Freelancers, take heart: PPP could actually be yours
Oxygen Banking Partners with Fundera to Help Find a PPP Lender for the Self-Employed
If you haven’t already heard, ladies, Congress has at last passed a second COVID relief bill, which includes a second round of the Paycheck Protection Program (PPP) loans for affected small businesses. That might be YOU!
The bill includes $284 billion earmarked for forgivable small-business loans. This extension is a heartening recognition that small businesses and freelancers are still struggling, and (even better!) it is more targeted to *actual* small businesses not Kanye West, with some specific allocations for underserved industries and minority owned businesses. Let’s have a look!
AM I ELIGIBLE?
You could be eligible for a PPP loan if:
You have fewer than 300 employees (duh)
You can show a revenue reduction of 25% during the first, second, or third quarter of 2020 relative to the same quarter in 2019
You were in business before February 15, 2020.
This includes sole proprietors (who report income and pay taxes on a Schedule C on their personal tax return), independent contractors (who collect 1099-MISC forms - but for the PPP, you’ll need to submit a Schedule C, not your 1099s) and gig economy workers who take on-call jobs provided by companies such as Lyft, Doordash, Uber, and Instacart. In fact, if you are a solopreneur or run a very small business, lender reimbursement economics are different this time around, with the aim to ensure these applications receive the attention they deserve. I can hear angels singing.
If you applied for the first round, you know: here was a lot of confusion during the first round of PPP, especially for people like us, which led to more than $130 billion in unclaimed funds due in large part to many believing they would not qualify.
DON’T I HAVE TO HAVE TRADITIONAL MULTI-PERSON “PAYROLL”?
Short answer: No!
Even if you don’t pay yourself a “salary” - you’re still earning a living wage from your work and reporting a yearly income on your taxes. That’s what is going to be taken into consideration here. No calculation on the PPP application will involve payroll, because you don’t have employees, and thus no “payroll”. Or if you are paying just yourself, thus a payroll of one. Paying others with a 1099 is not considered payroll.
WHAT DOCUMENTS WILL I NEED AS A SOLE PROPRIETOR?
1040 Schedule C for 2019
Your Date of Birth
A color copy of your Driver’s License (front and back)
1099-MISC, if you have them
Bank routing number & account number. (Oxygen account holders can find this by going into the app, clicking “Accounts”, selecting “Oxygen account”, then “Account information.”)
Copies of paid invoices, statements, lease agreements, etc. to help prove you had these expenses.