Understand How Your Government Is Extending Financial Assistance At A Federal And State Level To The Self-Employed

The following post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga.

Federal and state government is working to support financial stability for the self-employed and independent workforce. We have mapped it out for you.

Among other initiatives, the Coronavirus Aid, Relief, and Economic Security (CARES) Act has been passed to support business owners, freelancers and the self-employed. Unpacking federal and state assistance can be a daunting task. The team at Self-Saver has outlined the key elements and next steps for you to get connected to the help you may need during this time.

Economic Injury Disaster Loan (EIDL) Emergency Advance

1. What is it?
   • The EIDL Emergency Advance from the SBA will provide $1,000 per employee (up to $10,000) of economic relief to businesses that are currently experiencing temporary difficulties. SBA has a timeline of 3-5 business days for disbursement of money.
2. Are you eligible?
   • You must have less than 500 employees, including sole proprietorships, independent contractors and self-employed persons. Individuals in all 50 states and U.S. territories may apply for the EIDL emergency grant.
3. The next step to complete your application. Make sure to have this information for the 12 months prior to Jan 31, 2020 for reference during your application process:
   • Gross Revenues
   • Cost of Goods Sold
   • Lost Rents (for rental property owners)
   • Cost of Operating Expenses (for nonprofits)
   • Other reimbursement you will receive (i.e. business interruption insurance)
   • Number of employees
   • Start your application here (NOTE: this is the same application as the EIDL Loan, but the Advance is at the end).
4. A few additional details to keep in mind:
   • This advance does not need to be repaid under any circumstance and may be used to keep you or any employees you may have on the payroll, pay for sick leave, meet increased production costs due to supply chain disruptions or pay business obligations such as debts, rent and mortgage payments.
   • If you are also applying for the Personal Paycheck Program (more below), then be sure to utilize EIDL Advance for separate reasons (you cannot use the PPP loan for the same reasons as your EIDL grant).
5. Need some extra help in the application process?
   • SBA has an overview that is updated daily in addition to contact information for their support center, both located here.

Economic Injury Disaster Loan

1. What is it?
   • The EIDL will provide between $25,000-$2 million of economic relief to businesses that are currently experiencing temporary difficulties. Unlike the cash grant (EIDL Advance) there is no loan forgiveness. Loan terms are capped at 4% interest and 20-years. Also of note, this is a first-come, first-served program. SBA has a timeline of twenty-one (21) days to review and 5 business days for disbursement of money.
2. Are you eligible?
   • You must have less than 500 employees, including sole proprietorships, independent contractors and self-employed persons. Individuals in all 50 states and U.S. territories may apply for the EIDL.
3. The next step to complete your application. Make sure to have this information for the 12 months prior to Jan 31, 2020 for reference during your application process:
   • Gross Revenues
   • Cost of Goods Sold
   • Lost Rents (for rental property owners)
   • Cost of Operating Expenses (for nonprofits)
   • Other reimbursement will receive (i.e. business interruption insurance)
   • Number of employees
4. Other details that will likely be requested by your loan processor (post-application):
   • SBA Loan Application (SBA Form 5 or 5C)
   • Personal Financial Statement (SBA Form 413)
   • Schedule of Liabilities (SBA Form 2202)
   • Tax Information Authorization (IRS Form 4506T)
5. Information that might be requested in addition to the SBA forms above:
   • Federal income tax returns (with schedules) for principals, general partners or managing member, and affiliates for 3 years
   • If the most recent Federal Income Tax Return has not been filed, a year-end profit-and-loss statement and balance sheet for that tax year
   • A current year-to-date profit-and-loss statement
   • Additional Filing Requirements (SBA Form 1368) providing monthly sales figures.
6. You may also be asked to prove your “payroll,” which as a Self-Saver user, means you’re in luck! Payroll costs consist of compensation to employees in the form of salary, wages, commissions or similar compensation; cash tips or the equivalent and needs to be tracked based on employer (and for self-employed, their own) record
7. Start your application here.

Paycheck Protection Program (PPP)

1. These loans are calculated to cover 8 weeks’ worth of business payroll expenses with 25% in addition for things like rent and utilities. If the money is used for those purposes, (with 75% of the cash being used for payroll) it will be forgiven.
2. Remember, you cannot use the PPP and EIDL financial assistance for the same expenses (e.g. you cannot pay for rent for your place of business using both PPP and EIDL funds). The application process for PPP and loan program is handled by your lender
3. Find your lender here to get started on the application.

Unemployment Benefits at the State Level

1. All self-employed workers and contractors or workers who cannot reach their place of work as a result of COVID-19 are eligible for unemployment benefits which are dispensed state by state.
2. Each state may also require different supporting documentation. Find your state and requirements on the Unemployment Benefits Finder sponsored by the Department of Labor.

Tap into the COVID-19 Business Resource Center from Hello Alice.

1. Our friends at Hello Alice have created the COVID-19 Business Resource Center through Business for All, a partnership with the National Chamber of Commerce and with the support of Verizon, Silicon Valley Bank and eBay Foundation to support small business owners, now offering $10,000 emergency grants through a fund for small business owners affected by this pandemic. Businesses that need relief are encouraged to complete the COVID-19 Business for All Emergency Grant application.
2. The COVID-19 Business Resource Center acts as a small business hub during the coronavirus pandemic. Businesses can access financial grants and loans, peer to peer support, resources specific to where they live from state and federal agencies, and guides on pivoting a small business, transitioning to sell online, and more during this challenging time.

Continue to file if you are anticipating a refund---and remember to withhold in order to support future tax filing and payment.

1. If you are counting on a refund, consider using free tax software like Self-Saver to submit early so that your refund will be available to you.
2. You may also be anticipating a direct cash payment of up to $1,200 for each adult ($2,400 for couples) as well as $500 for each child if you meet the income requirements. As you receive these checks, consider withholding what you can to support estimated quarterly tax payments this year to avoid any potential penalties.
3. Ultimately, the assistance you receive from the stimulus check will be “reconciled after the fact” with your 2020 earnings, meaning if you earn more or less this year, you may have to pay back some of the relief money or get a bigger rebate next year.

   Are you typically a non-filer? In order to submit a request for a stimulus check, use this tool.

   1. 1. The IRS launched a new tool to help non-filers register for “Economic Impact Payments” (also referred to as stimulus checks).
      2. This would include those receiving Veterans disability compensation, pension, survivor benefits from Veterans Affairs or your income level does not require you to file a tax return. If applicable to you, you would need to submit your information to the IRS to receive a stimulus check. Fill out your information here. 
      3. Photo by Austin Kehmeier on Unsplash
      4. The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.