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Latina Leaders share small business post-Covid recovery resources 

Latina leaders share post-Covid recovery resources for Latina and minority small business owners and entrepreneurs during virtual event.

Latina Small Business Post-Covid Recovery event recap 

During our March 19th virtual event, “Latina Small Business Post-Covid: Recovery Resources and Trends”, panelists shared various business recovery resources for Latina and minority entrepreneurs and business owners. 

The event ran from 12:00 pm to 2:00 pm EST and consisted of two panels of Latina Leaders and entrepreneurs and chats with guest speaker Damaris Diaz and Keynotes speaker Stacie de Armas. 

Speaking about the event President and CEO of Latinas in Business, Susana G Baumann, said, “After this very challenging year, it is important to regroup and think strategically about how to recover and protect our businesses and essential workers. I am very grateful for the response of these amazing Latina leaders that will provide the knowledge and resources needed for our community not only to survive, but to excel.”

The event’s first panel, Funding and Resources for Latina Small Business Recovery, featured guest speakers Jennifer Garcia, Christina Fuentes, and Wendy Garcia, who each provided a variety of resources for Latina and minority entrepreneurs and business owners. 

Panel 1 Guest Speakers: Jennifer Garcia, Wendy Garcia, and Christina Fuentes.

Funding Resources for Latina Small Business Recovery  

Jennifer Garcia, is the Interim CEO at Latino Business Action Network (LBAN). LBAN’s mission is to strengthen the United States by empowering Latino business owners to grow. Under her leadership, she oversaw four successful cohorts of the Stanford Latino Entrepreneurship Initiative Education (SLEI-Ed) Scaling Program empowering nearly 300 Latino and Latina entrepreneurs to complete this prestigious program. 

During the panel, Jennifer shared a variety of resources including information on the Stanford Latino Entrepreneurship Initiative Education Scaling Program. The program helps entrepreneurs develop a growth mindset to help take their business to the next level. Through the program, participants will join a powerful network of Latino entrepreneurs and will have an experienced mentor to challenge and support them while helping them apply the curriculum to their business. Participants will also learn about funding and capital options, financial management, and go through various exercises to prepare them for a conversation with capital providers. 

The program is currently accepting applications for their next cohort which begins May 5th, so Apply Now

Latina entrepreneurs and business owners can access additional resources from the Stanford Latino Entrepreneurship Initiative Research department. The goal of SLEI research is to understand the state of Latino entrepreneurship by analyzing data and shaping research in this field. The SLEI’s most recent report highlights the impact of Latino-owned employer businesses in the U.S. economy and compares their experiences to those of White-owned employer firms in the United States. 

The full report can be read here

You might be interested: Key Insights from the 2020 State of Latino Entrepreneurship Report 

Entrepreneurs interested in gaining additional resources and insights should also register for Latino Business Action Network’s (LBAN) upcoming FREE virtual 6-part series: Resources That Matter for Latinx Entrepreneurs During These Times of Uncertainty. The series will cover important topics such as economic market forecast, capital access, customer acquisition, resource building, and networking.

Christina Fuentes, Managing Director – Community Development within the Community Development Division at the New Jersey Economic Development Authority (NJEDA). Christina is responsible for developing, coordinating, and managing initiatives that support community development,  such as incentives and loans along with brownfield redevelopment, historic preservation, and small business services including traditional financing, technical assistance, partnering with Community Development Financial Institutions Fund’s (CDFI)  and COVID-19 recovery programs. 

Christina shared resources for NJ businesses impacted by Covid-19. For businesses looking for grants and PPE products, visit https://business.nj.gov/covid for the latest, up-to-date information. 

Additionally, NJ small business owners can visit NJEDA’s site  for resources such as low-cost financing options, lease incentives, industry specific programs, and more. 

