Finances and Taxes

The Top Financial Relief Resources for Self-Employed Individuals

Steve Strauss Best-selling author of the Small Business Bible 
Financial Resources for Self-Employed Business Owners - Gusto

We go by many names—solopreneurs, freelancers, independent contractors, micro-businesses, and of course, entrepreneurs and small business people. I even have a fun, content-rich, robust site for our community called TheSelfEmployed.com.

But whatever you call us, one thing is for certain, when the pandemic hit, we got the raw end of the deal, in many ways:

  • Many small businesses were the first to shutter. 
  • The first stage of Paycheck Protection Program (PPP) loans seemed to go to businesses that could hardly be classified as “small business.” The Los Angeles Lakers ($4.6 million)? Shake Shack ($10 million)? Ruth’s Chris Steakhouse ($20 million)?
  • Federal relief for small businesses concluded in August with nothing new on the horizon.

As such, small businesses needed—and still need—financial help, especially those small businesses that make up 80% of all business in this country—the one-to-five person business.

The good news is, help is finally on the way.

Here’s a great example: Dr. Seth Wallerstein is a sole practitioner dentist in Edison, New Jersey. Soon after the pandemic began, he was forced by edict to close his practice for more than two months, for everything except emergency dental care. The problem (among many) was that Wallerstein had a staff of seven. He was forced to furlough five team members immediately.

Wallerstein then applied for the first round of PPP funding, but, as he told Forbes.com, he was unable to get it as his loan request was less than $1 million. “As it turned out, the majority of the funding went to loans of over a million dollars. Small businesses that applied for less than $1 million were left in the cold,” he said.

But his luck changed in the second round of PPP funding, as legislators attempted to rectify many of the problems found in round one. Wallerstein was able to get a PPP loan of $103,000, which he used to pay rent and wages for those furloughed team members—all of whom have since come back to work. Wallerstein’s office now has a waiting list over two months long.

The moral of the story is that yes, there is help out there—if you know where to look and are persistent.

Here are your best options now:

SBA lending programs

As we have noted, the Small Business Administration (SBA)’s Paycheck Protection Program got a bad reputation from the start, and the time for applying for a round two loan like Wallerstein received passed on August 8. The prospects for any additional PPP funding also look grim. That’s the bad news. 

The good news is that the SBA has many other programs that you are likely eligible for. I just spoke this past week with Marcus Lemonis of CNBC’s The Profit, and he told me that there is a lot of SBA money available right now and that they are actively looking to lend it. So now is the time.

For example, the SBA has reopened its Economic Injury Disaster Loan (EIDL) program for small businesses and nonprofits who are currently experiencing a temporary loss of revenue. 

There are several other programs, including:

Unemployment assistance

Yes, state unemployment offices have been slowed by overwhelming need, and the path many people must take to get approved is long and arduous. But that said, the benefits provided by unemployment can be significant, and so it’s worth the effort. 

Even better: If you are self-employed, you are eligible for unemployment under the CARES Act. As the U.S. News and World Report states:

“The CARES Act allows states to extend unemployment insurance to independent contractors and others who are typically ineligible for the program. You may qualify if you’ve lost work and are not eligible for regular unemployment assistance.”

Why? Because even though a self-employed worker could not actually “fire” themselves, the law recognizes that in a disaster like this, self-employed people lose work, and assisting when that happens is the purpose of unemployment insurance.

Read more about the CARES Act and unemployment insurance on the Gusto blog. 

COVID-19 tax relief

The CARES Act does something else significant for micro business: Passed by Congress in March, it provided several different tax credits for small business owners and those who are self-employed. The employee retention credit, for example, is for employers whose businesses were suspended due to a shutdown order.

The credit is worth 50% of payrolls paid between March 12, 2020 and January 1, 2021, up to a maximum of $10,000. The Families First Coronavirus Response Act (FFCRA), also passed in March, provides employers refundable tax credits that reimburse them for the cost of providing paid sick wages to employees for leave related to COVID-19. This is true even if you are the only employee of your business.

Coronavirus relief grants and programs by industry

There are many grants and other funding available by industry. Look for relief funds set up for folks in your specific field. Here are a few programs to consider:

  • Freelancers:
    • Funds have been set up to help independent contractors and freelancers during this time. Look to the Freelancer’s Union Relief Fund, which offers financial assistance of up to $1,000 per freelance household to cover lost income due to COVID-19.
    • The Workers Lab – Workers Fund provides gig and lower-earning contract workers with emergency funds, particularly workers without access to employer-based benefits. 
  • Writers:
    • The American Society of Journalists and Authors’ Writers has created an Emergency Assistance Fund for those who are ill with COVID-19, or are caring for a family member or friend who has the virus.
    • The Carnegie Fund for Authors is also providing resources for the same. The Authors League Fund provides assistance for writers who are struggling to afford necessities and have experienced significant loss of income.
    • Additional emergency funds are available from Dramatists Guild Foundation for playwrights and other drama-focused writers. 
  • Musicians:
    • Sweet Relief offers funds for musicians and music industry workers for their medical expenses, lodging, clothing, food, and living expenses if they have been impacted due to loss of work.
    • The Equal Sound Corona Relief Fund provides funds for musicians who have lost income due to a cancelled gig as a result of the COVID.
  • Actors:
    • The Actor’s Fund has raised over $14 million dollars to provide relief for actors impacted by pandemic shutdowns.
    • The SAG-AFTRA COVID-19 Relief Fund provides relief for actors currently unable to pay their basic living expenses.
  • Comedians:
    • Comedy Gives Back provides relief for comedians who have lost gigs and income due to the coronavirus. To apply for one of their $500 grants, click here
  • 211:
    • If you need help finding food, paying bills, paying for housing or other essentials, call 211 or go to 211.org. It may not be available in your state, but it is worth a click or call to see.

And lastly, check your state for local grants and funds available. Many local funds have been set up for self-employed people in your area. You can also search for relief funds by state in Gusto’s COVID-19 Small Business Relief Finder.

Good luck. We can do this!

Get help with your PPP forgiveness needs.

Updated: September 23, 2020

Steve Strauss
Steve Strauss Steve Strauss is a lawyer, speaker, and USA Today small business columnist. He's the best-selling author of 17 books, including The Small Business Bible.

Comments

*Required fields

Your email address will not be published.

Back to top