Independent Contractor and Self-Employed Drivers Now Eligible to Apply for the PPP Loans!
Beginning Friday, April 10th, for-hire vehicle and taxi drivers who are self-employed or work as independent contractors became eligible to take part in the federal government’s small businesses relief program. The Paycheck Protection Program (PPP) offers emergency, low-interest loans to pay up to 8 weeks of wages, commissions, income, or net earnings from self-employment or similar compensation. For drivers, the PPP loan funds can also be used to pay interest on mortgages, rent, and utilities.
If the funds are used for these purposes—and at least 75% goes towards income—then the loan will be forgiven!
For any portion of the PPP loan that is not forgiven, the interest rate on any unforgiven amount is 1%, and the term is 2 years. The PPP loans require no collateral, no guarantees, or loan fees! The amount of the driver’s loan will be based on actual prior earnings. Drivers will be required to submit documentation to establish eligibility, including payroll tax filings reported to the IRS, Forms 1099-MISC, and/or income and expenses from the sole proprietorship.
We have prepared a PPP Loan Checklist and Worksheet/Calculator, which is available here.
In addition, we have a Resource Guide with Frequently Asked Questions for the PPP Loans that is available here.
The PPP loan application is available here. The loans are available through private lenders, including SBA-approved lenders, federally insured depository institution, federally insured credit union, and any Farm Credit institution.
Drivers should first check with the bank or credit union where they do business since many lending institutions are only accepting PPP loan applications from existing customers.
If your transportation company’s independent contractor drivers need any assistance in applying, including recommendations to lenders, please advise them to contact the COVID-19 Transportation Law Hotline, at 212-237-1106, or email Kim Ramkishun kramkishun@windelsmarx.com Our Transportation Practice Group staff will continue to provide free assistance to help the industry in its time of need.