The Warranty Informer

Warranty Administrator American Guardian Receives Large Paycheck Protection Program Loan

$2 million to $5 million PPP loan is among the largest for warranty administrators

Posted by Tony Russell

July 15, 2020

Warranty Informer

Suburban Chicago-based warranty provider American Guardian Warranty Services, Inc. was the recipient of a large, government-backed Paycheck Protection Program (PPP) loan according to a database provided by the U.S. Treasury Department and the Small Business Association (SBA). The loans, provided by banks in conjunction with the Small Business Association are part of the U.S. Government's financial response to the global COVID-19 pandemic.

The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll, and the SBA will forgive loans if all employee retention criteria are met, and the funds are used for eligible expenses.

Second-Tier of PPP Loans

American Guardian's loan is in the second-tier of loans in terms of total dollars lent, ranging from $2 million to $5 million and was approved on April 20th, 2020. The warranty administrator is located in Warrenville, Illinois, and their loan was funded through JPMorgan Chase Bank. An exact dollar amount of the loan is not provided in the SBA's database.

The PPP loan received by American Guardian is not the largest discovered in the automotive extended warranty/vehicle service contract business — that crown goes to CarShield parent NRRM, LLC, based in Saint Peters, MO, which received a loan of between $5 million and $10 million in PPP loans from Busey Bank according to the SBA's database.

The Paycheck Protection Program

The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll, and the SBA will forgive loans if all employee retention criteria are met, and the funds are used for eligible expenses.

According to the Treasury Department, all loans over $2 million are subject to audit. "A small business or non-profit organization that is listed in the publicly released data has been approved for a PPP loan by a delegated lender. However, the lender’s approval does not reflect a determination by SBA that the borrower is eligible for a PPP loan or entitled to loan forgiveness. All PPP loans are subject to SBA review and all loans over $2 million will automatically be reviewed. The fact that a borrower is listed in the data as having a PPP loan does not mean that SBA has determined that the borrower complied with program rules or is eligible to receive a PPP loan and loan forgiveness. Further, a small business’s receipt of a PPP loan should not be interpreted as an endorsement of the small business’ business activity or business model."

The Paycheck Protection Program provided up to $659 billion in financial support to banks to make low-interest loans to companies and non-profits in response to the coronavirus pandemic.

About American Guardian Warranty Services

According to their website, "Headquartered just outside of Chicago, Illinois, AGWS is an innovative provider of administration services for Agents and Dealers offering vehicle service contracts, limited warranties, and a variety of environmental and aftermarket products across the United States. Since its inception in 1998, the goals of AGWS are to offer superior claim processing, exceptional customer service, and unrivaled profitability options. Products are insured by “A” or “A-” (Excellent) rated carriers. AGWS is part of the American Guardian Group of Companies and enjoys an A+ rating with the Better Business Bureau."

Read more at U.S. Department of Treasury

Source: https://home.treasury.gov

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