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Resources Available for Self-employed individuals, Sole-proprietors, and Independent Contractors in the CARES Act
Chris Pierson • Sep 10, 2020
If Other Programs Have Not Worked For You This One Might
Self-employed individuals, sole proprietorships, independent contractors, and other small businesses are eligible to apply for Economic Injury Disaster Loans (EIDL). The funds are intended to support temporary loss of revenue businesses and self-employed individuals are experiencing due to COVID-19. The EIDL loan program caps out at $2 million, and although it is not forgivable, it may provide more flexibility than PPP in the types of expenses it covers, including a range of operating costs. The EIDL loan amount that can be requested is based on the amount of “economic injury” the applicant has sustained as a result of COVID-19. One can determine that “injury” (or loss) by comparing this year’s economic results to those in 2019. The interest rate on these loans is 3.75% for small businesses and 2.75% for nonprofits. You can take up to 30 years to repay your loan, with the first payment deferred for one year.
Similar to PPP, the applicant will need to submit the necessary documentation to establish eligibility, such as payroll processor records, payroll tax filings, Form 1099-MISC, or income and expenses from a sole proprietorship. Bank records will suffice if the borrower does not have other forms of documentation.
• Eligible small businesses, self-employed individuals, private-nonprofits, and agricultural businesses may apply for the EIDL here.
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