Auto Dealers

Over the past few weeks, the Paycheck Protection Program (PPP) has undergone significant changes as outlined in the Consolidated Appropriations Act, 2021. The Small Business Administration (SBA) has made several updates including the introduction of SBA Form 3508S, forgiveness application for loans less than $150,000, and updated both SBA Form 3508 and Form 3508EZ. In addition, Procedural Guidance was also issued outlining how PPP borrowers can apply for loan increases. For Atlanta businesses considering a first time PPP loan, the SBA released guidance on how to calculate loan maximums and required documentation. The guidance provides important information to review prior to applying because the calculation formula and documentation requirements vary based on the entity type.

Late last night Congress approved a long-awaited second COVID-19 economic stimulus package that provides over $900B in needed relief to individuals and support for businesses. While the most reported aspect is the $600 stimulus checks for individual taxpayers, it is important not to overlook the expansion and changes to the popular Paycheck Protection Program (PPP). Many Atlanta businesses that received a loan have been eagerly awaiting an update.

When the Small Business Administration (SBA) announced in late October that it will introduce a new Loan Necessity Questionnaire it created concerns about loan forgiveness eligibility. Borrowers with loans of $2M or greater are required to complete either SBA Form 3509 or 3510 depending on whether the borrower is a for-profit business or a nonprofit organization. The purpose is to help the SBA determine, for loan forgiveness purposes, whether the good faith certification about economic necessity made the loan necessary to support ongoing operations. Unfortunately, there were no comments or guidance issued when the announcement was originally made leaving the 42,000 impacted borrowers with more questions than answers.

Ahead of Inauguration Day next month, businesses are preparing for a wide-ranging possibility of tax changes and increases under the new Administration. He campaigned on a platform of tax increases for those earning more than $40,000 per year and rolling back select business tax cuts made in the Tax Cuts and Jobs Act of 2017 (tax reform). This includes an increase in the corporate tax rate to 28%, phase-out of the Section 199a deduction, 15% tax on corporate book income, and more.

U.S. independent auto dealerships started 2020 with a measured and slightly positive outlook and will be ending the year like most other industries: down. The coronavirus pandemic has shattered and reshaped outlooks for practically every sector, including auto dealerships. That is not to say that 2020 has not been without its opportunities, however, as there are several positive forward-looking trends that spell opportunity.

If there is one word that best describes 2020 it would have to be instability. The COVID-19 pandemic has created new challenges for individuals, businesses, and organizations. Efforts designed to flatten the curve while important to public health have created dire economic conditions. Businesses were hit sharply when forced business closures and modified operation regulations were implemented leaving many without the ability to generate income.

The arrival of the COVID-19 pandemic made significant changes to daily life through forced business closures, stay at home orders, and heightened fear of contraction. The convergence of these changes left many businesses forced shut and others with an altered business model and a dwindling demand for products and services.

The start of a new year is a time of renewed vigor, increased energy and broad optimism. Capitalizing on this, many businesses have carefully reviewed strategy, established tactics, set the budget and are now focused on execution. While specific opportunities vary by company size and industry, the goal is almost always the same – to increase growth and revenue. 

The answer to this important question will vary between companies and industries. There are some Atlanta companies that naturally face higher fraud exposure because of the type of business, how services are delivered and where the opportunity for fraud occurs. Whatever your industry, it’s important to understand your company’s risk profile and areas of opportunity for fraudulent activities.  While most focus on growing the company through strategic planning, new business development, customer service, and account management, it’s imperative not to overlook this important exercise.

Earlier this month, the Financial Accounting Standards Board (FASB) announced they extended the effective dates for the new lease accounting standard. It had been rumored for months that the FASB would make this adjustment for non-public entities, and the day has finally come. Public entities struggled to overhaul their business processes in time to comply by their effective date of January 1st of this year, and non-public entities implored the FASB to help them avoid a similar result. The FASB heard these requests from industry groups, professional organizations, and private businesses nationwide and agreed to push back the effective date for non-public entities.