For those looking to get assigned to a Small Business Services Liaison or with specific questions, contact smallbusinessservices@njeda.com

Wendy Garcia, is the Chief Diversity Officer at the Office of the NYC Comptroller Scott Stringer. Wendy Garcia is responsible for increasing contracting opportunities for Women and Minority-owned Business Enterprises (M/WBEs) and managing diversity related projects across all bureaus of the agency. She also leads the Comptroller’s Advisory Council on Economic Growth through Diversity and Inclusion – a group comprised of national, local, corporate, and government experts seeking to increase supplier diversity in the public and private sectors.

Wendy shared a plethora of resources available to entrepreneurs and business owners from the M/WBE University site. Comptroller’s M/WBE University is a series of workshops designed to increase access to the Comptroller’s Office and citywide opportunities for M/WBEs. Materials from all past classes are available for download at the site.

PDF of Resources for Small Businesses Owners & M/WBE’s Impacted by Covid-19 (click to download).

A National Conversation with Latina Leaders to address Latina Small Business recovery in Post-Covid19 economic crisis

National recognized speakers to share knowledge, resources and trends for growth at the “Latina Small Business Post-Covid Recovery: Resources and Trends” event, to give insight and support to the critical situation of millions of Latina businesses closing their doors due to the Post-Covid economic crisis.

National conversation with Latina Leaders, post-covid economic crisis, small business recovery

Latina small business post-Covid recovery, resources, and trends

Latinas in Business Inc is pleased to announce we are launching our second virtual National Conversation with Latina Leaders, gathering a stellar lineup of leaders, influencers and entrepreneurs from around the country at the “Latina Small Business Post-Covid: Recovery Resources and Trends” event. 

The event will take place Friday, March 19 from 12:00 pm to 2:00 pm EST – 9:00 am to 11:00 am PST on Zoom and Live streamed on Facebook. For free registration to this event visit Eventbrite. The event is open to all entrepreneurs regardless of gender, race, or ethnicity. 

“It is estimated that two-thirds of Latino-owned businesses will close their doors for good because of the crisis,” said Susana G Baumann, President & CEO, Latinas in Business Inc. “We want to make sure that we have a deep understanding of Latina and other minority women small business situations around the country, that our voices are heard, and that we bring solutions and perspectives to the national conversation,” she added.   

Stacie de Armas

Stacie de Armas, Senior Vice President of Inclusive Insights & Initiatives and Keynote Speaker. 

Stacie de Armas, Senior Vice President of Inclusive Insights & Initiatives and a leader within Nielsen’s Diversity, Equity & Inclusion practice, has been confirmed as Keynote speaker for the event. Through her knowledge and expertise in research and consumer behavior, she produces inclusive thought leadership and new research initiatives on diverse consumers and audiences. She is currently an active member of the Cultural Marketing Council Board of Directors, Google’s 21st Century Multicultural Marketing Council, and has received industry honors for her work in diversity marketing. 

Baumann states, “The new Administration Biden-Harris made a number of promises to be completed in their first 100 days. Among them were large-scale economic initiatives and the targeting of racial disparities. As we are a third way through, it is imperative that we discuss how these initiatives are being implemented and how there can be improvements. Clearly, we are in a crisis within a crisis. Our businesses are suffering, and therefore our families along with it. Sure, many of us have succumbed to the negative effects of the pandemic, but there is one thing I know for sure: as Latinas, if we fall, we rise back up!”

She continues, “We have heard the cries of help within our communities and we want them to know that we are here to help. It is our duty as leaders to extend a helping hand, not only sharing recovery trends and resources but also the support the community needs to come out of this crisis successfully. Please join us in this National Conversation where everybody is welcome to the table.”

Event Agenda

FRIDAY MARCH 19, 2021  – 12:00 pm to 2:00 pm EST 

12:00 pm to 2:00 pm EST- 9:00 am to 11:00 am PST

12:00 -12:05 Welcome by Susana Baumann, President & CEO, Latinas in Business

12:05 – 12:15 Opening Remarks

12:15 – 12:50 Panel 1. Funding and Resources for Latina Small Business Recovery

Context: Using February as a baseline, the analysts found that the sales of Latino-owned businesses dropped 42% in March and April and are down 21% during the 12-month period from Sept. 16, 2019 – Sept. 15, 2020. Even more troubling was the discovery that costs for Latino companies that applied for Paycheck Protection Program (PPP) funding have risen higher than their revenues in the ensuing months.

