Ask, Advise & Network
A Forum for Independent Consultants
Sorry, you must be logged in to participate in Patina Connects
To sign into Patina Connects, simply use your Patina Nation log in and password you used when you became a member of Patina Nation.
Government Stimulus Resources for Contractors
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.
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.
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.
If you go to www.sba.gov they have all the documents, and you can apply online.
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 email@example.com
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.
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.
- 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.
- 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.
- 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
Check your local SCORE chapter.
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.
Main Street Funding llc