What is the Paycheck Protection Program?

And How Can it Help Truckers?

By Bill Hood – March 29, 2020

On March 27, 2020, President Trump signed the $2 Trillion Coronaviris Aid, Relief, and Economic Security (CARES) Act. In this bill is over $350-billion program intended to help American small businesses with cash flow assistance with federally guaranteed loans that can turn into grants if the business meets basic conditions after the 8-weeks.

You can read the full bill here.

We are going to explore the bill so that trucking companies can have a better understanding of how they can help support their business over the next 2-months.


  • There is no cost to apply.
  • The money is meant to help with retaining workers, cover payroll, and cover mortgage interest/rent/utility bills.
  • Expenses are covered starting on February 15 and goes through June 30, 2020.
  • The loan can be forgiven. It will turn into a non-taxable grant.

How can a trucking company qualify?

The loan is going to be administrated by the SBA through lending institutions that are already handling SBA loans. A trucking company that is considered a small businesses can qualify for this loan. If you are a sole proprietorship, independent contractors, and self-employed individuals can all qualify.

Sole proprietorships will need to submit schedules from their tax return filed (or to be filed) showing income and expenses from the sole proprietorship.

Independent contractors will need to submit Form 1099-MISC.

Self-employed individuals will need to submit payroll tax filings reported to the Internal Revenue Service.

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What can a trucking company use the funds for?

You must acknowledge that the funds will be used to retain workers and maintain payroll or make mortgage payments, lease payments, and utility payments. Funds you use for other purposes will not be eligible for forgiveness.

The funds can be used for:

  • Payroll and commission payments
  • Group health care benefits/insurance premiums;
  • Mortgage, rent, and lease payments
  • Utilities
  • Interest on any other debt obligations that were incurred before the covered period.

How much funding can a trucking company receive?

The SBA will ask you to provide documentation on your business’s payroll, mortgage, rent, and utility payments over the previous 12-month period. They will calculate the monthly average cost of those expenses. The maximum amount they can offer is 2.5 times that monthly average cost, but no more than $10 million.

If your business did not exist before June 30, 2019, the SBA will look at your costs in January and February 2020.

Note that if you receive a loan under the Paycheck Protection Program, you may no longer be eligible for an EIDL SBA loan for the same purpose of covering payroll

How does a trucking company get the debt forgiven?

In the 8 weeks following your loan signing date, all expenses related to the following can be forgiven:

  • Payroll—salary, wage, vacation, parental, family, medical, or sick leave, health benefits
  • Mortgage interest—as long as the mortgage was signed before February 15, 2020
  • Rent—as long as the lease agreement was in effect before February 15, 2020
  • Utilities—as long as service began before February 15, 2020

When submitting your application for loan forgiveness, you must provide the following documentation (no exceptions):

  • (1) documentation verifying the number of full-time equivalent employees on payroll and pay rates for the periods described in subsection (d), including:
  • (A) payroll tax filings reported to the IRS

  • State income, payroll, and unemployment insurance filings

  • (2) documentation to prove your mortgage, lease, or utility payments
  • cancelled checks

  • payment receipts

  • account statements

  • (3) a certification from a representative of the eligible recipient authorized to make such certifications that:
  • (A) the documentation presented is true and correct; and

  • (B) the amount for which forgiveness is requested was used to retain employees, make interest payments on a covered mortgage obligation, make payments on a covered rent obligation, or make covered utility payments; and

  • (4) any other documentation the Administrator determines necessary.

The lender must make a decision within 60 days of your forgiveness application submission.

What are the conditions trucking company to have the loan forgiven?

The purpose of the Paycheck Protection Program is to, well, protect paychecks. You must commit to maintaining an average monthly number of full-time equivalent employees equal or above the average monthly number of full-time equivalent employees during the previous 1-year period.

The amount that can be forgiven will be reduced…

  • In proportion to any reduction in the number of employees retained.
  • If any wages were reduced by more than 25%.

If you rehire employees that were previously laid off at the beginning of the period, or restore any decreases in wage or salary that were made at the beginning of the period, you will not be penalized for having a reduction in employees or wages, as long as you do this by June 30, 2020.

Note: These guidelines are based on the official 880-page bill. The SBA has been given 30 days to issue official guidance regarding loan forgiveness. We’ll share updates as soon as we learn of them.