Facilitator: Pilar Avila, Latinas in Business Executive Board Member

12:50 – 1:05 Fireside Chat

Moderator: Susana G Baumann, Pres & CEO

1:05 – 1:45 Panel 2. Trends Impacting Growth in Post-COVID “New Normal”

Context: For small businesses across America, 2020 has been one of the most challenging years in history. Despite the coronavirus pandemic, small business owners have been resilient, pivoting, and adapting their business models to navigate continually changing conditions. We will discuss a few business trends that are likely to dominate in 2021, along with tips on how to position your business for growth.

Facilitator: Beth Marmolejos, Latinas in Business Executive Board Member

1:45 – 1:55 Keynote Speaker: Stacie de Armas

1:55 – 2:00 Closing Remarks

Be sure to register now at Eventbrite. You won’t want to miss it!

Immigrant mixed-households to receive stimulus checks

New stimulus checks are coming for jobless Americans. After months of negotiations, lawmakers struck a $900 billion COVID-19 stimulus deal. The new stimulus package was passed by the Senate earlier this week, just in time as nearly 12 million Americans are set to lose unemployment benefits the day after Christmas. 

People should start receiving their stimulus checks as early as next week. Checks will be sent via direct deposit for those with bank accounts.  In the spring, physical checks were mailed to Americans who didn’t have a bank account or for those the federal government didn’t have direct deposit information.

So what can we expect from the new stimulus package and who will be eligible to receive a stimulus check? Well, there have been some changes from the last stimulus package, one of the biggest being that mixed-status immigrant households will be eligible. 

Here’s what the stimulus package includes:

  • Americans who earned up to $75,000 in 2019 will receive a $600 direct payment. That is less than the $1,200 checks approved in the Coronavirus Aid, Relief and Economic Security Act in March. 
  • It provides $600 per child, up from $500 in the spring. The bill also includes $1,200 for couples making up to $150,000 a year.
  • The size of the benefit would be reduced for those earning more than $75,000, or $150,000 per married couple, similar to the last round of stimulus checks.
  • There is no cap on the number of children a household can claim, so a family of four would receive up to $2,400.

Who is eligible for stimulus checks:

  • For the first time, mixed-status households, or those where a family member doesn’t have a Social Security number, will be eligible to receive stimulus payments. This is a key change from the CARES Act.
  • Those without Social Security numbers, still aren’t eligible. But it would allow U.S. citizens who are married to foreign nationals without Social Security numbers to receive the aid.

You might be interested: COVID-19 Vaccination marks historic day in New Jersey

What else is included in the package?

The stimulus package will also include unemployment benefits will also extend all pandemic unemployment programs set to expire at the end of December by an additional 11-weeks through mid-March. 

The measure will also provide a federal unemployment benefit of $300 per week for up to 11 weeks. This however is less than the $600 previously provided under the CARES Act. 

Additionally, the stimulus package will include an extension of the small business Paycheck Protection Program, which expanded eligibility to local newspapers, broadcasters and nonprofits. It will direct another $20 billion to small business grants and $15 billion to live event venues.

Gov. Phil Murphy announces $100 million CARES Act funding for NJ small businesses affected by COVID-19

COVID-19 had hit small businesses the hardest, with many having to shut down for extended periods of time and severely limit their services leading to loss of revenue and financial hardship. Luckily relief is on the way for New Jersey small businesses as Gov. Murphy announces $100 million in additional CARES Act funding to support NJ residents and businesses affected by the COVID-19 pandemic.   

CARES Act funding to support NJ businesses

It’s no secret that COVID-19 has had a severe impact on the global economy. For months, businesses came to a screeching halt and for states like New Jersey, where small businesses are integral to the economy, local communities felt the economic blow hard. 

