Many of the legal experts that have been providing businesses with advice throughout the COVID health crisis have recommended the creation of systems and processes to track efforts to keep employees and customers safe.

Now, under newly revised policies issued by the U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA), its Compliance Safety and Health Officers will begin stepping up in-person inspections of all types of workplaces and enforcement of the COVID-related record-keeping mandates for businesses, particularly those that employ more than 10 people, as detailed in 29 CFR 1904. “In all events, it is important as a matter of worker health and safety, as well as public health, for an employer to examine COVID-19 cases among workers and respond appropriately to protect workers, regardless of whether a case is ultimately determined to be work-related,” wrote Lee Anne Jillings and Patrick J. Kapust, acting directors, in an OSHA Memorandum on May 19, 2020. 

The mandates they will now be enforcing require employers to conduct a “reasonable and good faith inquiry” into cases of coronavirus among their employees to determine whether they may be work-related, and if they are determined to be work-related, to record those cases using OSHA Form 300.

This is one of several regulations related to COVID-19 that U.S. marine dealers should be aware of and ensure they are in compliance with. MRAA addressed some of these legal and regulatory considerations as part of its April 15^th Ask the Expert Webinar, titled Legal Insights to COVID-19 Solutions.

Given the changes that have taken place since then, MRAA will once again feature expertise from MRAA partner Bellavia Blatt PC to help dealers navigate these legal and regulatory issues in an upcoming June webinar, date and time to be announced shortly.

Here we are on the cusp of summer. With Memorial Day weekend in the U.S. and Victoria Day in Canada unofficially kicking off the season, this is typically a busy time of year for dealers.

We hope this is a busy, revenue-generating time for you as well.

But we also know this year is different. The government is asking us to practice social distancing. Consumers are excited to get out on the water, but many are hesitant to interact closely with you and your staff. Your staff is happy to be back at work, but some are reluctant to come back if certain precautions aren’t made.

So what are you doing to stay safe while people across North America are still being infected with COVID-19?

There are a lot of things to think about from customer interactions to washing surfaces and from marina safety to demo rides and sea trials.

I recently spent a great deal of time with MTAs throughout North America, discussing what it is that dealers, marina operators and boatyard owners need to know about running their operations during the pandemic.

What we developed is a 58-page manual, the Guide to Operating Your Boat Business Safely.

Don’t worry, you don’t have to read the full 58 pages of the guide. We know you’re busy. Find the articles that are pertinent to you. We have a section on Your Business, another on Your Customers and a third on Your Employees. Plus, 17 pages of the publication are downloads for you to use. Those downloads range from printable guides for your staff, to posters for your customers, to customizable Excel documents that will help you run your business safely.

We combed through what the CDC, Health Canada, W.H.O., OSHA and others have been reporting and assessed how their recommendations affect dealerships, marinas and boatyards, and translated that, so you don’t have to.

We hope you find some great resources in this guide! And if you need any additional, resources or information, let us at the MRAA or those at your local MTA know. We’re glad to help!

If you’re not one of the many marine industry disciples who actually wore their life jacket to work last Friday — affectionately known as Wear Your Life Jacket to Work Day — you should be aware that the week prior to Memorial Day here in the States is always honored as National Safe Boating Week.

Safe Boating Week was designed to bring awareness to the importance of safety on the water, prior to what is normally the kickoff to the summer boating season — Memorial Day weekend. Wear your life jacket. Boat sober. Navigate responsibly. Respect other boaters. And so forth.

With many dealers and marinas reporting that boater activity levels have been at all-time highs throughout the month of May, the boating season is already in full swing, and it is expected that this Memorial Day Weekend could be the busiest holiday weekend ever for boating across the United States.

This year, more than any other year, safe boating takes on a higher level of importance — and not just because of the increased boating activity. Safe Boating week was designed to help mitigate the risks of boating accidents and fatalities, two key metrics that our industry has been successful at improving over time. With greater numbers of boaters on the waterways, a focus on safe boating will be more important than ever.

I would argue, however, that our industry’s focus shouldn’t be limited to reducing the risk of just accidents and fatalities. It should also be focused on limiting the risk that our industry faces with regard to the health concerns in our society today.

Download this and the other resources below to communicate with customers on how to boat
safely in today’s social-distancing-focused environment and help mitigate risks to boating.

You may recall that Miami-Dade County in Florida closed down its boat ramps and forbid boaters from using popular boating destinations due to the appearance that boaters were not practicing safe social distancing measures. With increased boating-related website traffic, with an increase in boat loan applications, and positive reports from our dealers, it’s clear that a whole lot of new people and seasoned boaters alike will be taking to our waterways this weekend and enjoying our great outdoors. What are you doing to keep them safe and protect both boaters and boating for the days, weeks and months to come?

