Did you ever come to Indy Hall on a First Friday? If you’re like me, it probably feels like a lifetime ago! Hopefully, you and your loved ones are safe and healthy.
We skipped April’s First Friday “Open Hall” as we had just closed our coworking space in response to the virus. In the last few weeks, a LOT has changed, but thankfully the things that have always made Indy Hall tick haven’t gone away.
We’re still staying connected to each other and supporting one another, maybe even more in some ways. Our members continue to find new ways to lift each other up.
But we miss meeting new friends (like you!)
Open Hall was our monthly opportunity to invite members and friends to spend some or all of their day together. It was a mix of the “shared energy” of working in a cafe or other shared space, but with a bit of extra structure to help people connect.
And honestly, we’ve been a bit stumped on how to fit that piece into the online puzzle.
So we are going to try something new, and you’re invited!
This Friday, May 1st we’re hosting our first-ever “Open Hall @ Home.”
We’re experimenting with a blend of online tools and ways to come together to work and connect. If all goes well, it will let us share the best parts of our community’s online experience for a special day.
We may not be able to recreate everything we miss about Open Hall, but we are excited to see what we can do and create some new experiences, too!
💚 Guests: find more info and RSVP here. (We have limited spots available for guests, so please RSVP if you can make it!)
If you’re not paying SUPER close attention to the news you might have missed that last night congress approved another half-trillion dollars in coronavirus relief, with includes a pool to help the small businesses like ours who couldn’t get their PPP applications in before the money ran out.
They’re a local/regional bank that specifically wants to work with truly small businesses, including self-employed people like us, even if you don’t have an account with them.
Note, there are NO penalties or risks applying through multiple banks…you’ll can only be approved by one, but whoever gets there first “wins.”
The official dates for accessing the new funds aren’t live yet, but banks like Centric are “pre-processing” applications so that they’re ready to submit to SBA as soon as they are allowed to again.
I personally began the process with them 2 days ago (I wanted to make sure it was decent before I recommended it) and have already been getting MUCH more personal communication than from any of the previous attempts.
Still not sure what you need to apply?
You might also want to look at this PDF “information sheet” which outlines the latest details of the program. Nothing really new is in here from previous updates, it’s just written in some the plainest language I’ve seen (though it’s still vague in some cases especially around self employment – that’s systemic).
The big thing for YOU to know is on page two:
Payroll costs can include: For a sole proprietor or independent contractor: wages, commissions, income, or net earnings from self-employment, capped at $100,000 on an annualized basis for each employee.
My sources tell me that your best bet while working with centric is to pull together as MUCH of your 2019 finances as you possibly can to help demonstrate your average monthly income, even if you haven’t filed your 2019 taxes yet. That can include tax forms like client 1099s but also, bank statements, paid client invoices, whatever it is. Treat it like “building a case.” The banker at Centric you’re assigned to will have to figure out how to work with what you have.
But don’t lose focus on your business
Next Tuesday’s session will include a live demo of techniques you can use for “Online Client Prospecting“ that Rob from Folyo.me uses to power his job board for freelance designers and how to apply it to your business.
RSVP and details are here, including a chance to have him use YOUR business as an example by filling out a brief survey linked on the event page.
2. The application includes a qualifying survey to make sure that you’re self employed, but I’ve heard that many people who SHOULD be eligible are being told by this survey they are not.
For example, I’ve heard from multiple sources that anybody who has any w2 status for any period of 2019 is being incorrectly identified by the system and being told to use the standard unemployment system. And that’s just one of several bugs.
The good news is that this error appears to be temporary, so you might want to avoid frustration and try filling it out later when the site isn’t being crushed by applicants.
You might also try using your EIN (if you have one) instead of your social security number.
Update: someone recommended I try with my EIN instead and it’s letting me register! Still slow AF tho
Other people are reporting that they’re able to finish the initial application, but the final step is to “file a bi-weekly claim” and that form is currently not working.
3. If your claim is accepted, your payment will be a percentage of your provable past income (details on the page of what qualifies as proof), with a minimum of $195/week and a maximum of $572/week. In addition to those base payments, the Federal Pandemic
Unemployment Compensation Program (FPUC) adds an additional $600/week ON TOP which will likely be paid out in a separate payment from the standard claim.
Note that these payments will specifically be added to payments dated back to the week of April 4th, while standard unemployment bi-weekly claims will be allowed to be retroactively claimed to January 27th.
That said, the extra $600/week is a federal program, which the federal government can decide to end that at any time.
Additional Updates from Philly Legal Assistance
“While the Department was trying to get this application out quickly to help the thousands of people waiting for PUA benefits, it was not ready for primetime and has experience significant glitches. For example, the system is not letting through workers who have any W2 wages, it is telling them to go apply for regular UC. That is hugely problematic as a large portion of PUA applicants are those who had insufficient wage history for UC, or are mostly self-employed/IC/gig workers with minimal W2 income. The Department is aware of this problem and is working to fix it.
