How Does The Corona Virus Stimulus Bill Benefit The Trucking Industry?
As the invisible enemy hits the pause button on the economy of the United States, President Donald Trump throws a float at the drowning businesses in an attempt to keep them afloat. For the first time in the history of America, President Donald Trump ratified a $2 Trillion Corona virus stimulus bill, which is said be the largest sanction so far, to sustain heavy losses the novel Corona virus continues to deluge the country with.
The stimulus bill however, raked a plenty of questions stirring up ample confusion amid individuals as well as businessmen. Before we get to the in depths of the opacity brought about by the bill, let us take a look at what is included in the stimulus bill on the whole.
“The government is doing its best to quench the impact of COVID-19 on its people.” says Cam Smith, VP of Matrack Inc.
The Corona virus stimulus bill entails;
- Direct stimulus payments – Adults eligible for $1200, married couples $2400 and $500 for each child below the age of 17. These are supposed to be direct payments for individuals making up to $75,000 annually
- Hospitals, health care providers and health care systems can use more than $130 billion for pandemic related medical expenses
- Expanded unemployment coverage that includes temporarily laid off employees, gig workers, freelancers, independent contractors, self-employed workers, etc. the bill states that the aforementioned are eligible for $600 per week for a period of four months, hereby
- A $367 billion grant and loan for small businesses
- Airlines to receive cash grants of $25 billion, $4 billion for air cargo carriers and $3 billion for airline contractors (example: caterers, etc.) for payroll back up
- Corporate America to receive $500 billion fund for loans, these loans will be supervised by an inspector general and a congressional panel. Documents for every loan will be made public
- $150 billion dollars granted to state and local governments
To learn the benefits the bill bears for individuals and families you could click here
Apart from individual, family, hospitals, retirement and unemployment benefits, the stimulus bill has sanctioned a huge amount to small businesses and the corporate sector. Let us now understand what the stimulus bill contains for small scale industries like fleet companies and big businesses in the trucking industry.
What does the bill mean for Truck Drivers?
A truck driver would come under the independent contractor category. This means a truck driver is eligible for the unemployment benefits included in the stimulus bill. Therefore truck drivers will be eligible for a weekly stipend in federal support for about four months. Employees for companies like Uber, Lyft and Instacart can benefit from the unemployment plan too.
Small Business Loan Grant for Fleet Companies
President Donald Trump unanimously granted $349 billion to the small business sector impacted by COVID-19 in the United States.
Any business employing less than five hundred employees is eligible for a loan from this allotted amount. This also includes fleet companies, veteran organization, tribal businesses, non-profit organizations, restaurants, hotels, independent franchises, sole proprietors, etc.
The global pandemic has indicated towards unfortunate layoffs and losses, especially in the small business sector. Therefore the intention of the loan is to give small businesses monetary assistance to pay their workers for a minimum period of 8 weeks. It gives fleet owners a chance to re employ workers that have been laid off. A fleet owner can use the loan amount can also be used to pay rent, benefits, utilities, interest payments, etc.
Fleet companies are eligible for ‘Small Business Interruption’ loan of up to 2.5 times their average monthly payroll. However, businesses with employee strength of less than 500 will be eligible for not more than a $10 million loan.
The stimulus bill has also authorized an additional $10 billion in emergency grants for small businesses, agricultural co-operations, employee owned organizations and more. This loan can be converted into advances on forgivable loans relevant to the aforementioned. Small businesses like fleet companies can liberally use the loan amount for business purposes. However, if they cannot repay the amount they need to keep in mind the following points;
- A loan taken to pay employees for eight weeks and used within the stipulated time of 2 months is forgivable. However, only the principal amount will be forgiven.
- An employee cannot be paid more than $10,000 within two months.
- If the salaries of the employees cross $100,000, a loan taken for that high an amount would not be forgiven.
- The loan amount would be granted by taking into consideration employee salary of a given firm between January 1st 2020 and February 29th 2020 respectively.
- Each loan would be granted at an interest rate of 4 percent.
Fleet companies could also use lending programs and tax credits set up in the Coronavirus Aid, Relief, and Economic Security (CARES) Act. This Act permits states to issue special permits for overweight loads of emergency supplies until the emergency declaration is valid. Fleet owners can apply for PPP (Paycheck Protection Plan) loans from 10th April to 30th June 2020.
Loans for the Trucking Industry
The Coronavirus stimulus bill states that industries and airlines will get a combined allocation of $500 billion to assuage the impact of COVID-19, thus rendering economic stabilization. However, the loans granted to businesses calls for their relinquishment of certain control to the federal government as trade for the financial rescue. Given below is what the stimulus bill holds for the large carriers in the trucking sector;
- The bill grants tax credits to trucking companies that did not lay off employees despite a significant revenue loss.
- Trucking companies that use this loan benefit are restricted from granting their employees an increment, temporarily.
- After opting for this loan, companies in the trucking industry or otherwise, will not be permitted to buy back stocks for an entire year after the pandemic impact settles.
- The members of Congress and heads of federal agencies, business controlled by the vice president or the president himself, are ineligible for a loan from the $500 billion sanction.
- Unlike Small Business Interruption loans, these loans have to be repaid as they are not forgivable. However, these loans will be granted at a 1 percent interest rate.
- Trucking companies would only need to pay the 1 percent interest amount for a period of 6 months after the loan is granted.
Fleet owners could fill the application for loan form here
It is important to note that all loans will be under strict supervision. The stimulus bill has loosened rules that normally govern SBA loans. The loans do not demand anything to be kept collateral or any personal guarantee.