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|COVID Frequently Asked Questions|
The following list of frequently asked questions and answers uses real-world questions from dealers and insight into the research and analysis that MRAA has conducted on behalf of our industry and our dealers. Please use it as a guide, but make sure to consult your appropriate government offices and legal counsel before proceeding with specific actions.
Updated April 15, 2020
Q: On March 18, the President signed the Families First Coronavirus Response Act into law. Can you talk about this and how it will impact our dealerships?
A: The Families First Coronavirus Response Act temporarily expands unemployment benefits, emergency paid sick leave, and other forms of social assistance. Employers with fewer than 500 employees will be subject to the expanded emergency paid family leave and emergency paid sick leave. Employers will receive a tax credit for 100% of the costs of providing paid sick leave or paid family leave for COVID-19 related reasons.
MRAA created a one-pager outlining this legislation, which can be accessed here.
Q: We misinterpreted the 10 days of sick leave allowed for in the Families First Act. We thought it was for everybody, but we now realize it's for employees that are quarantined only. Can you provide definition on this?
A: Emergency paid family leave and emergency paid sick leave is for qualifying employees who cannot work or telework and are subject to a coronavirus isolation order. This order must be advised by a healthcare provider to self-quarantine due to potential exposure, or the employee must be caring for a family member who has a COVID-19 diagnosis. MRAA has a one-pager outlining the Families First Coronavirus Response Act, which can be accessed here.
Q: There was a two-trillion-dollar stimulus package passed. Do you have a quick, concise explanation of this package that applies to running our dealerships?
A: Yes. The Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, was signed into law on March 27th. The legislation provides $250 billion in unemployment benefits for workers; $300 billion for small business loans, subsidies, and paycheck protection; as well as tax-based benefits. MRAA prepared materials outlining the CARES Act, which can be accessed here.
Q: We work really hard to hire amazing people. We don't want to be in the position where we can't employ them. What specific programs will enable or supplement the wages for staff to lessen the economic impact on them?
A: The CARES Act includes funding for a Paycheck Protection Program, which expands upon the Small Business Administration’s 7(a) loan program to allow financial institutions to issue loans that provide eight weeks of cash-flow assistance to small businesses with fewer than 500 employees, or self-employed individuals, through federally guaranteed loans. These loans are expected to become available on April 3.
Employers can also access Economic Injury Disaster Loans (EIDL), which were part of the first stimulus package passed on March 6, to maintain payroll, provide paid sick leave, and address other debt obligations and overhead costs.
For more information on these programs, see the MRAA outline of the CARES Act.
Q: We do not have a large payroll so we do not need to apply for the Paycheck Protection Program (PPP) loans. Are there any other business grants and forgivable loans that we are not aware of?
A: Here’s a solid outline of each program. Besides PPP, you can apply for an Economic Injury Disaster Loan. Instructions to apply here, and application here. Within three days of applying, you can receive $10,000 for immediate assistance. This loan does not need to be repaid if it is used to:
EIDL funds are capped at a maximum of $2 million, while PPP is a maximum of $10 million. To see what you could receive under each loan, check out this resource. MRAA is working with SBA and Congress to fix PPP to be more relevant to seasonal businesses so they can get as much money as was originally intended.
Q: I have heard various rumors about programs that would loan companies money, and after 60 days, the loan would be forgiven if the funds are disbursed to the employees. This make good sense to me, but is it fake news?
A: The Federal Government approved two types of loans that could be forgiven, as long as they meet certain requirements. If a business applies for an Economic Injury Disaster Loan, then if the employer maintains its average number of employees during the eight-week period beginning on the date of the origination of the loan, then the portion of the loan used to cover payroll costs, interest on mortgage, rent, utilities may be forgiven. If a business applies for a Paycheck Protection Program loan, then if the employer maintains payroll, the portion of the loan used to cover payroll costs, interest on mortgage, rent, utilities may be forgiven. To encourage businesses to rehire staff, and to not cut wages, the amount forgiven is proportional to any changes in the number of staff employed, compared to the same time last year, or a reduction in pay beyond 25% of an employee’s prior compensation.
Q: How do we apply for help in the event we need it?
Some states are beginning to offer financial assistance to small businesses, and can be accessed from the state’s website. A great resource through the National Governor’s Association can be accessed on their State/Territorial Resource Pages.
Small businesses can apply to the new federal programs at the links below.
Q: Can you advise us as to where the stumbling points are to disqualify small businesses from the loan forgiveness?
A: Qualifying small businesses can apply for both the Paycheck Protection Program loans with their local lenders AND Economic Injury Disaster Loans as long as they are used to cover different expenses. Businesses can apply for EIDL funds directly through the SBA website (Apply to this grant program here). These loans can be forgiven if they meet certain requirements. The U.S. Chamber of Commerce has a nice resource outlining this here.
If a business accepts either one of these loans, they will not be eligible for a refundable payroll tax credit created through the CARES Act. More information here.
Each loan application lists disqualifiers for each loan, including previous history of taking an SBA loan that caused a loss to the government, is currently delinquent, has resulted in default, or if the company is presently involved in any bankruptcy. It is best to review the application carefully before applying.
Q: What about the states? Is there a place I can turn to for understanding assistance programs at the state level that we can take advantage of?
A: This is a constantly developing situation, and the best location to review assistance programs will be through your state Governor’s office. Here is a great link to state resources. On this page, scroll down to the State/Territorial Resource Pages header and find the link to your state there.
Q: In what time frame do I have to use the proceeds from my loan that will be forgivable from the time I get the money from the bank? I was told 8 weeks by my banker, but by using the multiplier of average monthly payroll multiplied by 2.5 would calculate to 10 weeks?
