How Transportation Companies Can Apply for Emergency Relief: COVID-19 Transportation Update - Saturday, March 28, 2020
Transportation Companies Can Apply for Economic Injury Disaster Loans (EIDLs) & Emergency EIDL Grants as part of The CARES Act!
As a follow-up to our reporting on the assistance available to transportation companies, the CARES Act expands eligibility for the Economic Injury Disaster Loans (EIDLs) administered by the Small Business Administration (SBA). The EIDLs had previously only been open to small businesses affected by COVID-19. Now, under the CARES Act, EIDLs are available to any business with not more than 500 employees, operating under a sole proprietorship or as an independent contractor, tribal businesses, cooperatives and ESOPs with fewer than 500 employees, all non-profit organizations, and individuals operating as sole proprietors or independent contractors.
Within three days of submitting an EIDL application, applicants may request a cash advance of up to $10,000, subject to verification that the entity is eligible for an EIDL. The advance does not have to be repaid if used for maintaining payroll costs, paid leave, increased costs due to supply chain disruption, mortgage or lease payments, or repaying obligations that cannot be met due to revenue losses.
Small businesses may receive an EIDL and a loan under the Paycheck Protection Program (PPP) as long as the EIDL is not being used to pay for the same expenses as the PPP loan. EIDLs may be refinanced into a Paycheck Protection Program loan.
EIDL Loans are processed directly through the SBA.
Key Provisions of EIDLs under the CARES Act:
- Loans of up to $2 million at 3.75 % interest, plus principal and interest deferment for up to 4 years, and a maximum term of 30 years.
- SBA approval based solely on an applicant’s credit score.
- No personal guarantee required for EIDLs under $200,000; loans over $200,000 must be guaranteed by any owner having a 20% or greater interest in the applicant.
- $10,000 emergency cash advance within three days, which may be forgiven if used for certain expenses.
- May obtain an EIDL and a PPP loan if the funds are not used for the same expenses.
- EIDLs may be refinanced into a PPP loan.
Our law firm has already assisted many clients in SBS grants, and in getting ready to apply for CARES Act relief. We are fielding questions for free in an effort to help our beleaguered industry clients and friends, so feel free to reach out to us for help. Please contact Matt Daus at firstname.lastname@example.org or (212) 237-1106.