"How well the program works and how well we come out of it, of course, will depend on how much forgiveness we get since we've already funded all that to the employees," said John Luciano, managing partner at Street Volkswagen of Amarillo in Texas.
With the program, Luciano said he was able to retain all 62 of his employees and has since added a couple of service jobs as business has picked up. But he said he may not have kept everyone on board if he knew a sizable chunk of the funds would be turned into a loan. "I don't think any of us were looking to go in debt," he said.
Luciano declined to say how much money he received, adding that he's still waiting to have a certain amount forgiven, but he noted the sum was "six figures." SBA data shows his Street Volkswagen store received in the range of $350,000 to $1 million.
Luciano remains cautiously optimistic, despite myriad changes to the program as it was rolled out, such as shifting filing deadlines and the time frame in which funds could be used for payroll.
"We took it for eight weeks and we paid it for eight weeks. The money's gone," he said. "So if the forgiveness comes in, this is as good as Cash for Clunkers."
Like others, Luciano is eagerly waiting to fill out a lender submission form for the loan forgiveness. But lenders apparently do not have a process in place for doing so yet, even though the SBA has a loan-forgiveness application, said Bob Shuman, owner of Shuman Chrysler-Dodge-Jeep-Ram of Walled Lake, Mich. And it's still not clear whether dealers such as Shuman are supposed to wait until a certain date — such as the end of an eight- or 24-week period, or until all of his employees are back on the payroll — before applying for the forgiveness.
It's just one aspect of what Shuman, a former attorney with an accounting degree, has called a "stunningly complex" program.
That's not to say it hasn't been a helpful one. "It's helped us immensely," he said, adding that his store would have stayed closed if not for the aid, which was in the $350,000 to $1 million range, according to the SBA data.
Michigan was among the strictest states in the U.S. in terms of how dealerships were allowed to operate at the onset of the pandemic. Dealerships were forced to close all sales operations March 24, before being allowed to conduct online sales beginning April 9. In-person sales were given the go-ahead on May 26.
Shuman applied for the funds early on, concerned that there was not going to be enough money for everyone. He tracked the meandering process with a hefty amount of anxiety.
He got a call on the morning of Easter Sunday, April 12. It was his banker, calling to tell him his loan had been approved, and he would have the money that Monday.
"And it was, it was crazy," he said. "It was the most stressful thing I've ever done."
Now, the anticipation has turned to what happens to the money that has been doled out.
Shuman likened it to another race, just like the one that involved businesses initially lining up to get the funds. "When the forgiveness flag drops," he said, "we'll all be trying to get it forgiven."