A: Your lender is correct for the sake of forgiveness. The 2.5-times payroll amount you reference is just to determine the maximum amount you can borrow. It has nothing to do with the period under which expenses can be paid for forgiveness. The proceeds of the loan need to be spent on expenses during the covered period, which is February 15 to June 30th of this year. However, to maximize forgiveness, you will need to spend enough money after you get the loan on payroll to ensure that your headcount and employee compensation (salary, wages, commission) is the same as whatever prior period you are comparing to. You also must be spending at least 75% of your forgiveness amount for payroll expenses to maximize forgiveness. As a result, you will have to spend more of the loan during the eight weeks after you receive it.
Q: If I only have 8 weeks to use the forgivable funds for payroll and my state isn’t "open" and we are under a “stay at home” order, how can I pay the employees when I can't bring them into work?
A: This is a trickier question. You are ostensibly supposed to put employees back to work with these funds, but if they cannot work remotely that raises concern about how to spend the money to maximize forgiveness. You should segregate the loan funds that you receive and track very carefully how it is spent so you can get the most forgiveness you can. If you employ fewer people, you can always just pay back the money that you don’t spend. However, if you use for something other than payroll, you will not have that opportunity, of course.
Q: Will our state allow our business to remain open if they decide to shut down all non-essential business?
A: This, frankly, is a tough question to answer. Most states are basing their decision on guidelines from the U.S. Cybersecurity and Infrastructure Security Agency (CISA). Within the CISA guidelines, they allow for individual jurisdictions (states, for example) to add or subtract essential workforce categories based on their own requirements and discretion. So, this leaves the question to each individual state. While these guidelines are being updated regularly, the most recent version provides an advisory list of “Essential Critical Infrastructure Workforce,” under the Transportation and Logistics section, for:
MRAA contacted several states – those who have not specifically outlined boat dealers, boat repair shops, or marinas on their list of “essential” businesses – to gain clarity on this subject. MRAA is not providing advice or interpretation of these guidelines, but rather MRAA recommends you contact your state agency in charge of these exemptions to gain the clarity you need to operate your business.
In the meantime, MRAA is also working with the Association of Marina Industries, National Marine Manufacturers Association, and BoatU.S. to gain official clarity on this subject. This letter was sent to CISA Director Christopher Krebs on March 31, requesting an amendment for the guidance to specifically include staff who provide repair and maintenance services at dealerships, boatyards and marinas, as well as those who provide other services at marinas, docks and boatyards.
Q: In which states are marine services still considered essential?
A: MRAA is working this situation daily, and this situation continues to develop. As each state outlines new measures to address this public health emergency, MRAA is taking steps to advocate for repair/maintenance and marina locations to be permitted to remain open when it is safe. To track what each state is doing, please reference this resource from the National Governors Association.
Q: Do federal definitions of “essential” take precedence over State definitions? The federal Cybersecurity and Infrastructure Security Agency (CISA) guidelines suggest marine vessel repair and maintenance should qualify for “essential” status.
A: CISA guidance is meant to be a support tool for state and local officials. It is not binding, or an official executive action by the U.S. Government, so it provides for state-level interpretation, as well as the ability to add or subtract categories from the designation.
Q: What does the non-essential status actually mean? For example, can a skeleton crew stay on? Can we even be in our buildings? Can we keep some guys working in the back, rigging boats? Do they allow us to conduct one-on-one appointments?
A: Each state’s non-essential order is slightly different in what it allows non-essential businesses to do. In general, businesses deemed non-essential should conduct remote work for all work that they can. In several states, service positions and marina staff are permitted to continue work as long as they respect social-distancing techniques. Again, it’s important to gain clarity from your state government on what is permissible.
Q: What are the repercussions of working during the shutdown?
A: Businesses violating their state’s stay-at-home or shelter-in-place order may face criminal consequences. It is always best to respect these orders, and continue business remotely as much as possible.
Q: What can I do to get my dealership or marina considered to be “essential”?
MRAA has language available for members to circulate and send in to their Governor’s offices to request our industry’s service and marina operations be deemed essential. Additionally, states are implementing application forms for businesses to request being considered essential. Using your state’s resources here should give you the clarity you need.
Q: Will getting our non-essential status overturned make dealers ineligible for some assistance?
A: We are finding that there are some state-based loan programs that were established specifically for businesses that were forced to close early on in this crisis. However, to our knowledge, the federal stimulus programs do not indicate that businesses will lose their eligibility for federal assistance based on their essential/non-essential designation. For all state assistance programs, it is best to refer to the latest notice from the Governor’s office to see the specific requirements for your business.
Q: If we are not considered “essential” and need to remain closed, when will we be allowed to reopen?
Each state that has closed “non-essential businesses” has set its own timeline for reopening businesses, ranging from two-weeks to indefinite closures. You should refer to your Governor’s website, accessed here, for more information for your specific case. President Trump floated the idea of ordering states to lift their bans by June 1, but no order has officially taken place.
Q: What about boating, in general? Can people go boating if they want to?
A: In most states, boating is still permitted as long as proper social distancing techniques are used. Some states have closed all non-essential activities with threats of fines or temporary imprisonment. It is best to refer to the latest actions taken by your Governor’s office to determine what activities are still permitted for your location. A resource outlining all actions taken by each state can be found here.
With this resource, MRAA does not intend to provide advice or specific legal guidance for these issues. We've done our best to interpret and provide our analysis of the stimulus packages and the CISA guidance on "essential" services. Please discuss your specific needs with your respective state offices, your legal counsel and/or your banker for the most appropriate information.