Professional coaches, writers, and consultants as well as each of their small business clients are likely to be eligible to receive PPP loans (up to 100% forgivable), EIDL loans (up to 100% forgivable) and/or Unemployment benefits if their income has been impacted by the pandemic.
Potential reasons for needing these may be as direct loss of income from clients, cancelled speaking engagements at conferences, the need to stay at home for home-schooled children or for any number of other reasons. Some applications may ask for specific reasons, but most don’t and instead ask you to check a box stating that you certify that you are being adversely financially impacted by the pandemic.
- PPP Loans
PPP loans are applied for directly with lenders. They require no personal guarantees, collateral, or credit checks. These should be begun as soon as possible if not already underway as funding will likely run out in the next day or two. Funds are to cover payroll and self-employment income lost and are calculated as 2.5 x the monthly payroll rate and must be used in 8 weeks for specific purposes.
Smaller banks have been allocated $60B of the 2nd round of PPP funds so it may be worth looking at them if your own bank isn’t accepting applications or if you’d just like to look elsewhere for processing the funding.
- EIDL Loans
EIDL loans are applied for on the Small Business Administration website. The amount is up to $10k but is essentially $1k per employee. It can be used for expenses not covered by the PPP or for a different time period.
- Unemployment Benefits
Unemployment Benefits (link is for Arizona) are applied for through the state’s unemployment site. If not traditionally covered through employers, individuals likely qualify under the Pandemic Unemployment Assistance (PUA). Up to 39 weeks of benefits can be awarded. Arizona says that PUA will begin paying on May 12th and it would be retroactive to the filing date. You will file weekly unemployment claim forms online but do not have to declare that you are looking for work or provide proof that you are.
- All Available but not Concurrent
Each person can use all 3 of these of these programs, they just cannot use them concurrently for the same purpose.
- Both PPP and Unemployment applied for
If unemployment benefits are filed for and PPP funding is received, you’d report in that week’s claim that you had income and would do that for the 8 weeks of PPP coverage. When those funds are exhausted, if you don’t have additional income at that time, you’d report no income in the following week(s)
- Video – PPP Loan Application Walk-Through
National Bank of Arizona has a YouTube video of their PPP application that may be helpful to check out. They are currently updating their website so it’s not linked there. It will likely have a few changes for this PPP round as there were some changes made to restrict funding of larger businesses.
*NB|AZ is where I applied for my PPP loan. If you’ve found my information helpful, you may list me, Tammy Farrell, as your Agent on the form. If funded, I may receive a small commission for the referral at no cost to you.
- Program Requirements
Each of these 3 relief programs have their own eligibility criteria. You’ll want to review them to determine if you meet their guidelines.
For example, many larger banks have imposed the additional requirement that you have an existing business or loan account with them. While it may not seem or be ‘fair’, they’ve done it to respect their existing customers and in an attempt to expedite processing applications. With a business account, you’re likely to have already provided them with your EIN and possibly your Articles of Organization if you’re an LLC.
Each program asks you questions where you will be self-declaring your eligibility for the program. While there has been controversy regarding it, due to the emergency state we’re under, the government has felt it was necessary in order to expedite the process.
With this, banks may or may not ask you for additional support for your payroll numbers, financial statements for prior years, and/or other documentation, you’re expected to be able to produce them if asked.
Hopefully there will be very few people who try and take advantage of these financial supplements if they’re not warranted, but I won’t be surprised if we continue to hear about outliers who take advantage of them when they have other means of raising funds.
- Documentation, Accuracy & Completeness
Your application will be able to get streamlined through the bank and unemployment agency’s process if you’ve made it as easy as possible for them to process.
This can be as simple as putting your drivers license copy (front and back) in color and on one page of a PDF whether or not it’s spelled out to do that. Highlight numbers for used in applications. Send a list of documents attached if it’d be helpful. You get the idea.
- Don’t Give Up
This isn’t the time to throw in the towel if you get frustrated or overwhelmed with it all. It’s understandable to feel that way and certainly take a break.
Come back at it and make yourself a checklist of what you need to do, the stuff you need to gather, and work your way through it. You’ve got this!
Need a Lender to Process your PPP application?
The National Bank of Arizona is accepting new customers from any state. They provided me with excellent service when processing my own PPP loan and I’m happy to recommend them.
*If links or information I’ve provided have been helpful to you and you choose to use NB|AZ, please feel free to list me as your Agent on the application. There is no cost to you but I would receive a small commission from the National Bank of Arizona if your PPP loan is funded. Thank you!