The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) provides financial assistance through a series of emergency loans and grants to large and small businesses to assist them during this difficult economic period. In addition to providing financial support to businesses, the program also provides assistance to independent contractors and self-employed individuals, which includes many of our professional athletes and their agents.
In the sport of professional motorcycle/ATV competition, including Pro Motocross, GNCC and ATVMX, most of our pro athletes and promoters operate as either small business entities (LLC or S-corporations), independent contractors or are self-employed. To help navigate the complicated application process for these funding programs, the Motorcycle Industry Council (MIC) has prepared a summary of resources and contact information. The MIC COVID-19 Economic Assistance Resources summary outlines the various financial assistance programs available to our pro athletes.
Individuals and companies that have been adversely impacted by the crisis are encouraged to explore how these programs may assist them until our sport returns to competition. To summarize:
1. Emergency Economic Injury Disaster Loans (EIDL): Pro athletes and businesses may be eligible for up to $2 million in loans, as well as a $10,000 1-time cash grant. The application process is easy and available online. You will need your SSN or EIN and bank account and routing numbers. You will know if you are approved for the $10,000 grant within 3 days and the money will be directly wired to your account. https://covid19relief.sba.gov/#/
2. Paycheck Protection Program (PPP): If you have employees and continue to pay them during the crisis, you may be eligible for payroll protection. This program pays 2.5 times your monthly payroll costs and is 100% forgivable, so long as you don’t reduce your payroll by more than 25%. Starting April 10th, independent contractors and self-employed individuals (pro athletes) may also apply for loans of up to $100,000 to cover the loss of income and net earnings from self-employment during this time. These loans are forgivable as well.
This program is administered through the Small Business Association (SBA) but you must apply through your local bank. Applications close June 30th and there is a funding cap, so apply now. The 6-digit NAICS Code for independent professional racers is 711219.
3. Tax Credits: Several tax credit programs are available and should be exercised if applicable. You will need to consult with your tax advisor to take advantage of these tax credits:
a. Payroll tax credit
b. Social Security tax deferment
c. Net operating loss 5-year carry back with full offset
d. Increase in business interest expense deductions
e. Immediate recovery of corporate alternative minimum tax credits
f. Immediate write-off for facility improvement costs (i.e., racetrack upgrades?)
We hope this information has been helpful to our professional athletes and promoters. The RLT will continue to provide weekly updates regarding event schedules, postponements and cancellations, along with other updates intended to provide our motorsports community with the most current and accurate information available regarding our competition programs, and encourages everyone to follow local, state and federal rules and recommendations designed to address the impacts of COVID-19.