I just got out of a webinar with an attorney from a law firm that helped to put together this CARES package. My fitness industry got the guy to come and break this mess down for us.
The SBA link floating around for the Economic Disaster relief is NOT the link we should be using. In that case, the loan must be personally guaranteed and paid back over 20- 30 years at 3.75% interest.
We are looking at the loan for the Paycheck Protection Program. It's exactly that- loans to cover your paycheck.
The link for the CARES loan will be a loan that is FORGIVEN, provided that ALL the money goes for what you stated in your application. It must be well-documented, because the government will want to see that. If there's any part of that loan you do NOT use, then you will repay it within 2 years at .5% interest.
The link for this CARES loan is not available yet. We need to check back regularly and take that document to the bank (if it's open, or else schedule a conference call with a banker) so they can help you determine what you can apply for and how much they will give you.
The best part of this is that if you are approved, then they will turn around and deposit this money into your account within 36 HOURS of the approval.
The loans will be first come, first serve. There is a limited amount available. They are allowing businesses to apply a week before independent contractors, so there will be even less money for us ICs to fight over. Do NOT HESITATE! Be ready with your tax documents to apply.
They will be basing your loan off your 1099s, so if you don't file a 1099 for your business, you might as well just go for the unemployment for ICs and call it a day.
As I stated in my title, independent contractors are allowed to apply after April 10th. So you really need to be applying on April 10th at 12:01 am. ;-)
Here's the sticky part that I think will be difficult for us. Many of us are not driving because of the virus. This program is to help us to continue being paid. You can't not drive and get the money. That's what unemployment is. How do we get around this?
My plan is to put on my app, but I'm going to stay in UberX mode. I will accept a trip if it comes across my app, but not move. I'm not going to be able to pick up unless I'm guaranteed that person is not going to have COVID-19. If they can't guarantee it, then the trip is cancelled. That means I'm still working, and I can show in my app that I've put in my 40 hours per week.
If you're part time, you can get the money, but you won't get much. It might make more sense to get the unemployment check. I'd look at both options.
To determine how much you can ask for, you have to look at a 2 month time period. I believe that 2 month time period is 2/20/19- 4/19/19. I think you can also use 2020 as well. I wasn't sure (I'll check), but I think they said 1/1/20- 3/1/20. That's easy. We can just go to our Uber partners website and look at the monthly breakdown to get that information.
Then you estimate out 2 1/2 months of earnings. So, for instance, if you made $4000 in the 2 month time frame at $2000/month, then you can estimate out your 2 1/2 months of earnings as $5000 total (2 months at $4000 plus 1/2 month at $1000= $5000). That will be what you can ask for.
You MUST pay your payroll for the two months. The other half month can go towards rent, utilities, insurance, and anything else that you think legally pertains to your business.
HERE'S THE IMPORTANT PART-----
THIS WILL BE A FORGIVEN LOAN IF YOU USE ALL OF THAT MONEY AS YOU SAID YOU WOULD
So, if you paid yourself your payroll, for instance, and then paid your rent, but you find you still have an extra $200, then you'll be forgiven $4800, but you'll owe the government $200. That will be paid back over 2 years at .5% interest.
We are forgiven the FULL amount if you use all the money for your payroll and the half month of "extras" you claim you have uses up the rest of that loan money.
Here's the catch- if you didn't make that much money, perhaps the SBA Economic Disaster relief money might work better for you. You have to kind of do the math and figure that stuff out. Because you can't just ask for any old money. You need to provide documentation when you apply for the CARES loan to see for what you qualify.
For some people, they may be better off getting unemployment money. For instance, if you're able to max out and get the $600 per week and end up with $2400 per month (but you have to pay taxes on that!!!! Factor that in!). Over 2 1/2 months, you'll get slightly more in unemployment than the scenario where you only got $5000 from the CARES loan. In that case, I'm going to stay home and collect the unemployment and call it a day.
Now, there is this thing called EIDL Grants, aka Economic Injury Disaster loans, through SBA. It provides up to $10,000 to small businesses. I know very little about that, except that it does NOT need to be repaid. You do need documentation for that, and they will ask for it when you go to the SBA website. Do not mistake that for the Economic disaster relief loans that need to be repaid at 3.5% interest over 20 years. I'm sorry- I have very little information to provide about that. I will see what research I can pull and perhaps do another big ass post on that. That might work in place of the CARES loan too. It really depends on how much you make and what works best to max out what you can get to keep yourselves going. Check into all these three options!
Finally (FINALLY), the attorney who gave the webinar said that there's an even bigger stimulus package being worked on in Congress for the upcoming months that has even more protections for independent contractors, so there may be even more money in the pot for the next round. Keep that in mind. We need to keep our eyes peeled.
This is all I know and all I can provide at the moment. If I can get my hands on the paperwork, I'll try to post it up here. No promises, but this at least enlightens us and helps us to make educated, informed decisions.
