BSM Shareholder, Richard Sox, has presented seven (7) seminars on the Paycheck Protection Program loan eligibility and forgiveness thus far for various dealer organizations. The continuing seminars are a result of the repeated changes made to the PPP by both the Small Business Administration and Congress. Congress, of course, passes the legislation creating and modifying the Program, most recently by way of the PPP Flexibility Act. The SBA, in consultation with the US Department of Treasury, has the authority to issue rules and guidelines clarifying PPP issues and implementing the Program.
The most significant recent changes to the PPP, found in both the Flexibility Act and a subsequent SBA rule are (i) that businesses can avoid a reduction in their loan forgiveness amount if they can demonstrate that the business had a loss of business activity during the covered period resulting from federal, state or local Covid-19 guidelines and restriction; and (ii) that businesses have up to 24 weeks to use their PPP loan proceeds for forgivable expenses (up from the original 8 week time period).
As dealers strategize on maximizing their loan forgiveness, to include avoiding any reduction in the forgiveness amount, as well as documenting loan eligibility, experienced legal counsel should be consulted to insure the dealership’s loan forgiveness application will stand up to any future audit by the SBA.