Most owner-operators and small fleets will qualify for a new, simpler loan forgiveness application for Paycheck Protection Program participants, meaning a virtual guarantee of turning their loan into a grant.
The simplified form, announced Oct. 8, applies to those with loans of $50,000 or less, said the U.S. Small Business Administration, which administered the program through banks that made the loans. SBA has posted instructions for the one-page form.
Kevin Kocmich, with application assistance from ATBS, borrowed close to $13,000 through the PPP to maintain his oversize freight operation. He made regular transfers from a business account to a personal account as payroll, as advised by ATBS, to help ensure he would meet PPP requirements. Kocmich, leased to Diamond Transportation System, was named 2019 Owner-Operator of the Year.The program was set up so that recipients who comply with certain criteria would be eligible to have the loan forgiven. Others would have to repay the loan at a very low interest rate. The new form asks for borrowers to confirm a list of criteria regarding use of the funds.
The original PPP application was burdensome enough, and the original forgiveness application “is longer and more complicated than the original application,” said Todd Amen, president of ATBS, the nation’s largest owner-operator financial services provider.
Amen said most loans ATBS has assisted with were between $8,000 and $12,000, covering leased operators and those with operating authority. The full range would fall between $2,000 and $20,000.
ATBS helped about 10% of its 20,000 clients apply for PPP loans. Because they met the eligibility requirements, it’s assumed they all received loans, Amen said. They usually received funds within a day or two.
Amen said last week, prior to the SBA announcement, it had assisted only 45 clients with forgiveness applications, largely because of the form’s complexity as well as talk of Congress setting a threshold under which all PPP loans would be automatically forgiven. That factor was assumed to be part of the next coronavirus relief bill, which continues to be stalled amid partisan disagreements.
Many banks had been temporarily refusing to accept the original forgiveness application because of lingering questions about it, as well as the tedious demands required to process the original forgiveness form, Amen said. SBA said it and the U.S. Treasury Dept. also have eased the burden on PPP lenders, allowing them to process forgiveness applications more swiftly.
