BSM Shareholder, Richard Sox, and his team are actively assisting dealers ready their PPP Loan Forgiveness applications for submission to their lender. This assistance includes answering questions related to interpretation of the SBA promulgated rules related to the use of loan proceeds, seeking forgiveness and the various safe harbors which may apply to reductions to the forgiveness amount.
A large part of BSM’s work in assisting with PPP Loan Forgiveness applications is assisting dealers with documenting their eligibility for the loan. This effort involves a look back at the economic circumstances at the time of the initial loan application, then current and expected federal, state and local restrictions related to the pandemic which affected the movement of customers and dealership personnel as well as the closure of some or all of the dealership’s operations, the threat of being forced to reduce dealership personnel in the face of expected slow-down in business, OEM closures of vehicle manufacturing plants, interruptions to the vehicle manufacturing supply chain due to the international impact of the pandemic, and a lack of easy access to outside capital.
Documenting the economic uncertainty which existed at the time of a dealership’s loan application will be of great benefit if the dealership’s loan is audited by the Small Business Administration and, in particular, for those entities who have been guaranteed an audit by virtue of receiving a loan in excess of $2 million. There is no doubt that the dealership’s eligibility for the loan will be a part of the SBA’s audit checklist.