Updated, July 6, 2020 – While motor carriers and professional drivers continue to respond to our nation’s needs during the coronavirus (COVID-19) pandemic, financial assistance may be available to many small- and mid-sized carriers and independent contractors, if you act quickly.
The Coronavirus Aid, Relief and Economic Security (CARES) Act offers an opportunity for qualified businesses to help maintain payrolls and to cover eligible business expenses. It creates a new Small Business Administration (SBA) program, the Payroll Protection Program (PPP). It utilizes the existing SBA loan process in coordination with the U.S. Treasury, the Federal Reserve and participating private lenders.
Although up to $660 billion of federally guaranteed loans will underwrite the PPP, remember that the program is open to all small businesses, not just to the trucking industry. If you intend to apply, the deadline is Aug. 8, 2020.
Although some portions of PPP loans are forgivable under approved circumstances, the SBA requires businesses to meet certain qualifications, as well as to certify under penalty of law that the information you submit to qualify for the loan is accurate. If you already have an SBA loan, the PPP prohibits you from using the new funds for the same purposes as your existing SBA loan. Lastly, as with nearly all federal loan programs, expect some inevitable delays before the lender notifies you if you are qualified and, if so, when you actually receive loan proceeds.
To apply, contact your financial institution and see if they are a SBA 7(a) approved lender or intend to participate. Not all lenders do, and others have experienced delays and computer problems from the demand. You can find approved SBA lenders at: https://www.sba.gov/partners/lenders/microloan-program/list-lenders.
As in all financial matters, it is always a good practice to consult with your financial advisor and/or tax attorney before you decide to apply.
This blog was updated on July 6, 2020 to reflect an extension of the original PPP loan application deadline.