Tag: PPP

By on July 31, 2020

The automotive industry has borrowed an estimated $132 billion since the world started taking the coronavirus more seriously, according to a recent analysis by Bloomberg.

Despite migrating around the planet months before anyone thought to close down a single airport or suggest masks were necessary, March is broadly viewed as the start of the pandemic in the Western World, as that’s when most governments started taking direct action and businesses started looking for handouts. Still, it’s exceptionally difficult to follow the money if you didn’t devote yourself entirely to the task of tracking payments while under shelter-in-place orders.

We do know that a lot of money was being thrown around, however. Car dealerships were among the largest recipients of Paycheck Protection Program (PPP) funds in the United States, garnering anywhere from $7.5 billion to $12 billion in government aid to maintain staff. Plenty of criticism over exactly where that money went arose as the press questioned which businesses were more deserving and who was just taking advantage of the system.

But it’s only the tip of the iceberg. PPP funds don’t need to repaid unless they weren’t earmarked entirely for payroll purposes; the government also used the program to send over $600 billion to support banks in extending low-interest loans to companies during the pandemic. The automotive industry was one of the largest beneficiaries of that arrangement.

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By on April 28, 2020

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.  (Read More…)

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