Congress overwhelmingly passed a bill extending the Paycheque Protection Program to May 31.
“I congratulate the Senate for its swift and decisive action in adopting my bipartite law on the extension of PPPs”, House godmother, Representative Carolyn Bourdeaux, D-Ga., Said in a statement. “Small businesses are hurting. It’s not a Democratic problem or a Republican problem, it’s an American problem.
“This bill was initiated by local business owners in my district, who shared their concerns with me about the P3 application period scheduled to end in March and its impact on small businesses. This bill will extend that time frame, giving more of our small businesses access to much-needed funds. It also creates a one-month processing period to avoid bureaucratic delays in distributing funds.
“When I ran for office, I promised to work with good faith people on both sides of the aisle to get things done for Georgians. Today’s bipartisan adoption of the PPP Extension Law reflects this commitment. I thank President Velázquez, Ranking Member Luetkemeyer, Congressman Kim, President Cardin, Senator Collins, Senator Shaheen and everyone who voted to support small business in both the House and Senate in adopting this bill.
Without this extension, the deadline for auto body shops and other small businesses to take out a first or second PPP loan would be Wednesday, March 31.
“The PPP has been a huge success, supporting millions of small businesses and tens of millions of jobs,” Senate godfather Senator Susan Collins, of R-Maine, said in a statement. “Since last spring, when we created PfP, members of Congress on both sides of the aisle have taken steps on several occasions to increase funding and flexibility for the program. I am glad that Congress has come together once again today to help more small businesses access this lifeline by extending the deadline to apply for these forgivable loans. “
Collins said nearly 100 organizations approved the bill.
“Small business owners continue to assess their financial needs as they strive to recover from the COVID-19 pandemic,” National Federation of Independent Business vice chairman of federal relations Kevin Kuhlman said in a statement Thursday. “NFIB research indicates that economic conditions remain challenging and that economic recovery is uneven for small businesses, especially those that still manage national and local regulations and restrictions. Today’s move to extend P3 loan program authorization is good news for homeowners who can take advantage of the extra time. The legislation also provides an additional 30 days for the SBA to process open requests, ensuring that small businesses are not unfairly harmed by delays in processing the SBA. The NFIB strongly supports the PPP Extension Act of 2021. ”
Bodywork companies using the PPP 2021
A large segment of the accident repair industry adopted the original PPP, which ran from April 3 to August 8, 2020 (with a brief hiatus during this time). Congress resuscitated him by December 2020, this time offering a chance for a second loan, and it officially resumed on January 11, 2021.
Loans and their interest are fully forgivable as long as the store spends all or most of the money on employee salaries and the remainder on authorized critical expenses, such as utilities.
The PPP 2020 initiative has disseminated more than $ 520 billion, including more than $ 100 billion available unsolicited. So far, 2.1 million of the 5.2 million PPP 2020 loans have been canceled.
The 2021 version originally had $ 284.45 billion to lend; Congress recently invested an additional $ 7.25 billion and made more entities eligible with House Resolution 1319 the “American Rescue Plan Act”.
From March 21st, more than $ 195.8 billion of that money available for 2021 has been disbursed to more than 3.1 million “first-draw” or “second-draw” PPP borrowers, the SBA said.
The most current company-specific SBA data indicates 8,435 companies in the NAICS 811121 “Auto Body, Paint and Interior Repair and Maintenance” The sector has already collectively received nearly $ 660.4 million in PPP loans between January 14 and March 3.
The “auto body” industry’s smallest loan this year allocated $ 250 to a sole proprietorship in Minnesota, while four companies in the sector received approval for up to $ 2 million. The average loan in 2021 was 78,292.82
Together, the companies accounted for 62,974 jobs in the industry, with an average of nearly 7.47 employees per bodybuilder.
It appears that 1,562 of these companies received their first PPP loan this year. The other 6,873 6,873 “auto body” companies were stores that qualified for PPP “second draw” funds after receiving a loan during the initial period of April 3 to August. 8, 2020, PPP executed.
“ First draw ” and “ second draw ” PPP loans
The “first draw” PPP loans in 2021 lend up to $ 10 million to businesses with 500 or fewer employees that did not get a loan last year. These fully repayable loans mostly follow the same rules as the 2020 PPP, including qualifying by attesting to good faith: “The current economic uncertainty makes this loan request necessary to support the applicant’s ongoing operations.”
“Second Draw” PPP loans are up to a maximum of $ 2 million and are only available to businesses with 300 or fewer employees. This time around, the company must have seen a 25% drop in gross revenue for at least a quarter in 2020.
The SBA said companies could prove this reduction in gross revenue through quarterly financial statements, bank statements or tax returns.
A 25% drop in a quarter of 2020 is an extremely likely scenario for bodybuilders, even if the industry is allowed to remain open as core businesses.
On average, repairable auto claims – a key indicator of accident repair revenue – declined 35% nationally in the second quarter of 2020, according to CCC. Claims were still down nearly 20% in the third and fourth quarters of 2020.
Or to see it another way: Boyd Group Services – which derives 90% of its revenue from the United States, and the majority of that of the national collision chain Gerber – saw a 33% drop in sales in comparable stores in the second quarter of 2020.
No collateral or collateral is required for a PPP loan, and there are no fees to apply. Businesses can borrow the equivalent of 10 weeks’ pay capped at $ 100,000 per employee. Money can only be spent on “salary costs, including employee benefits, and can also be used to pay mortgage interest, rent, utilities, worker protection costs related to COVID-19,” the costs of uninsured property damage caused by looting or vandalism in 2020, and certain supplier operating costs and expenses. “
The “first draw” and “second draw” PPP loans and their 1 percent interest are fully repayable if the borrower complies with the necessary rules, including preserving jobs and wages and spending at least 60%. percent of the money on the payroll.
The SBA recently gave the country’s smallest businesses – those with fewer than 20 employees – an exclusive window from February 24 to March 9 in which only they would be considered for PPP loans.
The agency has also taken steps to make the program even more user-friendly.
In addition, on March 5, the SBA implemented the rest of the changes made by the president, including change the formula for Schedule C filers, remove exclusion restrictions on student loans and non-fraudulent felony convictions, and ensure access for immigrant business owners,” the SBA wrote in a press release on March 9. (Emphasis added by SBA.) “We’re also starting to see early momentum with these changes.”
Be heard: President Biden can be reached here.
Representative Carolyn Bourdeaux, March 25, 2021
Senator Susan Collins, March 25, 2021
The US Capitol is displayed. (ajansen / iStock)
United States Representative Carolyn Bourdeaux, D-Ga. (Provided by the Clerk of the House)
US Senator Susan Collins, R-Maine, is pictured. (Provided by Collins’ office)
The “auto body, paint and interior repair and maintenance” facilities received more than $ 2 billion in paycheck protection program loans in 2020. (treety / iStock)