“Small businesses and the people they employ are the backbone of New Jersey’s economy, yet they have borne a disproportionate share of the burden of the COVID-19 pandemic,” said Governor Murphy. “If we are to emerge from this pandemic stronger and more resilient than we were before, it is incumbent on us to support them in any way possible. This additional funding helps us accomplish that goal.”

The additional aid comes as a relief to many NJ restaurant and small business owners who have struggled the most during this time. The bulk of the money, $70 million, will be distributed to restaurants, microbusinesses, and other small businesses through Phase 3 of the New Jersey Economic Development Authority (NJEDA) Small Business Emergency Assistance Grant Program. An additional $10 million will be used to help small businesses purchase Personal Protective Equipment (PPE) through the NJEDA Small and Micro Business PPE Access Program. 

Phase 3 of the Grant Program expands eligibility to any business with 50 or fewer full-time equivalent employees (FTEs) and increases the amount of funding businesses can receive. To ensure funds flow to businesses that need them most, Phase 3 includes set-asides for grants to restaurants and micro-businesses. $35 million will be dedicated to support businesses classified as “Food Services and Drinking Places” under NAICS code 722 and $15 million will be directed to support “micro-businesses” that have five or fewer employees. The remaining $20 million will be available to support any eligible business.

“I want to commend our state leaders for working together to get the federal coronavirus relief dollars we passed last spring into the hands of those who need it most,” said U.S. Senator Bob Menendez.  “This $100 million fund announced today by the Governor and our legislative leaders comes from the money we in Congress included in the CARES Act to help combat the economic fallout of this pandemic.  The federal money will help struggling New Jersey small businesses stay open, help them get the personal protective gear they need to keep employees and customers safe, and provide additional rental and food assistance to residents who need it most.”

In line with Governor Murphy’s commitment to a stronger, fairer recovery, one third of each of these pools will be directed to support entities that are located in census tracts that were eligible to be selected as a New Jersey Opportunity Zone.

 The Administration is also providing $10 million of additional CARES Act funding to support the Authority’s Small and Micro Business PPE Access Program. Launching in late October, this program will utilize an innovative public-private partnership model to enable businesses with 100 employees or fewer to receive grants in the form of automatic discounts on PPE purchased through NJEDA-approved “Designated Vendors”.

You might be interested: Additional Paycheck Protection Program Loan (PPP) calculation for small business

 “Supporting small businesses is vital to ensuring New Jersey’s economy withstands the immediate impacts of the COVID-19 pandemic and is well-positioned for a strong recovery. The Small Business Emergency Assistance Grant Program and the PPE Access Program are powerful tools that will help thousands of business owners and employees face the challenges the pandemic has created,” said NJEDA Chief Executive Officer Tim Sullivan. “Governor Murphy’s strong leadership throughout this outbreak and commitment to supporting these critical programs will provide immediate relief to the business owners and workers who need it most while continuing our progress toward a stronger, fairer recovery.”

Launched in early April, the Small Business Emergency Assistance Grant Program provides grants to small businesses impacted by the pandemic. To date, over 19,000 small businesses have benefited from the program.

Additional relief for renters and food banks 

The pandemic has also had a devastating impact on many vulnerable NJ families. To help protect them the Administration will also provide $15 million more in rent relief for New Jersey tenants through the DCA’s COVID-19 Emergency Rental Assistance Program. This program reduces the burden renters face by paying landlords directly for up to six months. The funding announced today will cover rent incurred from August 1, 2020 through December 30, 2020. Payments per household will depend on a variety of factors such as location, rental market, family size, and average per household income.  

“The additional support we are providing will extend relief to tenants so they can focus their limited resources on staying safe and secure,” said Lt. Governor Sheila Oliver, who serves as DCA Commissioner.

Photo by Joel Muniz on Unsplash

Lastly, $5 million will go toward supporting food banks and other hunger relief efforts. 

“The coronavirus outbreak has exacerbated existing hunger issues and has created new struggles for families who have lost jobs and wages,” said NJ Agriculture Secretary Douglas Fisher. 