Good luck.
Koffee
The SBA link floating around for the Economic Disaster relief is NOT the link we should be using. In that case, the loan must be personally guaranteed and paid back over 20- 30 years at 3.75% interest.
We are looking at the loan for the Paycheck Protection Program. It's exactly that- loans to cover your paycheck.
The link for the CARES loan will be a loan that is FORGIVEN, provided that ALL the money goes for what you stated in your application. It must be well-documented, because the government will want to see that. If there's any part of that loan you do NOT use, then you will repay it within 2 years at .5% interest.
The link for this CARES loan is not available yet. We need to check back regularly and take that document to the bank (if it's open, or else schedule a conference call with a banker) so they can help you determine what you can apply for and how much they will give you.
The best part of this is that if you are approved, then they will turn around and deposit this money into your account within 36 HOURS of the approval.
The loans will be first come, first serve. There is a limited amount available. They are allowing businesses to apply a week before independent contractors, so there will be even less money for us ICs to fight over. Do NOT HESITATE! Be ready with your tax documents to apply.
They will be basing your loan off your 1099s, so if you don't file a 1099 for your business, you might as well just go for the unemployment for ICs and call it a day.
As I stated in my title, independent contractors are allowed to apply after April 10th. So you really need to be applying on April 10th at 12:01 am. ;-)
Here's the sticky part that I think will be difficult for us. Many of us are not driving because of the virus. This program is to help us to continue being paid. You can't not drive and get the money. That's what unemployment is. How do we get around this?
My plan is to put on my app, but I'm going to stay in UberX mode. I will accept a trip if it comes across my app, but not move. I'm not going to be able to pick up unless I'm guaranteed that person is not going to have COVID-19. If they can't guarantee it, then the trip is cancelled. That means I'm still working, and I can show in my app that I've put in my 40 hours per week.
If you're part time, you can get the money, but you won't get much. It might make more sense to get the unemployment check. I'd look at both options.
To determine how much you can ask for, you have to look at a 2 month time period. I believe that 2 month time period is 2/20/19- 4/19/19. I think you can also use 2020 as well. I wasn't sure (I'll check), but I think they said 1/1/20- 3/1/20. That's easy. We can just go to our Uber partners website and look at the monthly breakdown to get that information.
Then you estimate out 2 1/2 months of earnings. So, for instance, if you made $4000 in the 2 month time frame at $2000/month, then you can estimate out your 2 1/2 months of earnings as $5000 total (2 months at $4000 plus 1/2 month at $1000= $5000). That will be what you can ask for.
You MUST pay your payroll for the two months. The other half month can go towards rent, utilities, insurance, and anything else that you think legally pertains to your business.
HERE'S THE IMPORTANT PART-----
THIS WILL BE A FORGIVEN LOAN IF YOU USE ALL OF THAT MONEY AS YOU SAID YOU WOULD
So, if you paid yourself your payroll, for instance, and then paid your rent, but you find you still have an extra $200, then you'll be forgiven $4800, but you'll owe the government $200. That will be paid back over 2 years at .5% interest.
We are forgiven the FULL amount if you use all the money for your payroll and the half month of "extras" you claim you have uses up the rest of that loan money.
Here's the catch- if you didn't make that much money, perhaps the SBA Economic Disaster relief money might work better for you. You have to kind of do the math and figure that stuff out. Because you can't just ask for any old money. You need to provide documentation when you apply for the CARES loan to see for what you qualify.
For some people, they may be better off getting unemployment money. For instance, if you're able to max out and get the $600 per week and end up with $2400 per month (but you have to pay taxes on that!!!! Factor that in!). Over 2 1/2 months, you'll get slightly more in unemployment than the scenario where you only got $5000 from the CARES loan. In that case, I'm going to stay home and collect the unemployment and call it a day.
Now, there is this thing called EIDL Grants, aka Economic Injury Disaster loans, through SBA. It provides up to $10,000 to small businesses. I know very little about that, except that it does NOT need to be repaid. You do need documentation for that, and they will ask for it when you go to the SBA website. Do not mistake that for the Economic disaster relief loans that need to be repaid at 3.5% interest over 20 years. I'm sorry- I have very little information to provide about that. I will see what research I can pull and perhaps do another big ass post on that. That might work in place of the CARES loan too. It really depends on how much you make and what works best to max out what you can get to keep yourselves going. Check into all these three options!
Finally (FINALLY), the attorney who gave the webinar said that there's an even bigger stimulus package being worked on in Congress for the upcoming months that has even more protections for independent contractors, so there may be even more money in the pot for the next round. Keep that in mind. We need to keep our eyes peeled.
This is all I know and all I can provide at the moment. If I can get my hands on the paperwork, I'll try to post it up here. No promises, but this at least enlightens us and helps us to make educated, informed decisions.
Good luck.
Koffee
