As we're all dealing with the effects of COVID-19 on our lives, I want to review the main aspects of the Cares Act and where to apply. As I'm sure you have heard, the government has approved the $2.2 trillion Coronavirus Aid, Relief and Economic Security (CARES) Act which will help millions of people in this critical time. Perhaps even you.
This sweeping legislation is unprecedented in the history of our nation and provides significant economic assistance to address the impact of COVID-19. The CARES Act is over 800 pages long, but here are some of the main economic provisions most relevant for you.
Stimulus
Individuals who had up to $75,000 in adjusted gross income (AGI) will recieve $1,200
Couples who had AGI up to $150,000 will recieve $2,400
Parents w/ children under the age of 17 receive $500 per qualified child
Individuals above thresholds will have payments reduced by $50 for every $1000 in income
Unemployment Insurance
States will still continue to pay unemployment to people who qualify. This bill adds $600 per week from the federal government on top of whatever base amount a worker receives from the state. That boosted payment will last for four months.
Pandemic Unemployment Assistance (PUA)
Typically, self-employed people, freelancers and contractors can't apply for unemployment. This bill creates a new, temporary Pandemic Unemployment Assistance program that provides unemployment coverage through the end of the year to freelancers and independent contractors and also provides an additional $600 per week for 4 months in addition to regular state benefits.
Please check to make sure PUA funds have been linked to EDD site before applying or your application may be delayed.
Check to see if PUA funds are available: HERE
Can self employed individuals apply: Yes
SBA Loans
Paycheck Protection Program (PPP)
The Small Business Administration has rolled out the Paycheck Protection Program applications and guidelines. This program is a $350 billion program to provide loans of up to $10 million per business. Certain portions of that loan will be forgiven used to maintain payroll, keep workers on the books, or pay for rent, mortgage and existing debt could be forgiven, provided workers stay employed through the end of June.
Meant for small businesses up to 500 employees, independent contractors and self employed individuals. Applications for small businesses started on April 3rd and April 10th for self employed/independent contractors.
Where you can Apply: You can apply through an SBA Lender or find one HERE.
What can you use the Loan For: Payroll costs, rent, mortgage interest, utilities over an eight week period. For sole self employed/independent contractors that means wages, commissions, income or earnings from self employment.
Do you have to pay the loan back: Maybe, maybe not.. If you use the money on payroll costs you should be okay. More info here.
How much can you borrow and what are the rates: Eligible companies can borrow up to $10 million which is calculated based on payroll records at a fixed interest rate of 1% for a two-year term.
Can self employed individuals apply: Yes
What if I don’t have a business checking account: Try applying through Kabbage HERE
Economic Injury Disaster Loan (EIDL)
The bill provides $10 billion for grants of up to $10,000 to provide emergency funds for small businesses and self employed individuals who qualify for the Economic Injury Disaster Loan to cover immediate operating costs.
Where you can Apply: You can apply through the SBA site HERE
Do you have to pay the loan back: Yes, but up to $10,000 may be forgivable.
How much can you borrow and what are the rates: Eligible applicants can borrow up to $2 million with rates up to 3.75%
Can self employed individuals apply: Yes