For now, tell those who have W2 wages to WAIT and apply for PUA once the problem is fixed. We will keep you updated and I believe the website above will be updated by DLI.
For workers who have been able to get through the application, there has been a lot of confusion with the questions. We also know some people have struggled to upload documentation.
In better news, our understanding from DLI is that they expect anyone not eligible for UC (with the exception of undocumented workers) to be eligible for PUA. Even workers who do not have a recent separation but are struggling to get back into the job market.
As soon as the application is functional, we will be encouraging everyone to apply.
Some things to note:
PUA eligibility is based on when someone lost their job, not when they applied for benefits (unlike regular UC). So they will not lose benefits if they need to wait a little longer to apply.
If someone cannot upload documentation or does not have it at this time, that is okay. Regulations allow applicants to provide documentation within 21 days (and there is a currently a request to extend it to 90 days).
If someone has no documentation of their earnings (like a cash worker), or had no earnings to report, they will automatically qualify for the lowest base rate of $195 per week.
Our understanding is the PUA system is spitting out a weekly benefit rate at the end that may not be accurate. We are waiting to hear back from the Department.
There are no PINs for PUA – the system has a username and password you must set up.
The PUA system is not yet set up for weekly filing. You read that correctly, PUA will have weekly claims filing (but you are also able to file biweekly without the claim going inactive, it will simply let you claim two weeks).
PUA will have a much more accessible and information heavy claimant portal, but it will take a few days after an application is processed for anyone to be able to see real information in the portal.
Additionally: PUA is NOT a limited pool of funds like the PPP loans. The only caveat is that I’ve heard the automatic $600 weekly bonus is only authorized in the CARES act through a specific date, like July.
Ultimately, if you want to avoid staring at a “loading” indicator forever, or the endless frustration of errors that don’t make any sense (and that might be outright wrong), my advice is to wait a few days for them to iron out the bugs.
I’ll keep this page updated with details that I hear, and expect that this portal will be fully operational very soon. Once it does, I hope this helps you find a bit of relief if you lost work or contracts in the last month, and buys you some time to get your solo business back on track.
I know I’m not alone. Every small business owner is grappling with some version of questions and confusion about the REAL and CURRENT situation with government relief for small businesses currently being impacted by COVID-19, and at some point, probably wanting to throw up.
On top of an already scary situation, the lack of communication and clarity means people don’t know what they can or should do.
So while I am NOT an expert, I’m going to try my best to relay what I’ve learned as of today.
As I learn more, I’ll keep this page updated.
SBA PPP loans will be available are now available for freelancers and self employed individuals.
Updated with new PPP rules on 4/13.
The PPP (or Payroll Protection Program) is a large part of the government package designed to help companies keep their people employed.
It’s technically a loan distributed through local banks, though a large % (up to 100%) of it is “forgivable” as long as you use the loan within the parameters of keeping people employed.
NB: The reason I was applying over the weekend is because Indy Hall’s small but mighty team is on payroll and keeping them paid through this is one of my top priorities.
But how does that help you if you’re self-employed?
As of Friday, April 10th, banks are now allow to have self-employed people apply for a PPP loan.
Just like the standard PPP loan, the intent is that this money is used to pay yourself…not to go out and buy a new Macbook. The rules are a bit more ambiguous about how this will be enforced compared to a standard PPP loan, but my advice is that you should keep a VERY clear paper trail of how the money comes in and is distributed.
The self-employed version of the PPP application is mostly the same except it uses your 2019 Net Profit to calculate an amount to cover paying yourself if you’ve lost work due to COVID-19.
From the reports I’ve heard, different banks are handling this differently so the best advice is to contact the bank where you already have a relationship.
The other advice I’ve heard repeatedly is that local community banks (rather than big national banks) are more friendly to freelancers and small businesses, so you may want to call or email a local bank as well.
The paperwork you will likely need in order before you apply
At this time (Thursday April 9th at 5:18pm), the self-employed edition of the PPP loan application will require the following documentation:
Full color images of the front and back of a government issued ID
Quarterly tax filings from 2019
All 1099-MISC reports for 2019
Income & Expense Reports for 2019
2019 IRS 1040 Schedule C
You may need to talk to your tax preparer to gather these documents.
If and when I get a more clearly defined list of necessary documentation, I will update that here.
Keep in mind that, as of today, zero PPP loans have actually been distributed.
While banks are accepting applications from businesses with active and historical payroll, the software that connects them to the government has been struggling to keep up with the onslaught.
As a result, to my knowledge, while some loans have been approved ZERO loans have actually been distributed to businesses of any size.
Meanwhile, banks arewere actively fucking people over by making up their own rules.
My favorite is the banks (notably Bank of America, but I’m sure there were others) who were only accepting applications from customers with business accounts or worse, credit cards/other loans.
Thankfully (as of Thursday, April 9th), it seems BofA has changed this policy but only after being publicly shamed and possibly slapped on the wrist by the SBA.
