Expanding a $350 billion loan program that recently began providing emergency cash for small companies in danger of laying off employees because of COVID-19 may soon receive another $250 billion.
U.S. Treasury Secretary Steven Mnuchin, in a tweet on Tuesday, said securing the additional funding for the Paycheck Protection Program (PPP) — “to make sure small businesses get the money they need!” — has the support of President Donald Trump and a bipartisan group of congressional leaders. The program is part of the CARES Act relief bill that Trump signed into law March 27.
“Even as the CARES Act continues to come online, one such need is already clear: The small-business Paycheck Protection Program needs more funding,” said Senate Majority Leader Mitch McConnell in a statement on Tuesday.
“In just a few days, this program has become overwhelmingly popular. Thanks to the hard work of small businesses and lenders, billions of dollars have already landed and tens of billions more are already in the pipeline. Jobs are literally being saved as we speak. But it is quickly becoming clear that Congress will need to provide more funding or this crucial program may run dry. That cannot happen. Nearly 10 million Americans filed for unemployment in just the last two weeks. This is already a record-shattering tragedy and every day counts.”
Small and midsize trucking companies with 500 employees or fewer can take advantage of the program, which provides access to eight weeks of cash-flow assistance and liquidity “so they can keep their drivers paid, trucks running, stores restocked and hospitals supplied,” American Trucking Associations President and CEO Chris Spear stated last week.
Scopelitis, a law firm specializing in the trucking sector, said during a webinar shortly after the PPP loans became available that recipients “must certify in good faith that the loan is necessary due to impact on operations related to uncertain economic conditions and the funds will be used to retain workers and maintain payroll,” as well as other ongoing financial obligations like mortgages.
If the employer maintains payroll, the portion of the loans used for covered payroll costs, interest on mortgage obligations, rent, and utilities would be forgiven, according to lawmakers who wrote the legislation, which would help workers remain employed.
Michael Letsch, senior vice president covering transportation and logistics for Bank of America, confirmed in a Tuesday video town hall meeting conducted by the Truckload Carriers Association that his bank alone has received 250,000 applications totaling $30 billion PPP loan requests.
“If you think you’re eligible, if you think you can use the funds, if you think you can seek forgiveness at the end of the period, I would advise you to turn in an application,” Letsch said.
JRayl Transport, an Akron, Ohio-based trucking company that has applied for a PPP loan, plans to use the funds “to keep our employees busy and keep our families fed,” said the company’s chief financial officer, Fred Price. “We’ve been hard at work chasing additional freight.”