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Paycheck Protection Program (PPP) Loan Guide For Independent Contractors, Freelancers, & The Self-Employed

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Shelbi Wescott

Shelbi Wescott

Writer at Merchant Maverick
Shelbi Wescott is a writer and educator from Portland, Oregon. When she isn't writing about ways to help small businesses, she is a published author churning out pages for her science-fiction and mystery books. In 2015, her book After Life won an Honorable Mention for Best YA Mystery from the Library Journal. (It has ghosts. And mystery.) Shelbi has both a BA in English Literature and a Masters in Teaching from Lewis and Clark College.
Shelbi Wescott
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16 Comments

Responses are not provided or commissioned by the vendor or bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the vendor or bank advertiser. It is not the vendor or bank advertiser's responsibility to ensure all posts and/or questions are answered.

    Audrey

    Hello, I am in desperate need for your help. I am a hair stylist and I work for commission. I pay her 40% of what I make per day. I do not have an LLC because I never thought I needed one. I got a 1099 this year through square because that’s what I used as a form of payment. When I went to my bank, they told me that since I don’t have a business account they won’t help me. . Do you know what I would be considered and who I could possibly go through to get a loan? Thank you so so much!

      Erica Seppala

      Hi Audrey!

      Some lenders (especially banks) are requiring PPP applicants to have a business bank account. You can either open a business bank account or you can choose a lender that does not have this requirement. If you are self-employed and meet all other requirements, you should qualify for a PPP loan.

      Unfortunately, the program ran out of funding on May 4. Now, most lenders are no longer accepting new applications. However, there is still funding available through minority depository institutions (MDIs) and community development financial institutions (CDFIs). These institutions typically provide funding to underserved communities. If you qualify, you can find a participating CDFI here. Good luck!

        ob

        hello, I applied and got approved for the 2nd ppp loan But when reviewing my bank statements again I Don’t have a 25% reduction on any quarters.

          Debby Campbell

          I am a sole-proprietor 1120S who was approved for the 1st round of PPP and since had the loan forgiven.
          I was turned down for the 2nd round because the SBA requires a 940/941 (which a sole-proprietor does not file) or 3rd part payroll (I take shareholder distributions as a sole-proprietor). It’s disappointing to say the least that I am turned down for documents I’m not obligated to file.

            Kim M McCullough

            Hello, Thanks for all the info I still cant find the code we need to use for Cosmetologist? Also it asks for start of business but only goes back to 2011 or so. Could you plz help me, Thanks so much Kim McCullough

              Jessica Dinsmore

              Hi Kim,

              I think you are referring to the NAIC code. I tried searching “Esthetician” and came up with these codes. Hopefully, you identify with one of the options on the list! And when I pull up the SBA’s PPP application for schedule C filers, I’m able to type the year of establishment so I’m not sure if we are looking at the same thing. If you have additional questions or want to clarify, please reply and I’m happy to help!

                alicia francis

                Hi,
                I am a sole proprietor and I started collecting PUA back in march of 2020 because my business was affected by covid 19. does this mean I am not eligible for the PPP loan because I didnt work during that time. I only worked until about mid. February that year. If I am eligible, then how do I calculate what my loan amount should be? I would like to use some of the money for inventory also as the reason I am shut down is that didnt make enough money to replenish it due to lack of customers when the pandemic hit. this money will be what gets my business running again. Also, my husband works for me too. Am I able to pay him with this as well?

                  This comment refers to an earlier version of this post and may be outdated.

                  Jessica Dinsmore

                  Hi Alicia,
                  Unfortunately, based on the information provided, it looks like you are not eligible for 2 reasons — you’re receiving PUA and your business closed last year but did not reopen (you can’t receive a PPP to restart a closed business).

                    This comment refers to an earlier version of this post and may be outdated.

                    Chris Kehoe

                    Hi,

                    Your information about the PPP is very helpful.

                    I was recently approved for PPP. As a sole proprietor/ single employee business owner, is there a minimum timeframe the loan can be spent to be forgivable? For example; I pay myself (60%) salary over 1.5 months (6-weeks) and the balance of the loan is paid to suppliers (40%) during this same timeframe.

                    My question about PPP forgiveness also relates to unemployment benefits through PUA. I understand it is not recommended to “double-dip’, and I am concerned WHEN and IF I will qualify for unemployment once my PPP runs out.

                    If you have another article you can refer me to or you are able to answer this would be so helpful.

                    Thank you!
                    Chris

                      This comment refers to an earlier version of this post and may be outdated.

                      Jessica Dinsmore

                      Hi Chris,

                      I think this post on PPP forgiveness requirements will answer your first question.

                      Regarding your second question, our post on PUA/FPUC for self-employed should help explain the answer to your second question.

                        This comment refers to an earlier version of this post and may be outdated.

                        Patty

                        if you have a small side business that has not been registered with the state, can you apply for the EIDL loan?

                          This comment refers to an earlier version of this post and may be outdated.

                          Jessica Dinsmore

                          Hi Patty,

                          We haven’t seen any language to indicate that a business is required to register with the state to qualify.

                            This comment refers to an earlier version of this post and may be outdated.

                            Wilkins PEREZ-LOPEZ

                            How, does one go about claiming loan forgiveness when you are a self-employed, sole proprietor?

                              This comment refers to an earlier version of this post and may be outdated.

                              Jessica Dinsmore

                              Hi Wilkins,

                              We explain the rules and how to apply in this post on PPP Forgiveness. Definitely let us know if you still have any lingering questions after reading. Good luck!

                                This comment refers to an earlier version of this post and may be outdated.

                                JL Mealer

                                I have a concern. First- Chase is not doing the government’s work aiding by the Coronavirus Aid, Relief, and Economic Security Act” or the “CARES Act” and instead making up their own rules. My personal Acct there was not a business Acct as a Sole Proprietor and my subs (private contractors) need to be paid or they will find new jobs by the rime this bullcrap is over.
                                I have their docs, the 2019-20 w-9’s and spread sheets… How best to find a local bank to get them paid.
                                I’ll even forgo my own pay as long as I can get them their paychecks. Sadly, two are summer hired college students and hit that grey area of being too old for their parent’s pay-outs.
                                They are losing out far more than I am and I don’t have the funds to give them bridge checks.
                                BTW, I do not have an EIN for my sole proprietorship, but do for my LLC which is not really part of this handyman-mechanical business.

                                HELP HELP HELP

                                  This comment refers to an earlier version of this post and may be outdated.

                                  Jessica Dinsmore

                                  Hi JL,

                                  Unfortunately, as of today, all of the funds for the Paycheck Protection Program loan program have been claimed and PPP lenders are no longer accepting new applications. We will continue to monitor the situation and will let small businesses know if more funding is allocated for the program. In the meantime, you and your subs may want to check out unemployment options to see if you qualify. The rules are more lenient right now and the payouts are more generous. We wish you all the best.

                                    This comment refers to an earlier version of this post and may be outdated.

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