Small Business Administration Keeping Closer Tabs on Loan Forgiveness

Matt Posky
by Matt Posky

With enhanced scrutiny and plenty of differing opinions being heaped upon the government loans issued to help soften the economic impact of the coronavirus pandemic, the Small Business Administration (SBA) has signaled plans to conduct comprehensive investigations before offering any loan forgiveness. Under normal circumstances, one would expect that to be the typical course of action for all loans. But the scope of the Paycheck Protection Program (PPP) has complicated things.

Designed to provide a direct incentive for small businesses to keep workers on the payroll, the program earned heaps of criticism after millions of dollars were allocated to groups that didn’t exactly constitute small businesses. While the list is long, standouts include the Los Angles Lakers and Ruth’s Hospitality Group. We’re more interested in the United States’ largest new-vehicle retailers, AutoNation and Penske Automotive — both of which received millions via the SBA’s Paycheck Protection Program.

Responding to criticism, AutoNation announced it would return the $77 million in loans last Thursday. It also planned to cancel all of its existing loan applications. Penske beat it to the punch by one day, doing the same while making itself look slightly better by beating updated guidance from the SBA requiring all “large businesses” to certify they have a valid need for funding through the coronavirus relief package.

While neither really fit the definition of a small business, many complained that such companies employ sizable numbers and should be given aid when needed. Of course, the counterpoint is that bigger businesses often have robust cash reserves that must be taken into account — which sounds like something the Department of the Treasury would like to see happen.

On Tuesday, Treasury Secretary Steven Mnuchin said the SBA will critically examine all PPP loans valued at more than $2 million. Bemoaning the fact that the second most-valuable NBA franchise in existence (the LA Lakers) managed to snag $4.6 million on CNBC, Mnuchin said he was glad to see them return the money — suggesting they’d otherwise be open to legal ramifications. He said the same about AutoNation.

So what happened? Well, the government started offering free money and everyone wanted some. The original $349 billion forgivable loan program exhausted its funds sooner than anyone expected; President Donald Trump has since signed a $484 billion spending package that dumps another $321 billion into the Paycheck Protection Program. However, that new round of funding isn’t expected to last more than a couple of weeks. Hopefully that sees the U.S. through the worst of the economic strain caused by the pandemic, as most of the automotive industry plans on relaunching production by mid-May.

[Image: Casimiro PT/Shutterstock]

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

More by Matt Posky

Comments
Join the conversation
4 of 13 comments
  • Inside Looking Out Inside Looking Out on Apr 28, 2020

    Did GM, FIAT and Ford also apply for that loan? The Big 3 is not big anymore. I would call them rather Small 3.

  • Speedlaw Speedlaw on Apr 29, 2020

    You’ve made my day. FB has a winger friend with that video “FB censors” outrage. I follow a TTAC time waster link on PPP loans (my bank would not take any, so of interest) and I get the debunk on the winger friend’s unhappy about censorship video. The internet is now officially a circle. edit:removed a nonprofane/nonsexist/nonracial word the TTAC filter dislikes.

  • Mike Audi has been using a3 a4 a5 a6 a7 a8 for a long time and i think it makes sense. But, they are rumored to be changing it all again within a year ir two.
  • Golden2husky Match the tool to the job. This would be ideal for those who have dreadful, traffic filled commutes. I'd certainly go the SE route - wheel sizes are beyond bordering on dumb today and 17s are plenty. Plus the added mileage is a real advantage. I would have been able to commute to work with very little gas usage. The prior Prius' were dreadful to drive - I gave mine back to the fleet guy at work for something else - but this seems like they hit their mark. Now, about that steering wheel and dash design...No mention of the driving aids for improving mileage but I'll assume they are very much like they were in earlier models - which is to say superb. A bit of constructive criticism - on a vehicle like this the reviewer should really get into such systems as mileage is the reason for this car. Just like I would expect to see performance systems such as launch control, etc to be commented on for performance models.
  • Arthur Dailey Rootes Motors actually had a car assembly facility in Scarborough ( a suburb in the east end of Toronto), during the 1950's and early 1960s. It was on the south-west corner of Warden and Eglinton located at 1921 Eglinton Avenue East. The building still exists and you can still see it on Google maps. That part of Scarboro was known as the Golden Mile and also had the Headquarters for VW Canada, and the GM van plant.Also at 2689 Steeles Avenue West in Toronto (the south east corner of Steeles and Petrolia) is what is still shown on Google Maps as 'The Lada Building'. It still has large Lada signs and the Lada logo on the east and west facades of the building. You can see these if you go to the street view. Not sure how much longer they will be there as the building just went up for sale this month. In Canada as well as Ladas and Skodas we also got Dacias. But not Yugos. Canada also got a great many British vehicles until the US-Canada trade pact due to Commonwealth connections. Due to different market demands, Canadians purchased per capita more standards and smaller cars including hatches. Stripped versions, generally small hatchbacks, with manual transmission, windows, door locks and no A/C were known as 'Quebec specials' as our Francophone population had almost European preferences in vehicles. As noted in previous posts, for decades Canadian Pontiacs were actually Chevs with Pontiac bodies and brightwork. This made them comparatively less expensive and therefore Pontiac sold better per capita in Canada than in the USA.
  • Ajla As a single vehicle household with access to an available 120v plug a PHEV works about perfectly. My driving is either under 40 miles or over 275 miles. The annual insurance difference between two car (a $20K ev and $20K ICE) and single car ($40K PHEV) would equal about 8 years of Prius Prime oil changes.
  • Ronin Let's see the actuals first, then we can decide using science.What has been the effect of auto pollution levels since the 70s when pollution control devices were first introduced? Since the 80s when they were increased?How much has auto pollution specifically been reduced since the introduction of hybrid vehicles? Of e-vehicles?We should well be able to measure the benefits by now, by category of engine. We shouldn't have to continue to just guess the benefits. And if we can't specifically and in detail measure the benefits by now, it should make a rational person wonder if there really are any real world benefits.
Next