Auto auctions are eligible for assistance from the federal government under the Coronavirus Aid, Relief, and Economic Security (CARES) Act which opened on Friday, April 3.
Auctions should begin applying for assistance now, advised Small Business Administration official R. Gregg White during a Q&A with the NAAA. He said that the government’s $2 trillion relief package contains about $377 billion in aid to support America’s small businesses impacted by the financial fallout from the health crisis, which can apply to auctions.
Two of the relief options White highlighted are Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL).
PPP provides loans that will be fully forgiven when used for at least 75% of payroll costs, as well as interest on mortgages, rent, and utilities. No collateral or personal guarantees are required, loan payments will be deferred for six months, and neither the government nor SBA-certified lenders will charge small businesses any fees.
Meanwhile, EIDL advance will provide up to $10,000 of economic relief for working capital needs to businesses that are currently experiencing temporary loss of revenue and will not have to be repaid.
White noted that auctions can apply for both the PPP and EIDL, but they can’t use the funds from each loan for the same expenses, such as payroll, rent, or insurance. Other aid programs that are available are the SBA Express Bridge Loans, and the SBA Debt Relief offers a financial reprieve to small businesses during the pandemic.