By: Auto Rental News Financial relief is coming to individuals and businesses, including car rental companies, that have been negatively impacted by the coronavirus outbreak. During the Auto Rental News webinar “Car Rental and the Coronavirus Pandemic: A Global Check In” on March 31, Greg Scott, public affairs representative for the American Car Rental Association (ACRA), outlined the various mechanisms for aid. This information has been subsequently updated with new guidance from the federal government as of the afternoon of March 31. Three pieces of U.S. federal legislation have been enacted to date. The first bill allocates about $8.3 billion to extend some unemployment benefits. The second, called The Family First Act, earmarks about $100 billion for sick leave and parental leave for those with the virus. The CARES Act, signed into law last Friday, is a $2.1 trillion financial assistance fund with a variety of mechanisms for individuals and businesses. The CARES Act divides companies by size: small, medium, and large. Paycheck Protection Under the CARES Act, the Paycheck Protection Program (PPP) is administered by the Small Business Administration (SBA). It authorizes up to $349 billion for small businesses of 500 or fewer employees at the time of the loan application. Applications open on April 3. The SBA has created a web page with PPP information. The PPP provides small businesses with funds to pay up to eight weeks of payroll costs including benefits. Funds can also be used to pay interest on mortgages, rent, and utilities. Small car rental companies might be familiar with the $38.5 million yearly revenue threshold to access SBA loans. For this purpose, the standard changes to 500 or fewer employees. Loans can be for up to two months of a company’s average monthly payroll costs from the last year plus an additional 25% of that amount, up to a maximum loan of $10 million. “If you're interested in trying to access one of those loans, the best avenue is to talk to an FDIC-insured bank or savings and loan,” Scott said. 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. If companies can bring back or rehire 90% of their total employee count through Sept. 30 within four months of the declared end of the emergency, they can ask for the loan to be forgiven. “Think of it almost as a covenant in your loan,” Scott said in the webinar. For small businesses, Scott has prepared a brief summary available on the ACRA website. Larger Businesses The loans designed for medium-sized business of 501 to 10,000 employees are part of a $465 billion fund that will be administered by the Federal Reserve and the Department of Treasury. It is unclear at this point if banks or the Treasury itself will handle this middle tier of loan disbursement, Scott said. The final tranche, for companies with over 10,000 employees, also accesses this fund. There are stipulations to the funds, such as a prohibition on breaking union contracts or paying dividends during the period of the loans. “We're looking for guidance from the Small Business Administration and the Treasury Department and we should have (more information) by Friday of this week or Monday of next week. This is a statutory deadline,” Scott said during the webinar. Congress may not be done in its legislative response to the pandemic. Discussions have already started regarding a fourth COVID-19 bill, including provisions that could direct targeted aid to specific industries. Specific to car rental companies that owe minimum annual guarantees to airports, “We are working through ACRA with the Department of Transportation and the Federal Aviation Administration, and those conversations have been going very well,” Scott said. He expects ACRA to receive guidance from the DOT and FAA in the next week to 10 days. ACRA’s board of directors and legal and legislative committee are engaged in discussions regarding the association’s goals for this legislation and will be communicating those goals to Capitol Hill and the Trump Administration, Scott said.