NORTH RICHLAND HILLS, Texas — The Automotive Service Association (ASA) is encouraging vehicle service shops facing financial trouble due to the COVID-19 pandemic to take advantage of the $2 trillion COVID-19 economic stimulus package passed by Congress last week.
During a media briefing March 31 on the COVID-19 pandemic, ASA Executive Director Ray Fisher urged those small businesses facing financial trouble to "throw pride out the window and take advantage" of the federal support offered under the Coronavirus Aid, Relief and Economic Security (CARES) Act.
The legislation provides $377 billion in funding to support small businesses, including provisions for loans to cover payroll under the Paycheck Protection Program (PPP) and expedited processing of SBA economic injury disaster loans (EIDL).
The ASA encourages small businesses impacted by the pandemic to apply for both the PPP and the EIDL — however, the loans cannot both be used for the same thing, such as payroll.
And businesses are urged to file their claims as soon as possible, even if they have never applied for federal loans in the past.
The PPP is arranged through a business' lender and the EIDL is administered through the U.S. Small Business Administration (SBA).
The PPP provides small businesses with zero-fee loans of up to $10 million or 2 1/2 months of payroll so businesses can retain and continue to pay their employees.
The loan costs will be forgiven if the business retains its employees and their salary levels. Principal and interest are deferred for up to a year and all borrower fees are waived.
The EIDL provide up to $2 million with interest rates up to 3.75% for companies to use to pay for expenses that could have been met had the disaster not occurred.
A grant of $10,000 is provided to small businesses that apply and it doesn't need to be repaid, even if the grantee subsequently is denied an EIDL, and may be used to provide paid sick leave to employees, maintaining payroll, meet increased production costs due to supply-chain disruptions or pay business obligations, including debts, rent and mortgage payments.