Small Business Loans for Truckers
On Friday April 3rd, the Small Business Administration (SBA) began taking loan applications from small businesses, to help them stay in business during the Coronavirus crisis.
Here are the basics on how it works.
The amount a small business can borrow is based on 2.5 times the average monthly payroll costs from January through December 2019.
For example, if your trucking company (or you as an independent contractor) had an average monthly payroll costs of $10,000 in 2019, the you would be able to borrow $25,000 ($10,000 X 2.5 = $25,000), at the low interest rate of 0.5%. Note also that you will not have to make a payment on the loan for at least 6 months.
Even better is that whatever you spend on payroll cost in the 8 weeks after you borrow the money, is forgiven. For example, you borrow $25,000, then over the next 8 weeks you have a total payroll costs of $20,000. The $20,000 will be forgiven from your loan and you will only owe back $5,000, again at only 0.5% interest
Below is from the SBA.gov website:
Who Can Apply?
This program is for any small business with less than 500 employees (including sole proprietorship's, independent contractors and self-employed persons), private non-profit organization or 501(c)(19) veterans organizations affected by coronavirus/COVID-19.
To find out more details, contact your bank and ask them if they are participating in the SBA Paycheck Protection Program. If your bank does not handle SBS loans, here is a link where you can find a bank that does.
You do not have to be a customer of the bank that handles your SBA loan.
It is our understanding that the government is doing this to help keep people employed and to keep small businesses running during this crisis.
Source: American Association of owner operators