Pub. 19 2020-2021 Issue 4

N E W J E R S E Y C O A L I T I O N O F A U T O M O T I V E R E T A I L E R S I S S U E 4 | 2 0 2 0 24 new jersey auto retailer Paycheck Protection Plan ( PPP ) Forgiveness BY WILFREDO FERNANDEZ AND GIUSEPPE BUETI 2020 has become a roller coaster year for auto dealers. Everything appeared to be moving along just fine until the arrival of COVID-19. The spring was a period of uncertain- ty for dealers. Dealerships were forced to brief ly shutter their doors, resulting in a significant reduction in revenue, furloughed or laid off employees and the rise of financial uncertainty. In late April, the Federal government injected stimulus into the economy through the CARES Act that included the Paycheck Protection Program ( PPP ). The opportunity to obtain a PPP loan provided dealers with the financial beacon to guide them through the fog of COVID-19. Now, dealers need to focus on PPP Loan Forgiveness. Necessity Certification On October 26, 2020, the Small Business Administration ( SBA ) published a notice related to additional filing forms, with the intent to gather supplemental information. Form 3509 will be used for documenting the necessity certification. This form requires financial information related to business activity and liquidity for those whose PPP loan(s) ( including affiliates ) is in excess of $2,000,000. The intent is to facilitate the collection of supplemental information ( including certifications and disclosure of quarterly revenues, distributions, compensation levels to owners and employees and more ). SBA loan reviewers, to evaluate the good- faith certification that was made on the PPP borrower applica- tion that economic uncertainty made the loan request necessary, will use this information. The form will be issued by the lender servicing the loan, and the completed form is due within 10 business days of receipt from the lender. Does this recent filing requirement apply to auto dealers? Any individual dealership that obtained a PPP loan of $2M or more must complete Form 3509. Does the additional disclosure required by Form 3509 apply to an auto dealer with affiliated dealerships that obtained loans of less than $2M but taken together exceeded $2M? The draft instructions for Form 3509, reference 85 FR 20817, issued