The CARES Act funding will go toward helping New Jersey’s food banks, pantries, and soup kitchens expand their capacity for these continually increased demands so that they can help feed more NJ families in need.

Small Business Emergency Assistance Grant

NJEDA launches Small Business Emergency Assistance Grant Program Phase 2

Information for Phase 2 of the NJEDA Small Business Emergency Assistance Grant

NJED will award $45 million in federal CARES Act funding to small businesses. To ensure that funding goes to businesses and communities that need it most, $15 million of Phase 2 funding will be set aside to support qualified businesses located in one of the 715 census tracts that were eligible to be selected as a New Jersey Opportunity Zone. Additionally, all NAICS code restrictions from Phase 1 of the grant will be removed for Phase 2.

 

Your organization may use Phase 2 grant funding to

Reimburse revenue lost as a result of a business interruption caused by COVID19. Funding cannot be used for capital expenses, including construction.

Phase 2 Grant Award Amounts

Businesses will receive $1,000 per full-time employee, (based on WR-30 filing). Sole proprietorships or other companies with no full-time employees will receive the minimum grant amount ($1,000).

  • Minimum grant amount (per application): $1,000
  • Maximum grant amount (per application): $10,000 (for entities with more than 10 FTEs)
Your organization is eligible for a Phase 2 Emergency Relief Grant if…
  • You have 25 or fewer full-time employees, as reported on most recent WR-30 filing with the New Jersey Department of Labor
  • You have a physical commercial location in the State of New Jersey
  • Home-based businesses must be based at a home located in New Jersey
  • You are a non-profit organized as 501(c)(3), 501(c)(4), and 501(c)(7) organizations
  • Your CEO certifies that your business: 1) Was in operation on February 15, 2020; 2) Will make a best effort not to furlough or lay off any individuals from the time of application through six months after the end of the declared state of emergency; 3) Has been negatively impacted by the COVID-19 declared state of emergency on March 9, 2020; 4) Has a material financial need that cannot be overcome without the grant of emergency relief funds
  • Your Business: 1) Is registered to do business in the State of New Jersey; 2) Does not have any outstanding tax liabilities; 3) Is in good standing with the New Jersey Department of Labor

You can learn about other NJEDA programs and see what you may qualify for using the NJ COVID-19 Business Support Eligibility Wizard. Explore how how NJEDA determines grant size with the Grant Size Calculator or access a copy of the grant application. More information is available below on the grant scope, eligibility, and the materials required for application submissions.

Information from Phase 1 of Grant Funding

Businesses can access the full Notice of Funding Availability.

 

The Small Business Emergency Assistance Grant program will provide funding as efficiently and quickly as possible to SMEs that are in need. The focus of this round of funding is on the smallest enterprises in industries that are among the most adversely impacted by the COVID-19 containment measures.

The goal of the grants is to try to preserve the ability for SMEs to support and maintain a workforce during this containment period that is as close to pre-outbreak levels as possible.

The Small Business Emergency Assistance Grant Program will provide up to $5,000 to NJ-based SMEs that have between 1–10 full time equivalent employees (“FTE”). The grant funding is targeted as unrestricted payroll and working capital support, and cannot be used for any capital expenses, including construction.

Grant values are calculated at $1,000 per FTEs reported on business’ WR-30 filed with the New Jersey Department of Labor and Workforce Development.

  • Minimum grant amount (per application): $1,000
  • Maximum grant amount (per application): $5,000

Total available funding of up to $5 million of which $3 million of the program funds will be set aside for SMEs with 5 or fewer FTEs.

