How The CARES Act Affects Car Rental in the U.S.
With business owners searching for answers from the government regarding financial aid, some light was shed with the recent approval of the CARES act, a $2.1 trillion financial assistance fund aimed for individuals and businesses. The CARES ACT, signed on March 27, divides companies by three categories: small, medium and large.
The act includes a Paycheck Protection Program (PPP) administered by the Small Business Association, which authorizes up to $349 billion for small businesses of 500 or fewer employees at the time of the loan application. The PPP provides the funds for small businesses to pay up to 8 weeks worth of payroll, with benefits. The funds can also be used to pay interest on expenses critical to staying open, including mortgages, rent and utilities.
Chris Brown of Auto Rental News went into further detail on the act: “These funds will be fully forgiven when used for payroll costs, interest on mortgages, rent, and utilities. However, forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.”
ACRA has also provided a brief summary of the act, which is available here.
More Acts To Come
Congress may not be done on providing aid for businesses amid the pandemic. A fourth COVID-19 bill is currently being discussed, which would include provisions with direct aid to specific industries. To make sense of all that’s going on as far as government assistance, Bobit Media recently organized a webinar addressing the CARES Act. The webinar, entitled Navigating The CARES Act for Small-and Medium Sized Businesses with Fleets. The webinar featured panelists from Bobit Media’s fleet crew. The panel discussed the following:
- Loan details, eligibility, and application requirements
- Loan forgiveness do’s and don’ts for fleets
- Other loan information such as the Economic Injury Disaster Loan Program
- Requirements for larger companies access to loans
- Updated information not covered in initial federal guidance
- What’s next? Information on a potential CARES Act 2.0
The webinar is available to view here.
The industry has rallied around each other, with more and more resources available to provide guidance on navigating through this difficult time. Car rental operators would be best advised to continue monitoring the aid that’s available and stay connected with other industry professionals.