Federal Grant & Loan Webinar for Transportation Providers: COVID-19 Transportation Update - Tuesday, March 31, 2020
Matt Daus Addresses NLA Members About Loans and Grants Available for Transportation Companies & Drivers
Matt Daus participated in a National Limousine Association webinar providing updates and interpretation on the COVID-19 legislation and its effects on the ground transportation industry. Matt discussed the merits of the Economic Injury Disaster Loans (“EIDL”) and the Paycheck Protection Program (“PPP”) for transportation companies. Providing the most “bang for your buck,” the PPP loans require no guarantees or collateral, and have no fees charged to the borrower. Matt advised that companies that are facing the economic downturn due to the COVID-19 pandemic should consider the PPP loans – which will be handled by banks and credit unions directly. Since the PPP loans are applicable to companies that have 500 employees or less, many transportation companies will qualify. In addition, the PPP loans are available to independent contractors and sole proprietors, including drivers. Under the PPP loan program, if all employees are kept on payroll for eight weeks, then SBA will forgive the portion of the PPP loan used for payroll costs, rent, mortgage interest, and/or utilities during that time. Up to 100 percent of the loan is forgivable. For this reason, PPPs are a good option for businesses with higher payroll who will use the loan to fund payroll costs, rent, mortgage interest, and/or utilities over the eight weeks following the date the PPP is made. Since the PPP loans are aimed at keeping employees on the payroll and for paying identified business expenses, these loans are especially important to transportation companies and drivers facing immense challenges today due to the coronavirus crisis. Perhaps, it is most important to realize that the PPP loans have a loan forgiveness component that can effectively convert the loan into a grant. If the business needs the loan to pay for something else—or to make payments beyond those initial 8 weeks and/or or after June 30, 2020—then the EIDL (or another SBA loan product) may be helpful as well. The EIDL also comes with an immediate Emergency Grant of $10,000 that is available to all eligible applicants within 3 days of applying. This cash advance is not subject to repayment if it is used for maintaining payroll, paid leave, increased costs due to supply chain disruption, mortgage, utility, or lease payments, or repaying obligations that cannot be met due to revenue losses. If the business needs an immediate cash injection for one of those purposes, then the EIDL application is an option for that.
Since the SBA guidance and the PPP loans are expected to be available shortly, transportation companies should assemble payroll records, bank statements and tax returns to be ready to apply ASAP! Watch the full discussion here.
If you have any questions about the federal programs or other assistance programs, please reach out to MATT DAUS at mdaus@windelsmarx.com or (212) 237-1106. To assist the industry at its time of need, our team is providing free advice to industry members!
Alexa, Play the Smart Driving Cars Podcast discussing the Impact of COVID-19 on Ground Transportation!
Yesterday, Matthew Daus was a guest on The Smart Driving Cars Podcast with Princeton's Alain Kornhauser and co-host Fred Fishkin where he discussed the impacts of the coronavirus outbreak on ground transportation and its long-term changes to mobility. The transportation sector has come to a screeching halt in New York City. At the same time, people in the sector are considering the value proposition of automated vehicles (with no risks of human-to-human virus infection), sustainable modes of transportation (walking and biking) and vehicle safety. Listen to the full interview here or watch the full video interview here.
