The Small Business Administration data was released this summer proposes the federal COVID-19 economic disaster credit program More than $ 200 million in small business loans have been made to more than 2,000 body shops.
And the EIDL upfront program helped more than twice as many repair shops, giving them millions of dollars in essentially free government grants.
Congress created both programs under the CARES Act this spring and later The initiatives were given a further wave of funding.
The 3.75 percent coronavirus EIDL 30-year loans totaled a maximum of $ 2 million and were deferred for one year. They could be used for “(w) working capital and normal operating costs”. according to the SBA. With the associated EIDL grant program, applicants could receive an advance of $ 1,000 per employee up to $ 10,000 that they never had to repay – even if the loan itself was declined.
Any company with 500 or fewer employees was eligible for either of the two EIDL programs, and the data shows that the small businesses in the collision repair industry benefited from both.
Precise repair aid difficult to grasp
The COVID-19 loan and grant assistance programs may have provided the collision industry with even more financial support than the data we have available suggests.
The latest detailed SBA deal-specific data was released on July 20, and the most recent body shop-related loans and advances are as of June 30.
However, COVID-19 EIDL loans continued both after and after the date are still available today for stores that need them. The EIDL funding program ended on July 11th. based on an SBA announcement that it had completed the donation of all of the $ 20 billion that Congress had allocated.
The SBA data also failed to provide the official NAICS industry classification codes for the individual company that received the aid.
If this information had been in place, we could have reduced the SBA record to only reflect companies that have been classified by the government as NAICS 811121 “Body, Paint and Interior Repairs and Maintenance”. We could be reasonably certain that our analysis covered only those companies that mattered and excluded those that didn’t.
In the absence of this critical information or other insight into broader industries, the Catastrophe Loan for Economic Injury and upfront data lacked that we had to resort to more crude analysis to examine the impact of these programs on the collision industry.
The best we could do was Sort the mentioned EIDL loan and the advance recipients according to five terms: “Collision”, “Crash”, “Body shop”, “Body” and “Body repair” and throw out duplicates that were found when searching for an overlap. (For example, to prevent a hypothetical “XYZ Collision Auto Body Repair” from being counted three times.)
This caught some independent companies and ruled out collision repairs with names missing any of those five terms, but it was the best we could do considering what we had to work with. Hopefully the unrelated companies and overlooked companies have balanced each other out a little.
We are also unable to record recipients of EIDL bodies that are organized as sole proprietorships or independent contractual partners, if such exist. The SBA has edited the names of all of these companies. ((Major media have sued to divulge this information. You won a critical decision, but the SBA has temporarily won a residency and may appeal.)
With this in mind, here’s what we learned about the EIDL.
Broader and more conservative analyzes
The EIDL records show 2,719 companies with a company name that includes one or more of our five search terms that have been approved for one of the small business loans.
Together, these companies have borrowed approximately $ 273.7 million based on the face values of the EIDL loans.
The average company called Collision, Crash, Body Shop, Car Body, or Body Repair has borrowed about $ 100,663. The median loan was $ 111,400.
Nineteen companies have borrowed $ 500,000, the maximum loan in the industry. Nineteen companies borrowed $ 1,000, the minimum amount that is reflected in the data.
Using these five search terms again, we found 5,960 companies using the EIDL loan advance option, of which 1,383 received the maximum advance of $ 10,000. Together, they took home this totally forgivable government grant valued at $ 32.2 million.
The average EIDL grant was approximately $ 5,395, with an average advance of $ 5,000.
Oddly enough, four stores appear to have received negative grant amounts. It’s unclear if this was a government typo or if the stores first took the advances but returned the money. We leave these amounts as they are.
It is interesting to note that there is a huge disparity between companies that apply for a loan advance and companies that actually received the loan. Was the credit process too strict and too quick to turn down some repair issues at the heart of the COVID-19 issue? Did some other stores claim the non-binding advances knowing they were likely to be declined for the actual loans?
Unlike the Paycheck Protection Program, EIDL Support does not track the number of employees supported by the loans and grants.
However, you can get an overview of the workforce by checking the advance amounts. The government has allocated $ 1,000 per worker up to $ 10,000. $ 32.2 million divided by $ 1,000 per employee impacts approximately 32,200 industry professional jobs supported by either a government grant or an actual EIDL loan. (Keep in mind that fewer than half of the fellows actually received a loan.)
834 “Collision,” “Crash,” “Body Shop,” “Car Body,” or “Body Repair” companies requested an advance of $ 1,000, indicating that an individual employee is affected. The $ 10,000 increased to 1,383 companies reflects at least 10 employees in each of them.
A more conservative analysis of the list, using only the terms “collision” and “body”, found that 2,273 companies will collectively receive approximately $ 236.1 million. The average loan was about $ 103,874 and the median was $ 125,000.
EIDL grant recipients were also identified more than twice as many as businesses eligible for EIDL loans. We found 4,902 companies whose names included “body” or “collision” and used the EIDL grant for approximately $ 27.2 million in aid.
The average EIDL grant for these was about $ 5,553. The median grant was $ 5,000.
Small Business Administration, July 20, 2020
Small Business Administration, July 20, 2020
Small Business Administration data released this summer suggests that the federal COVID-19 economic violations loan program has extended more than $ 200 million worth of small business loans to more than 2,000 auto repair shops. (Sorbetto / iStock)
Republican President Donald Trump signed the CARES bill on March 27, 2020. (Provided by Trump)