The Paycheck Protection Program (PPP) was created by the U.S. government to help small businesses impacted by the COVID-19 pandemic. Independent contractors, or self-employed individuals, are also eligible for PPP loans, but there are certain criteria that they must meet.
To be eligible for a PPP loan as an independent contractor, you must have been in operation on February 15, 2020. You must also have filed a Form 1040 Schedule C for 2019, which is used for reporting self-employment income and expenses. Your net income from self-employment must also be less than $100,000 per year.
If you meet these criteria, you can apply for a PPP loan through a participating lender. The loan amount you may be eligible for is based on your average monthly net income from self-employment, up to a maximum of $20,833.
One key benefit of PPP loans is that they are forgivable if certain conditions are met. As an independent contractor, you must use the loan proceeds for eligible expenses such as payroll costs, rent, utilities, and mortgage interest, and at least 60% of the loan amount must be used for payroll costs. If you meet these requirements, you may be able to have the full amount of your loan forgiven.
It’s worth noting that the PPP program has been subject to changes and updates, so it’s important to stay informed of any updates from the Small Business Administration or your lender.
In conclusion, independent contractors are eligible for PPP loans if they meet certain criteria, including having filed a Form 1040 Schedule C for 2019 and having been in operation on February 15, 2020. If you’re an independent contractor looking for financial assistance during these uncertain times, a PPP loan may be worth considering.