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Dealership marketing company AutoWeb acknowledged this week it may have to return the $1.38 million loan it received in April under the U.S. Small Business Administration’s Paycheck Protection Program.
The company advised with its first-quarter earnings this week that the federal government issued new guidance that large companies will have to certify their economic needs to receive the loans, part of the coronavirus relief package. The loans help cover small businesses’ employee payroll costs for eight weeks and can be forgiven.
“Although we believe that we are compliant with the ‘economic uncertainty’ certification we made in connection with our PPP Loan, there can be no assurances given that upon an audit of our loan application, an adverse audit opinion might result that could require us to repay the entire amount of the loan, which could materially and adversely impact our financial performance,” AutoWeb wrote in a regulatory filing Thursday accompanying its quarterly earnings results.
The federal government noted in its guidance that “it is unlikely that a public company with substantial market value and access to capital markets will be able to make the required certification in good faith.”
As a result, AutoNation Inc., the nation’s largest dealership group, returned $77 million in loans it received. Also returning loans were Penske Automotive Group Inc. and Sonic Automotive Inc., both of which declined to disclose the exact amounts they received.
AutoWeb in April disclosed several pay cuts for company executives and board members, including a 30 percent cut for CEO Jared Rowe through June.
“These measures are helping us remain nearly fully staffed,” Rowe said Thursday on a conference call with analysts. He did not reference the Paycheck Protection Program.
“We’ve had a few — very limited — furloughs in the United States and some limited layoffs of our staff abroad.”
On Thursday, AutoWeb reported a $4.1 million net loss in the quarter ended March 31, down from a loss of $5.4 million in the same quarter a year ago. Revenue slid 23 percent to $24.5 million.