Gig Workers: Apply for your forgivable PPP loan now
Trying to keep up with the relief proposals out of Washington is enough to make a gig worker’s head spin. You have a few days to apply for a forgivable PPP loan, but you need to act fast. Funds for the Paycheck Protection Program’s Economic Injury Disaster Loans (EIDL) program have been allocated, but loan applications are still being accepted until August 8 for PPP loans.
Gig workers, you are eligible for PPP loans as sole proprietors
The EIDL grants gave instant relief for up to ten employees in $1,000 grant payments up to $10,000 per business. For gig workers operating as sole proprietors who found themselves unable to work or who had their work impacted by COVID, they were eligible for a $1,000 advance payable to them as a sole employee.
As we wait for a new bill to be approved, we encourage all gig workers who filed a 2019 tax return to apply for a Paycheck Protection Program loan through the SBA by August 8
The EIDL advance grants have run dry but will be replenished — an additional $80 billion is expected to be approved for the grants.
Drop everything and apply for your PPP no later than August 6
Gig workers have just a few days to apply for an Economic Injury Disaster Loan, and they need to act fast. Move heaven and earth to get your application in by August 6 so that the SBA has time to submit your application by the August 8 deadline.
From the trenches
A gig worker in Austin, Texas worked DoorDash and gathered signatures for political initiatives in 2019. Although the EIDL monies were all allocated, he qualified for $8,000 in PPP relief, but because the signature-gathering was considered seasonal, he only received $4,000. Unable to gig due to a back injury, the loan was a welcome relief while waiting for his PUA.
He applied for PUA and UE benefits in April and just this week received his PUA. With little hope of any signature-gathering work and unable to DoorDash, he will apply for an EIDL grant when the fund is replenished and hopes that the PUA stays at $600 per week.
The advice out there from the finance pros is to find a bank that will handle this process for you, any mistakes, and your application might be rejected.
We’re hearing that the big retail banks aren’t being quite as helpful as some of the upstarts like Kabbage, Chime, or Lendio. So if your traditional bank is not jumping to help you with this critical loan application, get online to complete your application through one of these providers.
How does the PPP loan process work for gig workers?
If you file a form 1040 Schedule C and have earnings under $100,000, you are considered a self-employed taxpayer with no employees and the SBA will give you a loan based on your 2019 net profits. So if you netted $25,000 last year, your PPP loan amount would be a little over $5,000.
Is there a catch? Not really. The money has to go to business expenses to maintain or grow your business and cannot go to pay off debt. But here’s where it gets really good. Within about ten weeks of receiving the loan, borrowers can apply for PPP forgiveness and the loan will be forgiven — tax-free.
Don’t give up on getting your PUA
The $600 per week Pandemic Unemployment Insurance (PUA) ended on July 25 with competing, lowered amounts proposed for those unable to work due to COVID, with many people still waiting to receive their PUA due to antiquated IT systems in many states.
For every PUA horror story we’ve heard (and there are a lot) we’re also hearing of people who are finally getting a nice lump sum that is allowing them to catch up on rent, car payments, student loans, and credit card payments.
But for those who can’t go back to work due to health reasons or lack of work, more PUA is on the way, though it could go as low as $200, and at most, stay at the current $600 per week.
Our prediction is to expect something in the middle, or the Senate version which would be 70 percent of wages capped at $500 per week. CNBC explains all of the details in this article.
The stimulus checks are coming
Another bit of good news is that the stimulus checks will once again be generated in the amount of $1,200 for every American.
Gig workers, get online now and apply for a forgivable PPP loan before the deadline, by August 6. If you are still waiting for your PUA funds we feel your pain and hang in there, relief is coming.