Retailers of new and used vehicles nationwide received between $7.6 billion and $11.89 billion in Paycheck Protection Program loans of $150,000 or more in the second quarter under the $660 billion federal program to save jobs during the COVID-19 pandemic.
According to data released this week by the Small Business Administration, 12,693 new-car dealerships collectively received between $6.97 billion and $10.36 billion in PPP loans. That figure represents about 76 percent of the 16,682 dealerships in the U.S., according to NADA's year-end 2019 count, and does not include those that took loans that were less than $150,000.
In addition, 1,988 used-car dealerships received between $625 million and $1.53 billion in PPP loans.
Exact loan amounts weren't available because the SBA provided ranges for the forgivable loans that were more than $150,000 rather than specific figures. The ranges reported were:
- $350,000-$1 million
- $1 million-$2 million
- $2 million-$5 million
- $5 million-$10 million
Loans between $150,000 and $10 million accounted for almost 75 percent of the loans granted under the program, the SBA said.
According to the SBA, the $660 billion PPP program has supported 51 million jobs nationally. The low-interest loans are forgivable under certain conditions, including if employers retain or rehire employees and maintain salary levels.
Forty-four new-vehicle and four used-vehicle retailers nationwide accepted the largest PPP loans — in the $5 million-$10 million range — according to the SBA data. The largest group of new-vehicle dealerships — 6,364 nationally — took out PPP loans that were between $350,000 and $1 million. Among used-car dealerships, the most popular loan amount was between $150,000 and $350,000, according to the data.
(Editor’s note: Crain Communications, the parent company of Automotive News, also received a PPP loan.)
Jared Allen, vice president of communications for the National Automobile Dealers Association, said in an email that the PPP "has been invaluable in keeping dealership employees on the payroll during this extremely challenging time for vehicle sales."
"In fact, every dealer NADA has heard from who received a PPP loan has used it to keep employees on the payroll, and/or bring back furloughed or terminated employees, even though economic conditions would have otherwise forced those dealers to make drastic and permanent workforce reductions.
"Furthermore, a great many dealers will end up devoting 100 percent of their PPP loans to payroll expenses. This is exactly what Congress intended when it created the program, meaning the program is working exactly as it should."
The SBA data does not give a complete picture of how many jobs were retained by the program among automotive retailers, because some loan data is either blank or lists zero as the number of jobs retained. However, among those for which the information was available, the SBA estimates that almost 746,000 jobs were retained at new and used dealerships nationwide as a result of the PPP loans.
Adam Robinson, CEO of Hireology, told Automotive News last month that PPP loans were common among nonpublic dealership groups, and, once the rules were clarified by Congress, helped to cushion what would have been a very sharp jobs decline in the industry.
"I believe, based on the data we're seeing, that hiring will continue to accelerate," Robinson said. "And somewhere around September or October, we will see the number of jobs in the industry approach what I think will be the new number on a permanent basis, and I believe that new number is going to be between five to 10 percent below where it used to be."