I totally understand servicing existing customers first, both strategically and from a security/compliance perspective. But requiring loan based accounts is somewhere between foolish and predatory.
Basically, if they can’t make money off you some other way, they’re not gonna help distribute the government relief. Cool cool cool.
This isn’t actively prohibited by law (I don’t think, but I’d welcome an expert commentary) but of course, the banks are the banks. History repeats itself, and rhymes. Thanks, banks. Don’t use BofA.
Mind you, you don’t HAVE to apply through your own bank. Some services like Lendio have nicely built portals that let you apply once, and then they (somehow) are distribute your application to banks who want to help.
But “experts” suggest that applying with a bank where you already have some kind of business relationship is the best way to avoid falling to the TOTAL back of the line (or in our case, the back of the back of the line).
But again, until they have an application for self-employed people, what the banks do right or wrong is mostly irrelevant to people like us.
There’s another loan that’s easier to apply for, but…
Technically, these loans are actual loans, though the interest rate is meant to be quite low. They’re only available for businesses under 500 employes, and are meant for things like payroll, rent, and other utility/expenses.
Technically, they are distributed later, though it’s unclear what later really means anymore. (More on that in a second)
And technically, the EIDL loan application does have a built in checkbox for self-employed people to apply!
Best of all, this application is fast and easy.
You should be able to fill this out with mostly info you know off the top of your head, except maybe your 2019 total revenue and Cost of Goods Sold (COGS). What the heck is COGS if you’re a freelancer?
Cost of goods sold (COGS) is the cost of acquiring or manufacturing the products that a company sells during a period, so the only costs included in the measure are those that are directly tied to the production of the products, including the cost of labor, materials, and manufacturing overhead.
So if you’re a freelancer and services is your primary source of income, your COGS is almost definitely zero. Check with your accountant.
Finally, on the EIDL loan, make sure you check the box on the last page to “be considered for a $10,000 advance”.
But don’t get too excited…
First, the EIDL loan isn’t 100% forgivable like the PPP one. Yes, it’s low interest but is intended to be paid back.
EXCEPT (and this is confusing) that $10,000 advance is supposed to be forgivable. I say supposed to be, because the rules keep changing!
Case in point, as of today, the SBA has finally started communicating about the distribution of EIDL loans (I applied for ours over a week ago, total radio silence since).
But all of the sudden today that $10,000 advance has been reduced to $1,000 per employee and of course, no clear indication what that means for self employed people.
At this point, I stand by my advice from a week ago. It’s smart to apply for anything you MIGHT qualify for, but don’t make plans based on money you hope to get from the government.
Spent a good chunk of today talking to folks about the government’s small biz support the consensus is that nobody (including folks at the city and state) ACTUALLY knows how any of it is going to work.
My advice is: apply, but keep your expectations low and make other plans.
This might blow your mind, but the CARES Act DOES have a provision to provide unemployment payments for self employed people for the first time ever. Wow!
But of course…there’s a catch. I bet you didn’t see that one coming.
What’s the catch? Well…unemployment is handled state by state. That means almost anything you find documented about the new unemployment rules is referencing the new federal law… but good luck finding ANY specific details to the state of Pennsylvania.
On top of that, while the PA unemployment site acknowledges that self employed people will be eligible for some kind of relief, they explicitly say NOT to apply through the standard portal and to wait for a new one with no clues about timeline. Just “check back soon.” Awesome right?
Maybe you’re luckier in your state? I’ve heard that New York State’s system is functional for self-employed people and is even distributing payments via check and direct deposit.
Meanwhile, wanna guess who has already had their PPP loans approved? Super wealthy people. Don’t be surprised, be mad.
What I’m trying to do about it.
I’m using every connection I have to try and get some kind of clarity from the state. My hope is that by saying “hey I represent a few thousand self employed people and can help you answer their questions instead of them clogging your inboxes” we get somewhere.
But the most common answer I’ve gotten from people pretty close to the top is: “I don’t know. Nobody does.”
So the good news is, if you were feeling clueless before reading this article, you’re not alone. The people in charge don’t know either.
I really wish I good news, or specific tips or hacks to share. But right now…it’s not great.
It’s pretty bad for a lot of businesses, including single-person businesses.
That said, this is just the state of things on Thursday April 9th. Everything is moving and changing daily, and you can be sure that I’ll be sharing anything I find/learn along the way.
I’m sharing these updates with the Philly Freelance email list, if you wanna get a short email any time I post updates, you can sign up for that.
But right now, I think our best bet is mutual support.
We should act as if nobody is coming to save us, and be pleasantly surprised if and when we are wrong.
That means finding ways to work together. Possibly creating small, local or regional lending networks.
It also means getting smart about our businesses and clear about what valuable services we can offer to the businesses who are still spending money (they do exist!), even if it’s a short term thing.
We’re working on resources to help with this through the Indy Hall and Philly Freelance communities as quickly as we can, so stay tuned for that.
Until then – stay safe, stay inside, and wash your damn hands.