Small Business Emergency Assistance Grant

Your organization is eligible for the Small Business Emergency Assistance Loan Grant if you…
  • Have between 1 and 10 FTEs. This means companies non-employee companies (holding), companies that have between 1-10 FTE utilizing 1099 employees, and larger firms are not eligible for this round of grant funding.
  • Have a physical commercial location in the State of New Jersey. Home-based businesses are not eligible for this round of grant funding. A home-based business is a business operated out of a residential property where commercial activity is not zoned to take place.
  • Are classified in one of the following industries: Retail (NAICS codes starting with 44… or 45…); Accommodation & food services (NAICS codes starting with 72…); Arts, entertainment & recreation (NAICS codes starting with 71…); Other services(only those with NAICS codes starting with 811… and 812). You can look up your NAICS code at naics.com/search
  • Are registered to do business in the State of New Jersey.
  • Must certify that the company is in good tax standing with the State
  • Are in good standing with the Department of Labor and Workforce Development, with all decisions of good standing at the discretion of the Commissioner of the Department of Labor and Workforce Development.
  • The CEO of the business must certify that the business:

                1. Will make a best effort not to furlough or lay off any individuals from the time of application through six months after the end of the declared state of emergency. SMEs that have already furloughed or laid off workers must make a best-effort pledge to re-hire those workers as soon as possible. Any material breach of its best efforts certification may result in the NJEDA seeking repayment of the grant.

                2. Has been negatively impacted by the COVID-19 declared state of emergency in Executive Order 103 (e.g., has been temporarily shut down, has been required to reduce hours, has had at least a 20% drop in revenue, has been materially impacted by employees who cannot work due to the outbreak, or has a supply chain that has materially been disrupted and therefore slowed firm-level production).

                3. Has a material financial need that cannot be overcome without the grant of emergency relief funds at this time (e.g., does not have significant cash reserves that can support the SME during this period of economic disruption

  • Non-profit organizations are eligible for this program. Eligible non-profits must have status of 501(c)(3), 501(c)(4), 501(c)(7)
additional paycheck protection program

(Photo credit Kelly-Sikkema-unsplash)

Types of businesses not eligible:

  • Related to gambling or gaming activities
  • Related to the purveyance of “adult” (i.e., pornographic, lewd, prurient, obscene) activities, services, products or materials (including nude or semi-nude performances or the sale of sexual aids or devices)
  • Auction or bankruptcy or fire or “lost-our-lease” or “going-out-of-business” or similar sale
  • Traveling merchants
  • Christmas tree sales or other outdoor storage
  • Any other activity constituting a nuisance
  • Illegal under the laws of the State of New Jersey

No fees will be collected by the authority for this program and funding will be fully disbursed as quickly as possible upon approval of grant application.

In order to apply for the grant, businesses will need to provide the following…

Contact information for someone who is authorized to speak on behalf of your company. For example: an owner or an executive such as a CEO or Executive Director

Basic information about your company.

  1. Registered legal name and “Doing Business As” name. To confirm your organization’s registered legal name, visit Business Name Search.
  2. Federal Employer Identification Number (EIN)
  3. Year your company was established
  4. Full-time employees as of December 31, 2019 and Part-Time Employees as of December 31, 2019

Your organization’s industry as defined by your NAICS code. To confirm your NAICS code, check your federal tax filing or use this site to look up your NAICS code: naics.com/search.

Be able to answer the State’s basic debarment question. To see the full application and read the State debarment questions, you may access a copy of the loan application now,

Be able to affirmatively answer and/or certify that:

  1. You are not a home-based business. A home-based business is a business operated out of a residential property where commercial activity is not zoned to take place.
  2. You are not a prohibited business.
  3. You have been impacted by the COVID-19 outbreak.
  4. You have a material financial need that cannot be overcome without the grant funds.
  5. You will make a best effort not to lay off any additional employees and re-hire any whom you have already laid off.
  6. Information you are providing is correct.
  7. You will allow the NJEDA to check your entries against other State sources of data.

Updated: May 22, 2020
Source: NJEDA

PPP sole proprietor, forgiveness

How to request forgiveness for PPP sole proprietor

I got my PPP sole proprietor funding last week. How did I do it? I’m not a CPA or a lawyer, and I don’t give accounting or legal advice. This is just my experience, researching, asking my business advisors and the organizations that really represent and work with Latinas in Business Inc.

For sole proprietors and micro-businesses -also known as solo-preneurs-, the SBA subsidies and loans have been a frustrating experience.  Although we were allowed to apply for both the EIDL and the PPP (Paycheck Protection Program) loans, these programs have been designed with large employers in mind.

