You have likely heard at this point that there are resources available to independent contractors, and we wanted to explain how to best access them.
Paycheck Protection Program (PPP)
If you are a small business with employees (LLC, S-corp, or C-corp) or a sole proprietor (filing Schedule C), you may also be eligible for the Paycheck Protection Program (PPP), which helps supplement payrolls on a temporary basis. Find out more here.
Small Business Loans
Depending on your state of residence, you may be eligible for small business loans aimed at small businesses and independent contractors under the Coronavirus Preparedness and Response Supplemental Appropriations Act. For more information visit the Small Business Administration website.
Some more info about these loans: They’re low-interest working capital loans of up to $2 million and can be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the current pandemic.
The interest rate is 3.75%, and the loans are based upon ability to repay, with long-term repayments up to 30 years.
If you own a small company (e.g. a spa or massage practice) that has been impacted, get in touch with a SBA loan office to initiate the application process. The application can also be completed online here.
Once a borrower submits an application, approval timelines depend on volume. The typical timeline for approval is 2-3 weeks and disbursement can take up to five business days. As of April 17, 2020, the first round of SBA funds has been exhausted, however, it is likely that more funds will be released in the near future.
Unemployment benefits
Under the CARES Act, independent contractors and self-employed individuals are now eligible for unemployment benefits. You must not be employed elsewhere and you must have lost income from the coronavirus. The important thing is that you should apply for these benefits as self-employed. If you do not see “self-employed” as an option on the form, then list yourself as your employer. Applying for benefits as a Zeel employee will delay your benefits, as that claim will be rejected and you will be asked to resubmit your 1099.
To find your state’s unemployment application link, click here.