ASA hosted a briefing March 31 to discuss the COVID-19 pandemic, its impact on the automotive repair industry and the $2 trillion stimulus package, signed into law March 27.
Hosts Ray Fisher, president/executive director of ASA, and Bob Redding, ASA’s Washington, D. C., representative, welcomed a special guest: U. S. Rep. Buddy Carter, R-GA, a senior member of the U. S. House Committee on Energy and Commerce, which has jurisdiction over many automotive and collision repair industries.
“We’re all facing challenges related to (the coronavirus) as individuals, as families, as businesses,” Fisher said. “COVID-19 has already begun affecting the automotive and collision repair industry, and ASA has been very busy with various pieces of legislation, including the Coronavirus Aid, Relief, and Economic Security (CARES) Act, passed on Friday evening. As the only association with a full-time representative in the capitol, we wanted to get real, factual information out to shops as soon as possible.”
Redding noted several aspects of the CARES Act are important to the collision and automotive industry, and assured participants ASA is working diligently to ensure small business provisions apply for those businesses.
Although the SBA has 15 working days to establish regulations, Redding encouraged shop owners to visit the website to start learning about the Enhanced Economic Injury Disaster Loan (EIDL) and the Paycheck Protection Program (PPP) since some information, including the EIDL application, is already available.
“It’s very reassuring that the administration is moving quickly with the goal of getting money in the hands of small businesses as soon as possible,” Redding said. “Approximately $377 billion was allotted to the small business space, so that’s really good news for automotive and collision repairers who are struggling during this pandemic.”
Carter joined the conversation to share his unique perspective.
“There’s a lot of uncertainty out there—and I’d go as far as calling it fear—because no small business owner has experienced this before,” Carter said. “We’re in unchartered waters, and a lot of small business owners are uncertain about the future and whether they will be viable through this.
“The EIDL and the PPP provide an opportunity to get money into the hands of small businesses so they can stay liquid. This is not a bailout, and although $2.2 trillion is a lot of money, it’s needed right now.”
Noting that even the essential businesses allowed to continue operations may experience reduced volumes, Carter expressed a hope the recently passed stimulus package and increased amount of small business loans will inspire optimism for many.
He said the PPP will allow small businesses to retain employees by borrowing up to 2.5 times the monthly payroll, or up to $10 million. Those with banking relationships can contact their lender to apply for the PPP, which will be administered through the SBA.
“If the money is used for certain purposes, such as retaining employees or healthcare benefits for those employees and paying for mortgages, it will be forgiven, those parts of it will be forgiven, so essentially it could end up being a grant,” he said. “We’re trying to keep employees on your payroll so they don’t go on unemployment. Now, we did increase the amount of unemployment and add some (new) programs, but our goal is retain that employer/employee relationship.”
More funds were also designated for the EIDL to help small businesses, and applications are available through the SBA.
“If you apply for the EIDL, you will automatically get a grant of up to $10,000, which you can use for payroll, for rent, for mortgage, and that grant will be forgiven, whether you get the EIDL loan or not,” Carter said. “Let me encourage everyone who needs assistance to apply for the EIDL; you will be eligible for that $10,000 grant automatically, whether you get that loan or not. You can actually apply for both of those loans—you can’t use them for the same purposes, but you can apply for both of them.”
Carter said President Donald Trump and Treasury Secretary Steven Mnuchin have made it clear they want this done as quickly as possible because they know small businesses need this money, and they need it now.
“We’re trying to streamline the process as best as we can and get the money into the hands of those who need it now,” Carter said. “These are exceptional times, and this is not the fault of anyone. This isn’t something anyone could control.”
When asked if there’s a potential for a fourth relief package, Carter acknowledged there has been some discussion on the topic, and although the amount already being made available exceeds his comfort level, he recognized those suffering are not to blame for this situation. He hypothesized that, should a fourth relief package come into play, it would concentrate on health care needs and infrastructure.
ASA noted some business owners have expressed anxiety about the narrow window they have to get their business in line for fear that the relief funds will be depleted within the next few months.
Carter encouraged everyone to file.
“Go ahead, and file your application. As I mentioned just a second ago, there’s $10,000 out there in the EIDL that’s just waiting on you,” Carter said. “It’s there for a reason: we know you need it. And the PPP, we want you to be part of that, and it’s going to be forgiven if you meet certain parameters. I’d start the application process ASAP, even if you’ve never applied for a federal loan before.”
ASA thanked Carter for participating in the association’s briefing.
“I want to reassure everyone out there,” Carter said. “Folks, this too shall pass, and I hope that we’ll all be there for each other. We’re all in this together. We need to continue to pray for our leadership, for our country. This is very important for all of us, but I hope you will hang in there. It is going to pass, I promise you.”
Noting there have been many changes as the bill has progressed, Fisher expressed the need to know what to do and how to do it as fast as possible. He asked Redding how fast things are moving legislatively.
Redding compared the current “highly unusual” proceedings to the normal process, which typically includes a period of 60 to 90 days for public comments; in contrast, guidelines on the PPP must be completed in 15 days.
“The government is eager to get these programs on the street and help the small business community,” Redding said. “This is an opportunity to help a lot of our shops that are struggling. Not all shops are struggling, but based on recent calls with our collision and mechanical operations committees, some shops are already seeing a significant decline in business.
“All of the government’s focus is on moving this forward and getting these programs in place. Hopefully, this will relieve some anxiety and pressure off family-owned businesses that are struggling.”
Redding advised shop owners to begin reaching out to their lenders and the SBA quickly to start a dialogue and begin the application process.
“Lending institutions are currently establishing guidelines and processes for handling clients’ needs in regards to the PPP, but get in their queue,” Redding said, encouraging shops to contact the association if they experience any obstacles during this process. “We want to help however we can because that’s what the association does. It’s important to educate the industry about these opportunities.”
“ASA has been working to ensure that automotive repair facilities aren’t overlooked during the responses to this global health crisis,” Fisher said. “ASA appreciates the dedicated work of all federal, state and local officials to ensure the utmost safety of all citizens and that automotive repair facilities are categorized as performing essential services. This will pass in time. We will get through this together, but it takes a community to do that, and we’re all partners in this community.”
For more information on the PPP, click here.
To apply for the EIDL, click here.
To listen to the briefing, click here.