PPP sole proprietor, forgiveness

(Photo Credit: Sharon McCutcheon – Unsplash)

I reached out to some of our Latinas in Business members and many have given up on applying because they didn’t understand the guidelines, they were wrongly informed by other organizations -and they stayed with that opinion, which is never advisable- or they just didn’t want to “get another loan.”

For whatever reason you did not do it and now you have regrets, you are still on time to apply for the PPP sole proprietor funding  until June 30 -check with your local banks, some are still taking applications!

If there are enough people applying for this or other programs still available, Congress might consider a third round of subsidies for small business, yes, like us.

Keep in mind how to apply for PPP sole proprietor funding (in case of a 3rd round)
  1. If you have an established relationship with your banker -which you always should because they are the ones who take care of your business and the money you earn with so much hard work-, call your banker and ask them if they are still taking applications. If they are not, here’s a list of SBA approved lenders you can go to.

View a list of lenders participating in the Paycheck Protection Program by state as of May 5, 2020.

A shout out to Branch Manager at Investors Bank Jacqueline Sansone, who patiently guided me through the process!

PPP sole proprietor

Isahias Stanback, StedFast, and Jackeline Sansone, Branch Manager, Investors Bank at 2019 Latina SmallBiz Expo.

  1. Make sure you comply with one of these conditions:
    1. You are an independent contractor -you work for some company or companies as a consultant, freelancer or service provider and receive a 1099 at the end of the year.
    2. You are a small-business owner or sole proprietor -you work on your own, and do not receive a 1099 from anyone but your own annual sales (products or services) but you pay self-employment taxes. 
    3. You might be a combination of both -1099 and sales.
    4. You can work under an LLC (Limited Liability Company) as a legal structure and still be considered under these categories.

A shout out to my LegalShield lawyers for their advice on how to determine my eligibility. LegalShield is one of our affiliate marketing programs* and you can apply here to learn more, and start making some residual income right now! 

PPP sole proprietor, forgiveness

Our Affiliate Marketing Program LegalShield is a reputable organization that offers accesible legal protection for small businesses. (L from R) Tenille Ortiz, The Cupcake Factory, LegalShield Rep and Susana G Baumann, Latinas in Business Inc. at the 2019 Latina SmallBiz Expo.

  1. You DO file your taxes as a sole proprietor business and fill out a Form 1040 Schedule C. This is an important step to prove you really are self-employed, no matter in what category you apply on your tax return (sole proprietor, contractor/1099, or LLC if your single-member LLC is taxed as a sole proprietorship). If you are a corporation or S-corporation, and pay yourself a salary, you file a different set of forms.

No matter what SBA said about taking your 2018 tax return as a guidance, you REALLY need your 2019 tax return for your calculation, so file immediately! If you need help filing your taxes we recommend Turbo Tax.

A shout out to TurboTax for making the Self-Employed Tax Filing FREE and Intuit.com QuickBooks for Self-employed for only $1 a month!

  1. What you can include in your calculation:
    1. You take your income on 2019 Schedule C Income Line 31 – Net profit or (loss). Obviously you need net profit to prove you made money out of your business.
    2. Take that number and divide it by 12 -that would be your monthly net profit.
    3. Now multiply this new amount by 2.5.

Example: If your annual net profit was $30,000, your monthly net profit would be $2500, your PPP loan would be $6250. Easy peasy!

  1. Once you fill out your application with your bank, they will require certain documents -such as your 2019 Tax Return Schedule C and a couple of bank statements from your business account- that you would have to attach to prove the amount you are requesting. Remember this could be tax-free income and can be entirely forgiven if you spend the money according to the guidelines under the CARES Act.

You can download a copy of the PPP borrower application form to see the information that will be requested from you when you apply with a lender.

SBA information

Screenshot from SBA.gov website that shows first round of PPP disbursement.

What you can pay with your PPP sole proprietor funding to be forgiven

According to SBA guidelines, “The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll).”

