The COVID-19 pandemic has hit many small businesses hard over the last year. At AutoCenter Sales, we understand operating a profitable automotive business during tough economic times can be incredibly challenging. We’re here to share some helpful information that may benefit your situation.
As part of the latest round of federal stimulus, the Small Business Administration is offering to cover several months of loan payments for existing SBA borrowers. Read on to learn about what the SBA is doing to provide additional debt relief to small automotive business owners.
Debt Relief for Automotive Businesses With 7(a), 504, or Microloans
The latest round of stimulus, signed into law on December 27, 2020, includes billions of dollars in aid for small businesses that are struggling to recover from the impact of COVID-19. Included in the stimulus package is loan forgiveness for all 7(a), 504, and Microloans approved as of September 27, 2020 — even if the loan had not yet been fully dispersed.
If you own an automotive business, still owe on one of these types of loans, and meet the criteria, the SBA will cover six months of principal, interest, and any related fees for you. However, this debt relief does not apply to loans issued under the Economic Injury Disaster Loan (EIDL) program. It also excludes PPP loans.
If you meet the requirements for debt relief, the SBA will provide payment assistance automatically. You do not need to apply for it. Here’s how it works:
● Loans in deferment. When the deferment period ends, the SBA will begin making your monthly loan payments for a total of 6 monthly installments.
● Loans not in deferment. When your next payment is due on an eligible loan, the SBA will begin covering your monthly payments on that loan for the following six months.
Certain borrowers may also qualify for extended debt relief payments beyond the six-month period. Through the Economic Aid Act, borrowers can get additional payment assistance based on the date their loan was approved. To find out whether you qualify and the level of assistance that’s available to you, you’ll need to contact your lender.
You can learn more about the SBA’s latest round of debt relief at sba.gov. For more information on Coronavirus relief options for small businesses, check out Coronavirus: Small Business Guidance & Loan Resources.
What If COVID-19 Hasn’t Severely Impacted Your Business? Do You Qualify for Federal Aid?
If you own a small automotive business that hasn’t been significantly affected by the pandemic, you can still get debt relief for a 7(a), 504, or Microloan issued before September 27, 2020. A huge perk of this SBA debt relief provision is that existing borrowers who owe on these types of loans can take advantage of the program regardless of their financial status.
The overarching aim of the provision is economic recovery. By forgiving six months of loan payments — even for small automotive businesses that aren’t struggling — the SBA is essentially making it more affordable for businesses to grow as the economy recoups throughout 2021.
Ready to Buy or Sell an Automotive Business? Contact AutoCenter Sales
Looking to invest in a profitable auto shop? Ready to sell your auto shop? Let our team at AutoCenter Sales help you secure the best deal possible. For over 25 years, we’ve been helping automotive professionals throughout the United States successfully buy and sell their businesses. As one of the leading automotive business brokerages in the country, we have the experience, industry connections, and resources to outperform the competition.
To learn more about our services and how we can help you, call us today at 1-800-874-5793 or send us a message for more information.