The National Marine Manufacturers Association said the Coronavirus Aid, Relief and Economic Security Act provides some wins, which will help marine businesses through this tough economic time.
NATIONWIDE—Businesses across the country – the boating industry included – are navigating the tough economic challenges the COVID-19 pandemic has brought.
Four federal bills aimed at providing economic relief from the Coronavirus have been signed into the law, including the Coronavirus Aid, Relief and Economic Security (CARES) Act. The National Marine Manufacturers Association (NMMA) recently held a webinar detailing how the stimulus bill will help marine businesses. NMMA has been lobbying Congress to provide financial certainty for businesses, tariff relief and continued access to public waters in the stimulus bills.
During the webinar, NMMA Senior Vice President of Legal and Government Affairs Nicole Vasilaros explained the bill provides $2.2 trillion in assistance for small businesses, individuals, corporations, public health, state and local governments and education. She highlighted what she called CARES Act wins for the boating industry, which include $350 billion in loans for small businesses, delayed payment of social security payroll taxes, temporary full funding for state short-term compensation program, a new lending program for medium-sized businesses and a grant program to educate and advise businesses to utilize new programs to assist with recovery.
The Payroll Protection Program has become one of the most popular loans to come out of the package. The PPP was meant for small businesses – businesses with fewer than 500 employees and boat manufacturers with up to 1,000 employees – and offers loans of 2.5 times the business’s average monthly payroll costs, essentially eight weeks of payroll. Vasilaros said during the webinar if employees are kept on payroll for the entire eight weeks, the loan will be forgiven but the employer will still pay the 1 percent interest on the loan.
“The purpose is to keep people on your payroll, give you as an employer a break, and basically have the government pay for them,” Vasilaros said.
AP reported the Small Business Association (SBA) announced after 13 days of the application being open, they issued 1.66 million loans from 4,975 lenders totaling $350 billion, exhausting PPP funds. More than 4 million businesses applied.
Concerns have been raised loans were approved for large, public companies worth millions. Lawsuits have also been filed against three banks accusing the lenders of prioritizing businesses seeking larger loan amounts rather than processing the applications on a first come first serve basis.
On April 21, Congress and President Trump reached a deal on $484 billion in new funding to combat the COVID-19 crisis, including an additional $310 billion for the PPP program.
Barrett Canfield, President of South Coast Yachts San Diego and Newport Beach, said they applied for everything available, including the PPP and other loans through the SBA.
“We’ve had about ten years of steady growth, which all felt like it stopped a few weeks ago,” Canfield said in an email.
The company has had to furlough some service and administration employees, with the intention of reinstating their positions. Canfield said he is hopeful for positive responses from the loan applications to clear up some of the unknowns.
“You have sales and service teams that you care about and many existing customers to continue to serve,” Canfield said. “You don’t want to let any of them down. This is a time when true character is exposed and also tested.”
The lockdown has forced South Coast Yachts and many other boat dealers to close their physical offices but many sales members are still working from home and other operations are still ongoing. Canfield said inquires are light, but said he’s finding people sheltering at home are using the extra time to seek information they are passionate about and people have still been contacting them for details, pricing and walk-through videos.
“I expect that all this time surfing YouTube boating videos at home will create a pent up demand to get out on the water,” Canfield said. “That is the first place I’ll go when the lockdown is lifted. I don’t think I’ll be the only one out there!”
Canfield said he believes the affect on the market is temporary and felt the only possible lingering impact will be the effect on consumer confidence – an economic indicator measuring the degree of optimism that consumers feel about the overall state of the economy and their personal financial situation.
A recent survey of 120 marine businesses across the U.S. produced by the Marine Retailers Association of the Americas in partnership with Soundings Trade Only and Baird Research, found 42 percent of the 120 respondents were able to conduct most sales activities, 50 percent able to deliver boats, 68 percent able to take orders, and 47 percent able to receive products from original equipment manufacturers.
Nearly a third said they could withstand a shutdown that lasted more than three months, and 44 percent said they could last between one and two months. Around a quarter of the dealers said they could last less than a month, the report said.
To access CARES Act resources from the NMMA visit nmma.org/press/article/23192. The Yacht Brokers Association of America also has CARES Act resources on their website at seven12management.com/resources_info.