So, let’s go one by one:

  1. Payroll: So at least 75% of your PPP must be used for payroll. If you don’t pay yourself a salary and you make payments straight out of your business account for your business expenses, make sure to:
    1. Keep track of personal expenses -if any- versus business expenses;
    2. Keep track of expenses that are not PPP forgivable -supplies, office expenses, car expenses, contractors and vendors, account payables, inventory supplies, etc.
    3. Another way would be to pay yourself at least 75% of that amount by check or transfer to a personal account but this is not an SBA guideline! These are just ways I found out from chat rooms and financial experts’ advice.

ALERT! There are no specific guidelines yet on self-employed or sole proprietors that do not take a salary on how the “forgiveness” must be proven, so keep that in mind and keep your records neat!

DO NOT TAKE THESE IDEAS AS LEGAL OR ACCOUNTING ADVICE, ALWAYS TALK TO YOUR BUSINESS ADVISORS BECAUSE EACH SITUATION IS DIFFERENT!

The rest of the PPP or 25% can be used as follows:

  1. Interest on mortgages: These are interest on mortgage obligations and loans for your business -for instance, you own your chiropractic practice building and you are paying a mortgage on it so your business property is collateral. You cannot include the interest of your house mortgage loan, at least so far, for your home-based business. These expenses qualify as long as these loans were incurred before February 15, 2020.
  2. Rent: Again there are no specific rules for self-employed solo-preneurs but let’s suppose you rent a store building, a workspace or you work in a commercial kitchen, you could pay those expenses with PPP funds from the moment you receive the money in your account over an 8 weeks period. Please document everything carefully! There are no guidelines yet on how to calculate home-based businesses in case you rent and work from home. More to come!
  3. Utilities: The same way, you can pay utilities for an 8-week period since you collect the funding. What is included in “utilities” we partially know, as the SBA guidelines describe phone, internet, gas, water, electricity, etc. What would be included in “etc.” is still a mystery but we believe cell phone bills might also be included. Keep your records straight!
Am I getting “forgiveness” fo my PPP Loan?
forgiveness

(Photo Credits: Felix Koutchinski – Unsplash)

Remember this is A LOAN. Your bank might consider forgiveness if you comply with the SBA Guidelines -and then SBA will repay the loan to your bank. However, they are the ones looking into the nitty gritty details to prove to the SBA that you had followed all the rules and your bank is ultimately responsible for how they see forgiveness or how they want you to prove forgiveness.

Your will have to request forgiveness at the end of the 8-week period for your banking institution to consider it. To maximize your forgiveness, it is mostly necessary that you keep excellent track of all expense information and have it available at the end of your 8-week period.

In case you do not receive forgiveness, loan payments will be deferred for six months, which means you don’t have to pay it back for the next 6 months, and then you will be making payments at 1% per year rate for 18 months. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees.

More guidance on both qualified expenses and forgiveness should be announced by SBA soon. In the meantime, this outline allows you to begin to spend on qualified expenses and properly track all your expenses.

PPP and Unemployment Insurance (UI) benefits

ALERT! According to The Federal Register, which is The Daily Journal of the United States Government, you cannot “double dip” receiving PPP and Unemployment Insurance benefits or Pandemic Unemployment Assistance (PUA), which comes from your state government.

In addition, you should be aware that participation in the PPP may affect your eligibility for state-administered unemployment compensation or unemployment assistance programs, including the programs authorized by Title II, Subtitle A of the CARES Act, or CARES Act Employee Retention Credits.

If you are not sure which program is better for you, think carefully which one will be more helpful for your business and your situation. If you are still doing business -food delivery, catering, essential services, etc.- it is advisable that you use a break with the PPP and get that help.

But if you think your business will be closed for a long time, UI or PUA might be the way to go for you. Again, seek advice from an CPA, tax advisor, or a lawyer to make your own decisions.

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Additional financial assistance resources

According to Business.NJ.gov, here’s a list of other federal financial assistance resources for self-employed and home-based businesses:

 

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