Local Independent Contractors & Those Who Are Self-Employed Can Apply for a Paycheck Protection Loan
Beginning Friday, April 10th, independent contractors and people who are self-employed can apply for forgivable loans through the Paycheck Protection Program, otherwise known as the "PPP" (Triple P). This federally funded program is designed to help small businesses cover payroll and other expenses.
The term for the loan forgiveness is an eight-week period after the borrowing starts -- and requires that current employee and compensation levels are maintained during that time.
Ken Jernigan is a retired chief financial officer and is now a volunteer for the Cape Fear Chapter of SCORE, an organization that provides free business mentoring and education.
He breaks down the amount you’d receive if you’re self-employed:
"The amount of your PPP loan is based on two and a half times your monthly average payroll in 2019. So if you're the only employee, basically you get two and a half months for that, which is not going to be a huge amount, but every little bit helps."
And there’s something else to keep in mind -- when the first PPP application opened up last Friday, April 3rd, for small businesses, Jernigan says the program was swamped:
"Demand has been so great that a lot of the systems have broken down in terms of application. Also, we've heard that some of the large lenders are finished. They've gone through their allocation of it in a couple of days.”
If self-employed individuals want to take out a PPP loan beyond the eight weeks, it’s a fixed interest rate of 1% -- and it comes due in 2 years.
You can find the PPP application here.