March 4, 2021 UPDATE:
The Small Business Administration (SBA) has released new guidance regarding the Paycheck Protection Program (PPP). These Interim Final Rules (IRF) include changes for the self-employed, freelancers, and gig workers. Learn more here: IRF Document.
Details of the new guidance includes:
Here’s information you need to know about how to apply for a PPP loan if you’re a sole proprietor, independent contractor, or gig economy worker.
Most small businesses qualify for the Payment Protection Program. This includes:
The only stipulation is that your business was operational as of February 15, 2020. If you started your business after that date, you will not be eligible for this program.
You cannot receive funds from both unemployment benefits and a PPP loan at the same time. Since you can use the PPP funds to pay yourself, you’ll be considered to be fully covered during the 8-week covered period if you use that timeframe.
Consider the payout of each program to determine which is the best fit for you.
SmartBiz has helped thousands of American small businesses get the funding they need during the pandemic crisis. We know this new round of the PPP program can be a lifesaver for hard-working entrepreneurs. SmartBiz loans has created a streamlined, online application to help these workers easily apply for the funding they need in 2021.
PPP loans will cover payroll costs including benefits for individual salaries up to $100,000. Contractors and self-employed workers can essentially use a PPP loan to fund their salaries (including wages, commissions, and tips) with a loan that is 2.5x their average monthly net profit, up to $100,000 on an annualized basis. The SmartBiz Loans platform will help you calculate your loan amount.
NOTE: The new legislation changes the PPP loan calculation formula to help sole proprietors, independent contractors, and self-employed individuals receive more financial support.
The application for sole proprietors and independent contractors has been greatly simplified. Here’s a list of items to gather.
Yes! Funds can be 100% forgiven if used as designated. Self-employed individuals can use a simplified forgiveness application called the ‘EZ Form’. This form applies to you as long as you don’t have employees on payroll. If you do have payroll expenses, then you can use the standard forgiveness application.
Visit the SmartBiz Loans website for comprehensive information to help you decide if a PPP loan is right for you: Paycheck Protection Program Details.