So far, the focus of the discussion about the Paycheck Protection Program loan has been on the typical business that has employees who receive paychecks. There is another group of people who are eligible to apply for a loan. These include
- Sole Proprietors who do not issue paychecks
- Independent Contractors
- Self-Employed Individuals
Many of you have not been following the discussion because you don’t think of yourselves as a business. The SBA and Treasury Department have always always included you in the regulations, however the details have been even more confusing than for the typical business. THAT SHOULD NOT STOP YOU FROM APPLYING (sorry for shouting, but you might miss out on some grant money if you don’t jump on it now).
In this video I review my recommendation for what records you should gather and how to complete the PPP application. And as with the other folks, you must line up a bank ASAP
The SBA finally came out with specific guidelines on how these folks calculate their annual payroll. The key document is the 2019 Schedule C, line 31 which shows the net profit. (Yes, we agree, this is not a fair reflection on your real net profit, but this is what they wrote in the guidelines). If you have not filed your 2019 tax return, then fill out a blank Schedule C with the numbers that you will use on your return.
You will also need your 1099s and your bank statement that shows activity on February 15, 2020.
This report by the US Chamber of Commerce summarizes the guidelines