OOIDA: Truckers need access to SBA assistance
The nation can’t afford to let small-business trucking companies fail during the COVID-19 pandemic, the Owner-Operator Independent Drivers Association told congressional leaders in a letter sent on Tuesday, April 14.
OOIDA’s letter informed lawmakers that the pandemic has led to a major downturn for many small-business truckers and that many of the Association’s members have reported difficulties obtaining assistance from the Small Business Administration programs.
“While news reports may give the impression that business for truckers is booming, the underlying data and feedback from our members paint a much different picture,” OOIDA wrote in the letter signed by President and CEO Todd Spencer. “Outside of an initial spike in demand for delivering groceries and other essentials, most truckers transporting in other segments of the economy have seen a significant drop in business. And as Americans realize, there is plenty of food in our supply chain and panic-buying subsides, we are seeing rates drop across the industry.”
OOIDA said small-business truckers will need help in order to stay in business throughout the crisis.
“To weather this economic downturn, small-business truckers must have access to assistance that Congress promised through the CARES Act with the Paycheck Protection Program and Emergency Economic Injury Disaster Loan program,” Spencer wrote. “Unfortunately, our members are experiencing significant difficulties in securing this assistance and encountering a chasm between what was touted when this legislation was enacted and what they are actually receiving.”
Paycheck Protection Program
The Paycheck Protection Program is touted to provide small businesses and independent contractors loans to keep paying their workers through the emergency period.
“While this guidance appears straightforward, our members’ experience has shown this is not the case,” Spencer wrote. “Some of our members who have attempted to apply are being told by lenders that they are not accepting applications until they receive additional guidance from SBA. We also have concerns that lenders may overlook applications for these smaller loans, because there isn’t much financial incentive to process them.”
OOIDA said SBA’s and Treasury’s guidance for the program has been vague and, at times, “contradictory.”
“If Congress wants to make Paycheck Protection Program loans useful to America’s small-business truckers, it must make sure that clear guidance is available for all types of businesses that are applying and that the program takes into account the diversity of business models throughout the trucking industry.”
Emergency Economic Injury Disaster Loan
OOIDA members also are reporting negative experiences involving the Emergency Economic Injury Disaster Loan program.
“After passage of CARES, it seemed that applicants would be getting a $10,000 advance within three days of their application,” Spencer wrote. “We know that this will not be the case. Some of our members are beginning to hear back about their applications three weeks after applying and have learned that they will be getting only $1,000 per employee. Even worse, it appears independent contractors and sole proprietors with no employees will not receive any advance. This is all the more frustrating since the CARES Act explicitly made these businesses eligible to apply for and receive EIDL advances and loans.”
OOIDA asked lawmakers to consider the needs of small-business truckers as additional funding bills are considered.
“There must be a strong trucking industry if our nation’s economy is to quickly and strongly rebound from this emergency,” Spencer wrote. “Small business truckers make up 96% of our motor carriers, and many of them risk bankruptcy in the current situation. If these businesses are allowed to fail, there will certainly be delays and increased costs across the economy when restarting from this crisis. It is therefore critical that they have access to this assistance.”
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