WILMETTE, Ill. — Multiple business assistance packages have been available during the COVID-19 pandemic, and many motorsports companies have been able to take advantage of them.
The unprecedented shutdown caused by the coronavirus severely impacted most sports and entertainment entities.
The Coronavirus Aid, Relief and Economic Security Act created several programs designed to support companies in different ways.
The Paycheck Protection Program was designed to provide a direct incentive for small businesses to keep their employees on the payroll. The Small Business Administration agreed to forgive the loans if certain retention criteria were met and funds were used for eligible expenses (payroll, rent, etc.).
To qualify for the program, companies had to have fewer than 500 employees and use 75 percent of the funds for payroll.
Companies applied for the loans through participating lenders. The original deadline was late June, but it was extended to early August.
The size of the loan could be up to $10 million with a term rate of two years and a one percent interest rate. Personal guarantees and collateral were required. The loans would be forgivable if certain criteria were met (maintaining head count, rehiring employees and maintaining salary levels).
The PPP was funded with $659 billion and nearly five million businesses were approved for loans.
Recipients from the sports industry made the list of those receiving funds. There were approximately 600 sports organizations that received loans, totaling $665 million and preserving approximately 36,000 jobs.
None of the major leagues — NFL, NBA, NBA and NHL — applied. It is believed that NASCAR Holdings and Penske Corp. did not participate because they may have exceeded the employee size threshold.
Specifically, for motorsports, there were approximately 65 companies approved for $78.5 million in loans, which helped retain approximately 4,000 jobs.
The list included about 20 NASCAR teams, eight IndyCar teams, four IMSA teams and four tracks and sanctioning bodies.
The largest recipients were Richard Childress Racing, Chip Ganassi Racing, Roush Fenway Racing, Roush Yates Engines and Andretti Autosport. Their loans ranged from $2 to $10 million, with each retaining more than 130 employees.
Other entities receiving loans included JR Motorsports, Richard Petty Motorsports, Arrow McLaren SP, Pocono Raceway and World Racing Group.
The goal of the PPP program was to allow companies to keep employees on the payroll.
This was extremely important to motorsports since there was no racing for more than two months. Once teams were given the green flag to resume racing in mid-May, they brought their workforces back to the shops to prepare race cars.
Funding from sponsors probably varied during the shutdown. Depending on the agreements, payments may have been tied to on-track performance, or some may not have had the ability to make team payments and sought relief during the shutdown.
Flexibility remains the key during this continued period of uncertainty. Stakeholders utilized all options and worked together to keep motorsports on the fast track.