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Government Stimulus...
 

Government Stimulus Resources for Contractors  


Diane Hensley
Posts: 8
Patina Nation Member
Joined: 1 year ago

Looking for "official" links and resources to manage leveraging the Government Stimulus Coronavirus resources for small businesses and contractors.

Any experiences and or recommendations are appreciated.

14 Replies
Ray Grymski
Posts: 1
Member
Joined: 2 years ago

By "contractor", I assume you mean 1099 coaches and consultants (maybe with a small number of subcontractors), versus say, Uber drivers.

I've been researching this topic over the past few days but am stymied by the lack of information. The governor of Michigan posted a message on the state's website asking to be patient as they are still waiting for guidance on this topic from the federal government. I'm an Illinois resident and can find no specific website with complete information.

My guess is that contractors: 1) will be able collect unemployment if they can show loss of income due to the pandemic, 2) obtain a loan, if they can't pay operating expenses directly due to loss of revenues from the pandemic, and 3) take advantage of being able to withdraw $100,000 from their retirement account with beneficial repayment terms.

However, I'm not very knowledgeable about this topic and welcome input from others with more information.     

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2 Replies
Diane Hensley
Joined: 1 year ago

Patina Nation Member
Posts: 8

@raygrymski-com

Thank you for your response - I think many are searching for answers and that is why I turned to this helpful network.

I am actually a Sole Proprieter LLC and while this status is called out as eligible, I am not clear how to calculate "payroll" as that is done through draws and not a formal payroll system.  Also not sure what expenses are allowable as business expenses.  

Still searching, but information share here has been helpful.

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Bob Yoon
Joined: 3 months ago

Patina Nation Member
Posts: 1

@diane-hensleyrocketmail-com

I am wondering the same thing. What do I use to calculate my average monthly income? My 1099 total or my W-2 from my LLC? Of course with tax season, my accountant has been slow to get back to me.

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Dan Zautis
Posts: 27
Forum Admin
Patina Nation Member
Joined: 1 year ago
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Steven Hirt
Posts: 2
Patina Nation Member
Joined: 10 months ago

Try the US Chamber of Commerce website and talk to your banker  I am intimately involved in this.. the guidance has changed almost daily.  Bank of America is taking applications...they have provided their interpretation on their website.

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3 Replies
Diane Hensley
Joined: 1 year ago

Patina Nation Member
Posts: 8

@steven-hirtoptimanow-com

Steven -  Thank you.  I currently bank with US Bank but they are not shown as an approved Lender on the US Government site.  Should I go ahead and apply with a bank listed or wait for US Bank to file for Payroll Protection?  

I have heard you can't get the SBA loan and Payroll Protection.  Is that true?

Thanks so much.

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Steven Hirt
Joined: 10 months ago

Patina Nation Member
Posts: 2

@diane-hensleyrocketmail-com

You can get a EIDL loan and the PPP.  The EIDL is administered directly through the SBA and up to 200k can be obtained without personal guarantee although you must provide a personal financial statement.  The SBA is allowing these loans to be rolled over into the CARES Act.

PPP loans are done through an approved SBA lender...easier if your own bank but not mandatory.   I would find a lender ASAP as the line is long and the funds will likely be consumed quickly.   If you are independent your annual payroll is limited to 100k plus retirement,  healthcare and state taxes.  Futa and Medicare must be excluded from qualified payroll.   Hope this helps a little.

  

 

 

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Diane Hensley
Joined: 1 year ago

Patina Nation Member
Posts: 8

@steven-hirtoptimanow-com

Thank you!  Very helpful!

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Joan Smith
Posts: 4
Patina Nation Member
Joined: 1 year ago

If you go to www.sba.gov they have all the documents, and you can apply online.

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Dennis Baughman
Posts: 1
Patina Nation Member
Joined: 4 months ago

Attached is an analysis we posted to help small businesses with PPP & EIDL.  Both programs should be subscribed too.  I would love to talk with anyone I can help.  I am having calls with small business across the country every week.  Best regards, Dennis Baughman PH: 440-930-2630  dbaughman@baysideenterprises.com

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Michael Loquercio
Posts: 1
Patina Nation Member
Joined: 3 months ago

Here's a link to Chicagoland Food and Beverage Network in Chicago along with IMEC who have both created pages on their websites to address Corona Q&A - they do have stimulus information.

Also included a link to an article that describes some of the frustration from small businesses with applications, grants, etc.

 

https://www.chicagolandfood.org/COVID-19

Coronavirus Updates

https://slate.com/business/2020/04/care-act-small-business-disaster-grants.amp

 

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Robert Schwartz
Posts: 1
Patina Nation Member
Joined: 1 year ago

I've been spending a lot of time with small  businesses helping and coaching them in how to navigate the CARES Act.  Let me share what I've found.

There are three main sources of help. 

  1. Unemployment insurance.  State unemployment insurance does not allow for contractors, self-employed, gig workers, etc. to receive unemployment benefits . The CARES Act does and provides up to 16 weeks of  "federal" unemployment benefits at $600/week (regardless of your income level).  The plan is paid by the federal government and administered by the state's unemployment agency.  That's the good news.  The bad news is that the federal government hasn't issues the regs yet so no state can begin to make payments. Keep checking with your state unemployment agency.
  2. Paycheck Protection Program.
    This plan is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities. You are also eligible for a PPP loan if you are an individual who operates under a sole proprietorship or as an independent contractor or eligible self-employed individual, you were in operation on February 15, 2020. You can get 2.5x your average monthly payroll.

The great news is that is keep employees on the payroll (if self-employed or a sole proprietor, you need to stay in business and pay the monies to yourself and report it as income) for 60 days, the SBA will forgive the loan. The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll). Loan payments will also be deferred for six months. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees.

Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease. This loan has a maturity of 2 years and an interest rate of 1%.
It's all great news except the implantation has been, to put it mildly, a shit show. Banks are overwhelmed, systems keep crashing, rules keep changing, etc. Keep trying your bank, but expect a lot of time and frustration. My Wells Fargo banker told me about Lendio (lendio.com) yesterday. They are taking PPP applications and work behind the scenes to process the loans with a network of 300+ banks.

  1. Economic Injury Disaster Advance Loan.

In response to the Coronavirus (COVID-19) pandemic, small business owners in all U.S. states, Washington D.C., and territories are eligible to apply for an Economic Injury Disaster Loan advance of up to $10,000. This advance will provide economic relief to businesses that are currently experiencing a temporary loss of revenue. Funds will be made available within three days of a successful application. This loan advance will not have to be repaid.

Application is directly through the SBA.  The bad news, the 3-day commitment for funds is not being met.  The SBA is swamped with requests and the time to fund may be weeks, not days.

 I hope the information helps

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Mary Frances Cox
Posts: 1
Patina Nation Member
Joined: 4 months ago

Check your local SCORE chapter.  

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Mark Schubring
Posts: 1
Patina Nation Member
Joined: 1 year ago

A heads up that the window for consultants to apply for the Economic Injury Disaster Loan is scheduled to open Friday.  As stated above apply as early as you can.

Another option is applying for existing SBA programs.  The line may well be shorter and SBA is offering to pay (not defer) the first six months payments.

Stay healthy!!

Mark Schubring 

Main Street Funding llc

mschubring@msfcommercial.mortgage

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