The form will ask for the bank account to which you want the grant money direct deposited. But now the SBA has lifted the suspension because of legislation passed on April 24, 2020, that allocated another $60 billion for EIDL and grants thereunder. If you don’t have this number, talk to your lender. Customer relationships thrive when local businesses and consumers are connected through Womply data and technology. If you are the sole owners and staff of your business, you can still receive PPP loans and use them towards your payroll costs. While S/C-corporations, tribal businesses, and businesses with up to 500 employees were able to apply for loans on April 3rd, now sole proprietors, independent contractors, and self-employed individuals can apply. They are no longer included within this grant. Richard D. Harroch is a Managing Director and Global Head of M&A at VantagePoint Capital Partners, a venture capital fund in the San Francisco area. (2) VERIFICATION.—Before disbursing amounts under this subsection, the Administrator shall verify that the applicant is an eligible entity by accepting a self-certification from the applicant under penalty of perjury pursuant to section 1746 of … He has been involved in over 200 M&A transactions and 500 start-ups. Generally an independent contractor is not considered to be an employee. We recommend you read our full PPP loan FAQs here, or click here to start your free application and get access to our helpful customer service staff who will guide you through the process. Click here for the full PPP loan forgiveness application, Click here for the new Form 3508EZ application, If you don’t fit into any of the above conditions, you will need to complete and submit the full. For a sole proprietor or independent contractor, that means wages, commissions, income, or earnings from self-employment ($100,000 a year max for each employee). You also need to be self-employed, an independent contractor, or a sole proprietor. and get access to our helpful customer service staff who will guide you through the process. The SBA disaster loans and grants include the following eligible claimants: You must have been in business as of January 31, 2020. Now, there's another provision of the EIDL program, called the advance, under which small-business owners can collect a $1,000 grant per employee for up to 10 employees… Please start typing, and then choose your business from the dropdown. Independent Contractors and COVID-19 Don’t include the check number (1234 on the image below). A 1099 independent contractor is a subcontractor–not an employee. 121.201 for the Applicant’s industry. Direct deposit information is as follows: Be sure to include your routing number and account number, as seen in the example above. PPP Loan Amount: This should be the total loan amount you received from the Lender. ! An employee is any member of your company that receives compensation through your payroll, with the exception of independent contractors (more on this shortly). The Paycheck Protection Program, which officially opened for borrowers Friday morning, provides up to $10 million in forgivable loans to small businesses with 500 or fewer employees. Click here for the Spanish version of the new Form 3508EZ. We’ll go over what counts as an “employee” for your PPP loans and also discuss what you need to do to have your loan forgiven. On the first question, check the third box as you are applying as an independent contractor or sole proprietorship. See the question below on direct depositing. The Treasury released a new IFR and an “easy” version of the PPP loan forgiveness application on June 17, 2020. On the sample check below, the routing number is 250250025. Double-check that you have provided the correct numbers. To qualify for a PPP Loan as a sole-proprietor, your business must have been in operation since February 15th, 2020. Nonprofit organizations may now be eligible. You need the name of your bank, the account number (the middle number at the bottom of your checks), and the routing number (the number at the bottom left of your checks). He can be reached through LinkedIn. Borrowers are not required to make loan payments prior to their receipt of a decision on their loan forgiveness application, provided they the application is filed within 10 months of receipt of the loan. Cost of goods sold means the expenses incurred in the process of providing your product or service as a freelancer, gig worker, or independent contractor. This is also capped at $100,000 on an annualized basis for each individual. See your revenue performance and know where you stand against competitors. Independent contractors will now be eligible for SBA loans. Under the CARES Act passed on March 27, 2020, independent contractors, gig workers, and freelancers affected by the coronavirus crisis are eligible to receive a government grant of $1000. This also means that if you use your PPP loan funds to pay yourself and for other approved expenses and apply for loan forgiveness with the appropriate documentation, For full details on how