By Desiree Homer
Part 2: Action Steps Dealer Owners Can Take Today
Yesterday, we offered some insight and resources for dealer owners and managers to help unravel some of the guidelines and nuances of the Paycheck Protection Program (PPP). For those who have not yet applied for these loans, there are specific action steps you can take in exploring the next steps. These funds may not be ideal for every dealership operation, but there are resources available to help you determine your direction.
Start with Consulting Your Accountant or Financial Advisor
Reach out to your accounting or financial partners to help you hone in on your cash flow situation and timeline. There are other benefits of the CARES Act that may be more beneficial to your operations, including tax credits and payroll tax deferment options. Your advisor can also help you prepare certified payroll and financial statements needed for the application of the PPP loans. Each dealer’s financial situation is different, so consider getting the professional guidance specific to the preservation of your business.
Contacting Your Banking Institution
When you’re ready to move forward, you can contact your banking institution to get registered. Most banks are considered SBA-approved, but it may help to confirm with your bank first. Only those banks recognized by the SBA will be able to access the federally allocated funds. The application process for many entities began April 3, and for independent contractor or self-employed, April 10. The process is intended to be seamless, but as with any new programs, there can sometimes be issues. Should you have problems or questions about getting your application submitted, or approval timelines, your banking professional may be your best contact.
What You’ll Need to Apply
Based on the first round of applications circulating from the banks, it will help to get a few pieces of information together for a seamless process. Listen to Dave Cantin and Andy Cherkasky discuss the importance of proper documentation during a self-certification loan process, in a recent Dealer News Today podcast. You’ll, of course, need your tax ID# and full legal name of each entity for which you’re applying. Consider having documentation for monthly payroll for the 2019 calendar year, outlining those full-time employee expenses. Have the data available itemizing your staff by salary, hourly, commissions, and union versus non-union. Included in these total costs should be any vacation or sick time as well as healthcare benefits you may be offering. Be prepared with monthly expenses, including mortgage, rent, and interest for the last 12 months. Similarly, have totals of associated utility costs and a separate roster of debts or obligations incurred prior to February 15, 2020. Any owners with affiliate entities, or more than 50% ownership interest, will need to specify those interests, respectively.
Because the funds are funneling through the banks, via the traditional SBA 7(a) loan process, businesses should be able to apply and secure approvals locally. It will be important to discuss with your bank about any other COVID-19 relief programs you for which you plan to apply. For more information on getting started and understanding the programs as they relate to your dealership operations, you can visit NADA’s site for Coronavirus relief efforts. You can also visit the U.S. Treasury Department’s website, launched on April 1, explaining the PPP loan program as well.