PPP Musicians (even freelancers) may now apply for loans (with Forgiveness)

To begin with, the PPP program was only available to businesses employing W2 workers. However, according to Algernon Ronson of Oak Park Financial, the Small Business Administration (SBA) has lately emphasized that this program is also available to self-employed individuals.

This is fantastic news for artists and other self-employed individuals, particularly after the suffering of the Pandemic Unemployment Assistance program was endured.

Because the PUA program required independent contractors and “gig workers” to file for unemployment benefits via the state even if they only had one W2 form, it was criticized (which most do from anything). 

Unemployment insurance benefits

Unemployment benefits are calculated solely on the basis of your W2 earnings! As an example, if you earned $50,000 in 1099s but only $500 in a single W2 contract (for example, performing on a film soundtrack or appearing in a television show), your unemployment insurance payment would be calculated on the basis of just $500. 

It’s a complete and utter farce. This is something that a lot of individuals have had difficulty with.

The good news is that, as a result of the new Flexibility Act, which was signed into law on June 5th, you may now be eligible for the Paycheck Protection Program.

According to Forbes, the Flexibility Act alters the PPP in a number of significant ways, including:

After June 5th, the loan maturity term was increased from two to five years for loans that were given after that date.

If both the borrower and the lender agree, the maturity date for loans provided before June 5th may be extended.

Eight weeks have been added to the debt forgiveness term, bringing it up to twenty-four weeks total. Borrowers who took out loans before June 5th, on the other hand, may still pick an 8-week payback schedule.

The Act decreased the amount of money that must be spent on payroll in order to qualify for forgiveness from 75 percent to 60 percent of the total amount of money spent. It has also been stated by the Small Business Administration that even if your payroll expenditures do not reach 60% of your total revenue, you may still be eligible for partial forgiveness.

To accommodate this, the Act extended the deadline for replacing full-time equivalent workers (FTEs) and restoring compensation from June 30, 2020 to December 31, 2020, from the previous deadline of June 30, 2020.

How to calculator debts?

To calculate your debt, you may use one of the following approaches:

For an 8-week covered period, eight weeks’ worth (8/52) of 2019 net profit (up to $15,385) is generated.

For a 24-week covered period, 2.5 months’ worth (2.5/12) of 2019 net profit (up to $20,833) may be earned.

The amount of your loan will be calculated at 2.5 times your typical monthly salary.

This seems to apply regardless of whether you file a Schedule C or F or own an S-Corp. All values are based on a salary of $100,000 per year.

It is possible to get your whole debt forgiven if you spend at least 60% of your loan money on income or salary. Please understand that you are not required to start a company or put yourself on the payroll. When it comes to filing your taxes, as long as you submit a Schedule C (or F), you should be OK.

It is necessary for you to provide this documents within eight weeks after getting the loan (but information on how or where to submit these records is not currently available)

Costs that are not paid on a paycheck, such as rent, mortgage, and utility bills, are examples of non-payroll expenses that may be forgiven with this loan. Whether you’ve been paying for a lockout rehearsal studio or have designated a portion of your home or apartment as an office or studio, you may include it in your loan amount.

Don’t wait till the second round of the PPP has finished to take advantage of the remaining $146 billion available!

This must still be accomplished via your local bank. According to what I’ve heard, the smaller the bank, the simpler it is to get PPP from them. You’ll need someone to walk you through this process, not an automated response from your bank.

Can you tell me about the application process for this position?

You may do this by visiting your local bank.

It’s time to cash in your winning ticket!