COVID-19 has been tough on everybody and especially on those who are keeping the supply chain moving. Truckers across the nation who find themselves in a tight spot financially will be glad to know there’s help.
Thanks to the CARES Act, independent contractors, as well as small and mid-size carriers, can receive financial aid. If you’d like to find out more about what type of financial assistance you can get as a trucker, continue reading below.
What’s the CARES Act?
The Coronavirus Aid and Economic Security (CARES) Act was signed into law on March 27, 2020. It’s by far the most extensive economic recovery package ever passed by the American congress.
The CARES Act provides independent contractors and employers with federal loan and financial assistance options during the pandemic.
What Type Of Loans Can I Receive?
At the moment, there are three main types of federal loan programs made for independent contractors and small to midsize carriers:
- Paycheck Protection Program
- Economic Injury Disaster Loans
- Emergency Economic Injury Grant
Paycheck Protection Program
The Paycheck Protection Program (PPP) gives eight weeks of financial aid in 100% federally guaranteed loans for payroll. The loan has a maximum loan amount of $10 million and is capped at a 4% interest rate.
Loan payments from the PPP start 6-months after the loan is taken, and the loan can be retroactive. That means that you can apply for the loan from as far back as February 15, 2020.
In order to qualify for the PPP, you must:
- Have less than 500 employees
- Qualify as a small business (which means having annual average receipts of $30 million per year)
- Have a maximum net worth of $15 million or less
- Have an average net income of $5 or less
What can PPP loans be used for?
- Mortgage interest payments
- Insurance premiums and healthcare benefits of paid family, medical, or sick leave
- Employee salaries and commissions (payroll)
- Rent and utilities
- Debt and interest obligations from before the loan period
Do I need to pay back my PPP Loan?
To get complete loan forgiveness, you must spend 60% of the loan on payroll costs. However, the other 40% still needs to be used on qualifying expenses.
On top of that, you may not receive total forgiveness if you reduce the number of employees or cut salaries.
Economic Injury Disaster Loan
If your trucking business has received economic harm from COVID-19, you may be able to get an Economic Injury Disaster Loan (EIDL).
EIDL offers up to $2 million that can be used on payroll, fixed debts, accounts payable, or anything else that couldn’t be paid because of the COVID crisis.
Emergency Economic Injury Grant
If you’re applying for a COVID-19 disaster loan, you can get quick access to cash with the Emergency Economic Injury Grant (EEJG).
The EEJG is an immediate $10,000 advance given within three days of applying for the EIDL. The advance doesn’t need to be repaid so long as it’s used under specific circumstances.
Where Can I Apply?
If any of these loans sound like they fit your trucking business, then you can apply online. For the PPP loan, you can apply at the US Small Business Administration (SBA) here.
The SBA also has a form for the EIDL and EEJG here. You can also get some tax credits for your trucking business from the IRS here.
Don’t hesitate—if you’re an independent contractor or small to midsize carrier, you can get help from the government today.
