Coming off the high of winning 2019 Owner Operator of the Year by Truckload Carriers Association, Kevin Kocmich faced hard times much like the rest of the trucking industry in 2020. Kocmich borrowed enough money from the Paycheck Protection Program to keep his oversize freight operation afloat.
While business is on the upswing in the trucking industry now, times are still hard for some owner operators. Large companies are able to bounce back much more easily than a one-man show.
On March 11, the American Rescue Plan Act of 2021 added $7.5 billion to the PPP. Any business owner, including owner operators, who was financially impacted by the global pandemic can apply for a PPP loan until May 31, 2021.
Even when leased to a larger fleet, these drivers are often still responsible for most (or all) business expenses. “We’ve never overspent. The truck comes first,” said Komich.
Owner operators paying themselves often comes last as a result of keeping the truck on the road. This also applies to small fleets. Some 3,140 fleets shut down in 2020, a 185% increase from the previous year.
Because of this, a key component of having these loans forgiven is making regular transfers from a business account to a personal account for payroll. Lenders provide guidance for best practices for approval, but this is a key component across the board.
This program is newly simplified in the interest of these loans actually being approved by lenders and forgiven once requirements are met. The Small Business Administration (SBA) and the U.S. Treasury Dept. eased the burden on PPP lenders, allowing them to process forgiveness applications more swiftly.
Utilize the help of a business services provider and find a local lender that’s familiar with you and your business. Here is a 5-step list to secure a PPP loan.