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I got approved for a PPP loan! I didn’t realize until last week that freelancers were eligible, so I’m sharing here in case you didn’t either... the deadline is 8/8, and a large chunk of the loan amount can be forgiven. Free money from the govt! Apply!
The PPP loan app process for freelancers is a little confusing, so in case figuring out how to apply is what’s been stopping you, here’s what I did:
(Note: this is all anecdotal and what worked for me, I am not an accountant, this might not all be the same for you, etc)
(Note: this is all anecdotal and what worked for me, I am not an accountant, this might not all be the same for you, etc)
The first challenge is finding a lender (most banks will only take applications from existing clients with *business* accounts. If you have one, go through your bank, but if you don’t, you need an “alternative lender”). I did some digging and ended up going w/ Kabbage, fwiw
Here’s a list of other alternative lenders that take applications from independent contractors: https://bit.ly/2WdehgU
(Note: a couple of these have stopped taking apps, but several still are, so just poke around a little)
(Note: a couple of these have stopped taking apps, but several still are, so just poke around a little)
Most of the application questions are pretty straightforward (as long as you have your 1040 schedule C from 2019), but a couple were tricky... here’s how I answered them:
I wasn’t sure (and still am not sure) whether it would matter if I selected Sole Proprietor, Independent Contractor, or Self-Employed... I went with Sole Proprietor bc that’s what it says at the top of the 1040 (and then Independent Contractor for the sub-category)
The average monthly payroll is the total from line 31 of your 1040 schedule C, divided by 12 (for freelancers, “payroll” is just the amount you made from freelancing)
Business inception date also confused me bc I don’t have an LLC or anything, so my business is just... me. So I just put Jan 1 of the first year in which I made a significant amount of my income from freelancing.
The NAICS code is the classification for what type of business you have, it’s listed on the 1040 on the top right, right under your SSN (for independent freelance writers/artists, it’s probably 711510)
Under documents, where it asks for something to verify your business was active as of 2/15/20 and lists things like incorporation papers, I was stumped, but customer service at Kabbage (after 5 tries to get them on the phone) told me to use any invoice I’d sent to a publication
I think that’s it for the actual application details, but one more tip I got from a fellow freelancer on here is to apply with multiple lenders, and withdraw your pending apps once one is approved (Kabbage was actually my back-up—the first place I tried, BlueVine, rejected me)
The process took less than a week total, incl a few days of research. 24 hours for initial approval, then I had to upload some addl documents and wait for those to be processed, etc. It was all finalized today, and I should have several thousand dollars in 5-10 days. WORTH IT.
Next comes applying for forgiveness—they’re not processing those apps yet, but it’s good to be prepared... freelancers are eligible to have 2 months worth of income (as determined by your average payroll number above) forgiven. Here’s some good info: https://bit.ly/2ATBoW6
PS I had to really shove down the part of myself that's been conditioned to never talk about money in order to write this thread—it was really uncomfortable to do, honestly! But I want my fellow freelancers to get this money, so here you go, my discomfort, a gift to you.