Without a good reminder from our industry and our many businesses and their employees, if boating participation isn’t conducted safely and responsibly, it could damage the reputation of boating and once again cause the closure of ramps and/or waterways. Let’s make sure that we’re communicating, as an industry, all of the ways we should be boating safely.

Here are a few resources you can use to do that:

MRAA: Communicate Safe Boating With Your Customers

MRAA’s Boating Do’s and Do Not’s 

Boat Ramp Do’s and Do Not’s

Discover Boating Article: Tips for Safe Social Distancing

With the memory of the significant toll that the Great Recession had on our industry still somewhat fresh in our minds, I think it’s important to note that this downturn is different in a number of ways.

Between the crash in 2008 and the middle of 2010, nearly 2,000 boat dealerships were forced out of business. Buying programs with volume-focused discounts, coupled with loose inventory management practices put many businesses in a no-win situation when the economy came to a screeching halt.

It’s estimated that as much as 60 percent of the inventory on dealership lots during the Great Recession was more than a year old. And, notably, very little if any of that product had been curtailed, meaning the dealerships hadn’t paid down the value as it aged.

The financial crunch it placed on the dealers also hit the floor plan lenders hard, and all of them, aside from GE Commercial Distribution Finance, vacated the market place, leaving dealers and the industry to fend for themselves. Today, the former GE team operates under the Wells Fargo Commercial Distribution Finance banner, and two other lenders — Northpoint Commercial Finance and TCF Inventory Finance — are supporting manufacturers and dealers through this crisis, and there’s some relatively good news to report, in comparison to the last downturn.

Based on MRAA’s industry conversations, non-current inventory at dealerships in April, sat on average, at around 20 percent of the total inventory in the field. That’s a major shift from the precarious position dealers found themselves in during the Great Recession days. 2019 model year boats made up about 19 percent of that and only 1 percent of the non-current, new inventory in the field was 2018.

What’s more is that today’s inventory has also been curtailed. What that means is that as consumers look for more value and choose to pay less and buy a non-current model, there’s more cash injected into our dealerships.

One of the major concerns with any downturn like we’ve seen with the Great Recession and in today’s environment, is that consumers or dealers will default on their loans, have boats repossessed and then re-sold in the market place in a manner that deteriorates inventory value and further hurts our businesses. If the inventory levels are any indicator on the likelihood of that scenario, and I believe they are, then we should be in much better shape today than we were in 2008, 2009, and 2010.

As a socially-safe activity, boating is growing in demand 

New data from Boats Group showing Boat Trader and YachtWorld marketplace activity soaring in recent weeks prove water lovers have grown tired of “streaming” their way through today’s remote lifestyle. Boaters began to crave this year’s boating season more than ever after the declared global pandemic in March and were quick to turn their attention to browsing for boats and dreaming of better days on the water in April. Similarly, people who were previously on the fence about owning a boat are now showing strong interest as summer concerts, sporting events and travel plans have been canceled. 

In fact, more people are actively looking for boats now than a year ago, and current traffic (+26% YoY) more closely resembles midsummer volume than spring. As water access and marinas across the country are reopening, leads across all regions and classes are increasing. 

A closer look at that demand shows boats under 30 feet are currently receiving the heftiest volume of leads. Pontoon (+149% YoY), ski/ wake (+100% YoY) and freshwater fishing boats (+94% YoY) are generating the most interest. A view regionally shows that the Southwest, Plains and Gulf Coast areas are among the strongest in lead conversion, which, combined with the category data, suggests that river and lake lovers are the first to make boating their go-to social distancing activity.

Given the strong lead growth across the entire U.S. (+76% YoY), it is clear that many people will turn to boating for their social distancing activity. As pent-up demand continues to grow in the coming months, dealers and brokers should focus on nurturing prospects and building their pipeline.

To provide additional support to its industry partners as demand accelerates, Boat Trader and YachtWorld added new features to their marketplaces to help dealers and brokers merchandise their virtual and delivery services to make way for more sales. 

Boating appears to offer people a silver lining to an unprecedented reality. More and more people are eager to get outside, enjoy time with family and friends (at a safe distance) and get on the water. What better way to do that than with a boat?

If you’re a marine dealer based in the United States, you’re likely one of the 90 percent of dealerships that have applied for a Paycheck Protection Program (PPP) loan offered by the U.S. Small Business Administration (SBA).  

The question on many dealers’ minds is: So, what now?

Many of you who have applied and received these funds may be wondering how your business can use them in a way that helps your business stay afloat, and gets as much of the amount forgiven as possible.

That’s no surprise. The SBA had provided limited answers to those questions up until now, but has been promising more guidance would be coming.