you should spend your PPP loan, go, Salary, wages, commissions, or tips (this is capped at $100,000 based on annual pay for each employee), Employee benefits, including paid time off for vacation, family, medical, or sick leave, Payments for healthcare benefits for employees, State and local taxes on employee compensation. The “routing number” for your bank, which must contain 9 digits. account and we’ll keep you updated on new funding opportunities. This includes employees obtained from a temporary employee agency, professional employee organization or leasing concern. Lender PPP Loan Number: Ask your lender for the number they assigned to the PPP loan. In this 4-minute read: $284 billion of new PPP funding for 2021 Additional eligible expenses allowed under PPP funding Simplified, […], In this 5-minute read: What is remarketing? Go to the SBA application site for application. There are many lenders who offer loans for independent contractors. Richard is the author of several books on start-ups and entrepreneurship as well as the co-author of Poker for Dummies and a Wall Street Journal-bestselling book on small business. On June 15, 2020, the SBA announced that it was again opening up its Economic Injury Disaster Loan (EIDL) grant and loan program. As an independent contractor or sole proprietor, you would file a Schedule C with your 1040 tax return each year. So check your bank account regularly. This program is for any small business with fewer than 500 employees (including sole proprietorships, independent contractors and self-employed persons), private non-profit organization or 501(c)(19) veterans organizations affected by COVID-19. This number times 2.5 equals your PPP loan amount. No interest payment is required either. In order to have your PPP loans forgiven, or at least partially forgiven, the majority of the payout has to go towards your payroll expenses and maintaining your staff. That’s kind of obvious, isn’t it? © 2020 Forbes Media LLC. This means that independent contractors… Therefore, they don’t qualify for small business loans from the SBA. You are an employee of your business, so you can use your loans to pay yourselves. Make sure to check the box that says you want to apply for the $10,000 grant (although it will only be $1,000 for independent contractors, freelancers, and gig workers). The fast, secure way to accept and request payments. His focus is on Internet, digital media, and software companies, and he was the founder of several Internet companies. The U.S. Chamber of Commerce has issued this guide and cheat sheet to help independent contractors and self-employed individuals prepare to file for a loan from the CARES Act's Paycheck Protection Program (PPP) loans / grants, SBA's Economic Injury Disaster Loans (EIDL), and/or Unemployment Compensation for losses of income related to the coronavirus pandemic. (a) In determining a concern's number of employees, SBA counts all individuals employed on a full-time, part-time, or other basis. $2T Stimulus Overview Covid-19 Loans: What You Need to Know About 1099 Workers New guidance clarifies that independent contractors do not count … What to do before you start Complete how-to guide for setting up your […]. Send discount, promotional, and transactional emails, automatically. On December 22, Congress passed a bill renewing funding under the CARES Act, including an additional $284 billion earmarked for America’s struggling small businesses. This is the date you started doing freelance, gig work, or independent contractor work. However, since sole props and contractors usually don’t have payroll, their loan is based on 2019 net profit divided by 12, to get a monthly “average” net profit. This guidance comes from the SBA’s major new rule on the limitations on subcontracting, in which the SBA responded to public questions about how independent contractors are to be treated.. I’m often asked whether a small business can treat its 1099 independent contractors as “employees” for purposes of meeting … Similar to traditional employers, independent contractors can receive loans and use them toward their own payroll costs (meaning to pay themselves). is one of the world’s largest online resources for small businesses, providing essential tools and resources to start, grow, and manage your business. Opinions expressed by Forbes Contributors are their own. How to remarket on Facebook Step-by-step walkthrough for starting your remarketing campaign […], In this 8-minute read: What is remarketing? Customer relationships thrive when local businesses and consumers are connected through Womply data and technology. The application should be found at You may use Form 3508EZ if: If you don’t fit into any of the above conditions, you will need to complete and submit the full PPP loan forgiveness application. Copyright © by Richard D. Harroch. Number of employees does not matter. On the sample check below, the account number is 2020202086. However, SBA will treat an independent contractor as an employee where there is evidence of an employee/employer relationship.