Self-employed workers and independent contractors can take advantage of PPP loans in accordance with SBA guidelines. If you use the loans appropriately, your business has the potential to receive a 100% credit forgiveness. Jack – You will ask the lender for forgiveness in the future and they will ask you to submit acceptable documents. Keep in mind that everyone is currently waiting for more forgiveness advice from the SBA and the Treasury Department. Contact your lender if you have already submitted a loan application based on Schedule C net income and if you have any questions about the recalculations. I`m sorry about how the comments dashboard works, I don`t see what you`re responding to. All the guidelines mention 1099-MISC, but I don`t see where this should be a difference since 1099 NEC as it reports the income of independent contractors. Lee – the SBA and the Treasury Department have not yet issued guidelines for your situation. The best thing we can recommend is to contact your senators or representatives in Washington DC to explain that you need this guide to apply. Independent contractors collect Forms 1099-MISC (but for the PPP, you must file a Schedule C, not your 1099). Hello, I am an Uber delivery driver. I reported my earnings for 2019.
Am I eligible for the PPP loan? If so, where can I submit? If he spends the money properly during the period covered and receives a rebate for that second loan, I am not aware of any additional effects if his business does not survive. If he does not receive the pardon, he must determine the best course of action and will probably want to seek legal advice. There is no personal guarantee, but defaulting on a federal loan can make it difficult to obtain other federal loans in the future. I encourage him to talk to a lawyer about it. NOTE: Due to overwhelming demand and limited funding, EIDL loans are only approved up to a maximum of $150,000. I would like to join in all the thanks for this article and these useful comments. I am in the same boat as Ryan, who announced yesterday that he had received a $1,000 EIDL that had been requested a long time ago and was obtained the day after the PPP loan was financed. I have read elsewhere that it is acceptable to have funds from both when they are used for different things, which means that the PPP money replaces my Schedule C net profit for 8 weeks, but the EIDL money is used to pay my mortgage/home office utilities for a few months. Perhaps this distinction only applies to EIDL loan funds beyond the grant? Or if I can document that I used (part of) the EIDL subsidy to pay non-salary costs, does this prevent (part of it) from being deducted from the PPP rebate amount? If so, how many months of these expenses are allowed? The same 2 months as ppp? The rest of 2020? I understand if no one yet has the answers to such specific situations, but I thought it couldn`t hurt to ask. Thank you very much! The PPP hotline information you gave is AWESOME! They respond immediately. However, they only care about forgiveness. Do you know how I can talk to someone at the SBA? If you call the sba number, you won`t get anywhere.
I have read the instructions for completing the loan application and it seems clear that the bank was right to grant the loan. I can`t pay $5000 for a lawyer for a $13000 loan. Thank you for all your help. I just need to know if the SBA accepts bank statements showing the contractor`s incoming income for 2019, or if it MUST be a Schedule c or 940/1. Sharon – this document describes how to calculate the ppp loan amount of the first draw by business type. See question 5 for The S Body. Keep in mind that at this point it can use the tax information for 2019 or 2020. (It`s similar for the 2. Draw, except that you have to prove the 25% reduction in revenue and that companies with a NAICS code from 72 can get 3.5 times instead of 2.5 times.) Once the loan has been disbursed and the lender has filed Form 1502 with the SBA, there is no way to reapply for a higher amount. I applied elsewhere and they say they look at my information. I have been hearing it for months.
Can I reapply You can try applying for an Economic Disaster Loan (EIDL) through the SBA. For small businesses whose pay slips go to employees, the amount of their PPP loan is 2.5 times their average monthly payroll, up to a maximum of $10 million. If you are your only employee, how does this apply to you? However, if you don`t have employees, you can still get PPP loan financing. With changes to loan calculations for Schedule C applicants, self-employed and independent contractors can use gross income instead of net income to determine the total amount of their loan. Michael Jones is the Editor-in-Chief of Funding Circle, which specializes in small business lending. He holds a degree in International Business and Economics from Boston University`s Questrom School of Business. Prior to joining Funding Circle, Michael was Head of Content at Bond Street, a venture-backed fintech company specializing in small business lending. He has written extensively on small business lending, entrepreneurship and marketing. I am an independent entrepreneur who started my business earlier this year, but was operational before 14.02.20. How do I complete the PPP loan? I don`t have any staff, I`m sorry you`re having trouble applying for PPP Janet. The SBA requires proof of salary. A 2020 Schedule C tax return may work, but you`ll need to report your income to the IRS on a Schedule C tax form (or at least get 1099 of those you worked for).
If your income is all “under the table” or not reported to the IRS for taxes, as it seems, I don`t think you can qualify for any of these assistance loans. If you need more direct help with your business and available programs, I recommend contacting your local SCORE or Small Business Development Center. They offer free mentors and plenty of help with these Covid relief loans. You can find your local office here. If you include wages and salaries paid to employees (or yourself) in your calculation of the PPP loan amount, you will not be able to use your gross income as shown on line 7 of Schedule C for 2019 or 2020. Note: Do not include payments you make to 1099 contractors in your payroll. You can apply for a PPP yourself. Rick – I don`t know. The best thing I can say is to contact the lender.
However, you should try to reduce your taxes for 2019 as soon as possible, as your line 31 of Schedule C 2019 is the amount you would have to use to qualify, which may affect your eligibility for the credit remittance. Hello, I took over a business as a sole proprietor in early December 2019, so my schedule only appears for 1 month with an income of $6,522. Does this mean I get a $16,305 loan for $6.52 ×2.5 = $16,305 or how they will charge? That said, it will be much easier to apply for a PPP if your accounting is up to date and you have kept good records of your company`s income and expenses. If you`ve run your business with cash payments you haven`t reported to the IRS, mixed personal and professional funds, or if you`ve maximized expenses to the point where your business has only one loss, you probably won`t be able to qualify for the PPP loan your business would otherwise have been entitled to. .