How To Receive Stimulus Money

Covid virus

08/04/2020

By KEN DEROUCHIE // A message to my fellow independent musicians, independent entrepreneurs. It could help you receive stimulus funds and get you through the COVID-20 crisis safely.

PLEASE NOTE: THIS IS A VERY IMPORTANT MESSAGE FOR MY INDEPENDENT AND INDEPENDENT MUSICIANS. PLEASE TAKE SOME TIME TO READ THIS AS IT MAY HELP YOU RECEIVE MONEY FROM STIMULUS AND SAFEGUARD YOU THROUGH THE COVID-19 CRISIS.

Hi all, most of you are probably unaware that in my day to day work I am a practical analyst in a consulting firm. I also helped found and am currently the editor of a practice management magazine for physicians. I have spent the past 30 years working with physicians to teach them business and management in their private practices. That being said, I have done a lot of research over the past few days regarding the Paycheck Protection Program (PPP) which is part of the government’s stimulus package for small businesses.

On Friday April 3, the Small Business PPP application process opened. This meant that qualified companies were able to begin submitting their paycheck protection program applications. This program allows small businesses (less than 500 employees and having been in business before February 15, 2020) to receive a “loan” that will cover the payroll of all their staff for a period of 8 to 10 weeks. At least 75% of the total loan amount must be spent on staff payroll and you cannot fire anyone. If you’ve fired people before, rehire them and they’ll be covered and paid. These loans can also be used to cover rent, mortgage interest payments, and utilities.

While researching this information for my day job, I found out that on Friday April 10, this program will be open to independent contractors and self-employed people. As soon as I read this, a light came on in my head and I immediately thought of all my musician siblings who have lost their ability to make money while everything is at a standstill.

For those of you who are full time musicians, those who are 1099 musicians or conductors who have a tax identification number, this will apply DIRECTLY TO YOU!

Here is the deal, even though the PPP is a “loan” program, if you follow the rules of the loan, it will be canceled. This specifically means that YOU DO NOT HAVE TO REFUND IT. I repeat, THEY WILL PAY YOU FOR 10 WEEKS OF SALARY BASED ON YOUR AVERAGE 2019 EARNINGS AND YOU DON’T HAVE TO REFUND IT! Plus, you won’t have to pay taxes on the loan amount.

The information published by the treasure.gov the site specifically states:
The loan amounts will be canceled as long as:
– The loan proceeds are used to cover salary costs and most mortgage interest, rent and
utility costs during the 8 week period after the loan was granted; and
– The levels of employees and remuneration are maintained.

I will include links to specific information for all of you. I encourage you to download the information and follow the instructions. Read it for yourselves.

I spent most of my evening last night calling musician friends about this show and what to do. I emailed them this information and am extending my help on this if you need it. My boss at the consulting company I work for also offered to help.

First, download the PDF file on the Paycheck Protection Program (PPP) Information Sheet for Borrowers. This was obtained directly from treasure.gov website. I put it on my web server for easy access. You can download it here: http://kdband.net/…/PPP-I…/Treasury-Gov-PPP-info-april-2.pdf

Read this entire document to understand how it works. If you come across words that you don’t understand, look them up. You want to know this information.
Second, download the PPP loan application. The first 2 pages of this document are the actual request, the other 2 pages are information only, explaining what the sections of the request mean. You can download it here: http://kdband.net/…/Paycheck-Protection-Program-Application…

I will say this, the application process will be much easier if you already have a business checking account established with your bank. If you don’t, you will need to do additional work to be able to submit your PPP request.

Here is some great information from thefinancebuff.com:

Paycheque Protection Program (PPP)
The main purpose of the paycheck protection program is to cover the payroll. For a self-employed worker, the payroll includes payment for the services you perform. The PPP loan will be a two-year loan at an interest rate of 1%. Up to 100% of the PPP loan can be canceled.

The government manages this program through participating banks and credit unions. It’s probably easier if you go through the institution where you already have a business checking account. For my part, I do not have a professional current account, because I use the professional account of Fidelity Investments and Fidelity is not a bank. Many independent contractors only use a separate personal checking account, not an account officially referred to as a business checking account. In this case, you might have difficulty finding a bank that accepts your request.

For example, Bank of America first required that you have a business checking account and business loan relationship with them since February 15, 2020. Only account opening is no longer working now. After people protested, they now need a business checking account since February 15, 2020, and you don’t have a business credit card or business loan relationship elsewhere. This means that if you have a business credit card with Chase, Bank of America won’t take you; they want you to go to Chase. During this time, Chase requires that you have an active Chase Business checking account since February 15, 2020. If you have your business checking account with Bank of America and your business credit card with Chase, no bank is taking you.

What if you’re like me and you don’t have a business current account either, or the bank that has your business current account doesn’t take your request? If you go to the SBA website and find their district offices near you, you will see that each district office has a website. (https://www.sba.gov/local-assistance/find/…)

In the middle of each resource guide, there is a list of local SBA lenders in the district. For example, the listing for Northern California is on page 30 of the 52-page Resource Guide. Start calling and visiting the websites of these banks and see which bank will accept your application for the Paycheck Protection Program. Using my district’s Resource Guide, I found a local credit union that offers online P3 loan applications. I have completed and signed the online application. I have attached Schedule SE to our 2019 income tax return as proof of our payroll. If this credit union accepts my application, I would be happy to open accounts there.

After you find a bank that accepts your application (you can only apply through one bank), you will follow the bank’s procedures and provide them with the information and documents they ask for. The bank will determine how much it will lend you under the program.

Once you have taken out the loan and used it for an eligible purpose, you can apply for a loan forgiveness. The bank will determine the amount of the loan that will be canceled. It can be 100% of the loan amount, or it can be less. Right now, you need to find a bank first, file your application, and hope they process it soon. You worry about the loan being canceled later. No amount will be returned to you if you do not get the loan in the first place.

Source: https://thefinancebuff.com/covid19-loans-self-employed-appl…

Much love, health and happiness to each of you.

Ken

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