP is a modification to the pre-existing 7(a) Loan Program; if you have a pre-existing relationship with an SBA 7(a) lender, we once again recommend that you contact them as soon as possible if you are considering participating in this new program.

The CARES Act, which authorized the PPP, has modified pre-existing SBA qualifications in a way that is designed to make it easier for would-be applicants to access the fund. Our interpretation of Section 1 of the guidance is that the program will only require certifications of good-faith need for the loan, though your specific lender will have some leeway to determine specifically what "good faith" is, and to determine further qualifications for each individual applicant.

Please read the interim guidance and familiarize yourself with it, particularly the provisions in Section 2 around borrower eligibility and funding calculations. 

If you do not have a pre-existing 7(a) Lender, please visit the PPP Lender Match Tool on the SBA website. All of the resources we have referred to in this letter can also be found on the Paycheck Protection Program information page. You can also view the  SBA's broader COVID-19 information page, which covers all the SBA resources that are currently available to businesses of all sizes and needs.

Also, as we have mentioned previously, auto dealer franchisees with more than 500 employees spread across multiple dealerships will be able to qualify for these SBA loans once their OEMs have secured a Franchise Identification Number. Please click here to view the most up-to-date list that we currently have of Franchise IDs for OEMs. 

Please contact myself or Joe Koch  ( [email protected] ) at any time if you have any questions about this program, or would like additional information about other benefits that may be available to small businesses through your state and local governments.

You can also view our COVID-19 information library, which also includes a full archive of our membership communications throughout this crisis, including prior analysis of the CARES Act and its many important provisions.

Sincerely,
  
John O'Donnell
WANADA President and CEO