After running out of money for the Economic Injury Disaster Loan Grants in mid-April, and only reopening to Ag businesses after the second tranche of funding was passed into law on April 24th, the EIDL Grants are now open to all small businesses, and allow for advance payments of the EIDL loan of $1000 per eligible employee. This means that independent contractors, freelancers, and gig workers are eligible to receive a $1,000 grant that does not have to be repaid. Also, you can qualify for the actual loan with some favorable terms.
This was the statement from the SBA, “To further meet the needs of U.S. small businesses and non-profits, the U.S. Small Business Administration reopened the Economic Injury Disaster Loan (EIDL) and EIDL Advance program portal to all eligible applicants experiencing economic impacts due to COVID-19 today.”
The Paycheck Protection Program still has about $100 billion left in it, and most businesses who would qualify for that program have already applied, so it is great that this additional resource has opened back up, and could give some much needed assistance to small businesses and self-employed individuals who are still looking for clarity on how their business will rebound as our economy reopens.
I do not know how long this program will last, as they only passed an additional $60 billion when they refunded the PPP. So talk to your accountant and fill out the application if you think this may be a good fit for your business.
If you are looking for some more information on how to fill out the app if you are an independent contractor or self-employed, here is a great synopsis from a Forbes Article:
“If you are an independent contractor, freelancer, or gig worker, here are some tips on filling out the application:
- On the first question, check the third box as you are applying as an independent contractor or sole proprietorship.
- You must add your Social Security number if you are applying as an individual independent contractor, freelancer, or gig worker.
- The form will ask you for the gross revenues for the last 12 months for your independent contractor business and the “cost of goods sold.” You can estimate this based on what happened in 2019. Cost of goods sold means the expenses incurred in the process of providing your product or service as a freelancer, gig worker, or independent contractor.
- Where it asks for “Owner” put your name and “100” percent owner.
- It will ask for the date the business was established. This is the date you started doing freelance, gig work, or independent contractor work. Just estimate if you don’t have the exact date, but make sure it was before January 31, 2020.
- The form will ask for the bank account to which you want the grant money direct deposited. You need the name of your bank, the account number (the middle number at the bottom of your checks), and the routing number (the number at the bottom left of your checks). See the question below on direct depositing.
- For your business phone number, it’s okay to give your cell number.
- “Is your business owned by a business entity?” The answer is no since you are an individual owner.
- When the form asks for your business name, just enter your individual name if you don’t have a business name.
- You can ignore the question “If anyone assisted you in completing this application …” unless you have in fact gotten help.
- Make sure to check the box that says you want to apply for the $10,000 grant (although it will only be $1,000 for independent contractors, freelancers, and gig workers).
The form should take about 15 minutes to fill out. After it is completed and submitted, the SBA will give you a confirmation number, so keep a copy of that for any follow-up.”
As always, please know that we are not CPA’s, so anything you see on our blog is just for your information and should not be considered advice as we do not know your specific needs or issues. Please consult your CPA or Advisor.