Well, today we received some of that promised guidance from the U.S. Treasury Department’s release of some frequently asked questions around the Paycheck Protection Program. You can find the SBA document here.

The PPP is one of several Coronavirus Relief Options offered by the U.S. Small
Business Administration that many marine dealers have applied for and are now
putting to use; however, several questions remain about how to apply for
forgiveness of these loans.

This week, MRAA also received some guidance from Eric Craig of USA Specialty Lending, which is approved by SBA to originate and process PPP loans.

As a longtime friend of MRAA and someone who has spent much of his career in the marine industry, we asked Eric some questions to help dealers navigate these difficult times and PPP loans in particular.

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QUESTION: Eric, you said that there are still a lot of funds available through the PPP, and recommended dealerships that have not yet taken advantage of the program consider it. Can you explain why you recommend that? I know a lot of dealers have concerns about applying for the loans because there have been so many unanswered questions about the program – and specifically about loan forgiveness.  

ANSWER: I’m sure every dealership has been affected by this pandemic. The funds are meant to give temporary relief for specifically these types of small businesses. The ability to have the loan forgiven, should the funds be used appropriately, offers very little downside. If a dealership can apply, and hasn’t already, they should do so soon. The second round of funds are estimated at over $100 Billion, giving qualified businesses and business owners the ability to obtain some relief.

QUESTION: For those dealers who have already applied for the PPP and received their funds, what advice do you have?

ANSWER: First, try to be patient. Lenders, just like dealerships, are awaiting further guidance from the SBA as to what documentation to collect and how the process for forgiveness will be implemented. Second, if you haven’t started already, collect payroll documentation, utility bills, lease payments or mortgage statements and bank statements for the 8-week period following the initial disbursements of funds. More detailed information from the SBA and your lender will follow, but it’s helpful if you start putting some of this together now.

QUESTION: We have heard that you have eight weeks from the date the PPP funds are deposited that it can be forgiven, if you use the funds to pay for approved costs. Is that right? Does that mean you have eight weeks to use any funds you want forgiven or eight weeks to apply for forgiveness for the funds you plan to use for approved costs?

ANSWER: Based on guidance thus far, the funds utilized during the eight weeks following initial disbursement are eligible for forgiveness. Keep in mind, 75% of the funds eligible for forgiveness must be utilized toward payroll costs.

QUESTION: After the eight weeks, you can either return what you didn’t use or any amount that has not been forgiven by the SBA (either because you used the funds on unapproved costs or because you didn’t apply for forgiveness in time) becomes a loan at 1% interest. Do we understand that correctly? Is that the same interest rate no matter what bank you went through?

ANSWER: This is a loan that happens to have the ability to be forgiven. If funds aren’t utilized appropriately or in their entirety, the borrower will have a six-month deferment and then a repayment period of 18 months. The interest rate, no matter the lender, is 1%. The funds can be repaid at any time, in full, if you so choose. However, I would read your loan agreement thoroughly as to the lender’s guidelines on prepayment.

QUESTION: What do you need to do within the eight weeks to get the PPP money forgiven? Do you send in something that shows how you have spent that money? Is that done on a portal or hard copy? Through your bank or directly with SBA?

ANSWER: As previously mentioned, start collecting payroll, rent, mortgage and/or utility documentation. While the documents vary per entity type. I’d like to think every lender will send instructions on what documentations is needed and how to submit. This documentation will go directly to your lender. It is your lender’s responsibility to apply for forgiveness. It seems there will also be a final certification the borrower’s representative must make regarding the documents provided and how the funds were utilized. This might be an SBA form or something your lender may provide. Further guidance has yet to be relayed on this topic.

QUESTION: If I understand correctly, an IRS rule published late last month suggests that companies that use PPP dollars toward their payroll and other covered expenses can’t then deduct those amounts from their taxes. Is that right? I think it’s important dealers understand this and plan for it, as it could potentially offset some of the loan’s benefits.

ANSWER: While this detail is important, I am not a tax advisor and any discussion of tax implications should be had with the dealership’s accountant.

QUESTION: What else should dealers know about participating in this program?

ANSWER: It’s a very simple application process if you already have a commercial banking relationship and they offer the SBA Paycheck Protection Program. There is also a finite window to apply. Once funds run out the program is over. There doesn’t seem to be any more funding going before Congress at this time.

Got more questions? Here are four places to turn:

• How to Apply for Paycheck Protection Program (PPP) loans
  
• Coronavirus Aid, Relief and Economic Security (CARES) Act One-Pager
  
• Webinar from MRAA Benefit Provider Bukaty Companies: How the Paycheck Protection Program Can Help Your Business
  
• Contact Eric Craig