Government Grants To Start A Trucking Company - Where To Go And How To Apply (Including Loans for Coronavirus)
Starting any successful business venture takes a lot of effort, time and resources, but some businesses are a lot more capital intensive than others. Trucking companies, for example, have heavy start-up costs that amount to multiple thousands of dollars.
The fees alone for incorporating your business can be as much as a thousand dollars depending on the state you reside in, but then you need to file with the DOT, purchase a truck and trailer and even purchase insurance which many times is more costly than the actual equipment you use to transport goods.
With all of these out of pocket expenses that are required to get your business off the ground, many business owners look for help through government grants to start a trucking company.
The good news is that there are plenty of grants available through different resources, some have very specific eligibility requirements that you have to meet and others are less strict. In the end, getting government grants isn’t the only way you can start your trucking business, you can also apply for loans specifically designated to help new business owners successfully launch their new venture.
SBA 8(a) Business Development Program
The Small Business Administration offers many programs but if you own a business and are someone who is socially or economically disadvantaged then you should head over to this program right away.
There are some stipulations to this program, such as caps to your net worth, assets and income, you also need to have at least 51% of the business owners be socially or economically disadvantaged and you must receive 8(a) certification through the SBA as a small business.
All in all, if you meet these requirements, you can find out more on how to apply by going to the SBA website where you can also find out more information on the mentor program.
Minority Business Grants
If you are part of a minority group in this country and you own your own business, then you may qualify for programs that help you create jobs, build scale and capacity, increase revenue and expand nationally and internationally. The MBDA has business centers located throughout the country so that they can connect you with the capital, contracts and markets that your company needs to grow. Even if you are not able to qualify for any of their capital, you should at least inquire about their strategic business consulting to give you suggestions and ideas on how you can grow.
USDA Rural Business Enterprise Grants
If you own a trucking company in a rural area of the United States then you may qualify for government grants through the US Department of Agriculture. This program specifically targets companies that have less than 50 employees and under $1M gross revenue. To be considered “rural”, you must be located in an area outside the urbanized periphery of any city with a population of $50,000 or more.
There is no cap to the amount of funding you can receive but the fund does give priority to those who ask for less. The great thing about this loan is that it can be used for so many areas of your business including equipment, building renovations, machinery, training and advancement and business counseling, just to name a few.
If you’re a veteran looking for help to get your business off the ground then you’ll likely want to start with the Veterans Business Outreach Center who provides business counseling, mentoring and training. They have 22 locations throughout the country so it’s likely that there is one located within an hour or two drive from you. To find out more about these programs you can head over the SBA’s website.
Alternatives To Grant Money
Government grants for trucking companies can sometimes be difficult to obtain, their guidelines can have a narrow scope and sometimes they have calendar deadlines. As any business owner knows, access to capital is critical to any business looking to get started on the right foot, or to expand regionally or nationally. What other forms of capital can you get access to?
Lines of Credit
Business lines of credit can be extremely useful and oftentimes you can obtain very cheap funding by going this route. You can try applying to several lending institutions on your own, but this makes it tough as you may not be familiar with what their guidelines and qualifications may be. There are some that pull your personal credit report, getting that done too many times within a short window of time can actually work against you.
This is why it can be better to work with an agency that has relationships with many financial institutions. They are already familiar with which banks would extend you credit and which ones likely won’t. They can streamline the entire process for you, maximize the amount of credit you receive and push things through much quicker than if you worked alone.
Operation Hope Business Program
Operation Hope is a non-profit company dedicated to serving aspiring entrepreneurs in low income neighborhoods. Through many of their programs, they are able to help small business owners in the area of credit and money management, financial literacy, youth entrepreneurship, business development, and of course, access to small business financing options.
For those that have been severely impacted by the Coronavirus, below are a list of some programs that you can supplement to the already mentioned programs above. Stack as many of these loans and grants to start a trucking company that is financially healthy from the very beginning. The sad reality is that we see many many trucking companies start off with such little financial backing that well over half of them don’t make it past the first 6 months of business.
Economic Injury Disaster Loan Program
In light of the Coronavirus that has impacted the entire global economy, but specifically the United States, the government has committed to introducing at least $1.3 trillion dollars back into the economy for those who were most affected by this rapidly spreading virus.
As an example, the Small Business Administration is setting aside funds mandated by the President to distribute low-interest federal disaster loans for working capital to small businesses. According to the SBA, loans can be offered up to $2M and can be used to pay fixed debts, payroll, accounts payable, and other bills. The interest rates on these loans have been set at 3.75% for small businesses and 2.75% for non-profits.
State and local governments have allocated funds to assist with businesses needing help due to the Coronavirus. These grants can be located at the following:
Atlanta, GA: The Atlanta City Council has approved a $7M fund and specifically allocating $1.5M to small businesses.
Chicago, IL: Mayor Lori Lightfoot has announced a $100M relief package for businesses struggling to keep the lights on, you can find out more about the plan here which will provide low-interest loans for business owners.
Denver, CO: Has an Economic Development Plan which provides grants for small business owners for up to $7,500. More info about their economic relief program can be found on their website.
Florida: If you have anywhere between 2 and 100 employees, the Florida Small Business Bridge Loan Program is offering 1 year term loans of up to $50,000.
Los Angeles, CA: find loans ranging from $5,000 to $20,000 with very low interest rates of 0-3% at the city’s Microloan Program.
Massachusetts: For businesses that have less than 50 full and part time employees, you can apply for loans of up to $75,000 that are immediately available. Head over to the state of Massachusetts website for more info.
Michigan: The state has received approval to implement a $10M grant program and a $10M loan program for small businesses through their relief program.
New York, NY: businesses with fewer than 5 employees are being offered a grant that covers 40% of their payroll for two months while those companies with under 100 employees and sales down more than 25% can apply for up to $75,000 loans at 0% interest rates. Find out more info here.
Portland, OR: The city is offering support with a prioritization to Asians and Pacific Islanders through their $190,000 emergency fund.
Sacramento, CA: If you are a small business you can apply for a loan up to $25,000 with 0% interest through the city’s relief fund.
Salt Lake City, UT: up to $20,000 loans with 0% interest rates are being offered through the city’s Emergency Loan Program. Read more about this program here.
Wisconsin: the state has set up a $5M grant program that targets small businesses with fewer than 20 employees by offering up to $20,000. The program can be found on their Small Business 20/20 webpage.