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PPP Loans for 1099 Independent Contractors

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PPP Loans for 1099 Independent Contractors

Can begin applying on April 10th, 2020

PPP Loans for 1099 Independent Contractors

(This page is about PPP loans for 1099-MISC Independent Contractors. For more information on PPP loans generally go here)

A Paycheck Protection Program (PPP) loan is part of the $2 trillion Coronavirus Aid, Relief, and Economic Security Act (CARES) Act, with $349 billion designated for PPP loans. Independent contractors receiving 1099-MISC forms and self-employed individuals are eligible to apply for these potentially 100% forgivable loans beginning on April 10, 2020.

The requirements are straightforward. You must have been in operation on February 15, 2020, your business must have been harmed by the COVID-19 pandemic, and you must submit the required documentation along with your loan application. 

Loan Details and Forgiveness

  • The maximum loan size is up to 2.5 times your average monthly 1099-MISC or net self-employment income for the past 12 months.
  • All amounts spent on the following list of items during the first 8 weeks of the loan term are 100% forgivable: (a) to replace your 1099-MISC income or your net self-employment income, (b) interest on mortgages, (c) business rent, and (d) business utilities. Note that if more than 25% of this amount is used for interest on mortgages, c business rent, and business utilities, not all of the amount spent may be forgivable.
  • The interest rate is  fixed at 1% and the loan term is 2 years.
  • Loan payments will also be deferred for six months.
  • No collateral or personal guarantees are required.
  • Neither the government nor lenders will charge small businesses any fees for the loans.
Eligibility for Self-Employed
  • Were in operation on February 15, 2020
  • They are an individual with self-employment income (independent contractor or sole proprietor)
  • Their principal place of residence is in the U.S.
  • They filed or will file a Form 1040 Schedule C for 2019

What do I need to apply? Once you know what lender you will be applying with, you will need to complete the Paycheck Protection Program loan application and submit the application with the required documentation to an approved lender that is available to process your application by June 30, 2020. 

Documentation Needed

  • 2019 Form 1040 Schedule C, regardless of whether it has been filed or is yet to be filed. This is the ONLY document we can use to support the loan amount calculation.
  • 2019 IRS Form 1099-MISC detailing non-employee compensation received (box 7)
  • Business was in operation as of 2/15/2020
    • WITH NO EMPLOYEES - 2020 Invoice, bank statement, or book of record to establish they were in operation on or around 2/15/2020.
    • WITH EMPLOYEES – Payroll statement from pay period covering 2/15/20.

Where can I apply? You can apply with Regent Bank or another approved SBA Lender.  You can get details on the application process on our page at 

Any existing SBA lender and any federally insured depository institution, federally insured credit union, and Farm Credit System institution is eligible to make PPP loans. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. You should consult with your local lender as to whether it is participating. Visit for a list of SBA lenders. You do not need to use this site in order to apply.

Do I need to first look for other funds before applying to this program? No. The government is  waiving the usual SBA requirement that you try to obtain some or all of the loan funds from other sources.

How long will this program last? Although the program is open until June 30, 2020, the government is encouraging borrowers to apply as quickly as possible because there is a funding cap and lenders need time to process your loan.

How many loans can I take out under this program? Only one.

What can I use these loans for? You should use the proceeds from these loans on your:

  • Owner compensation replacement
  • Employee payroll costs whose principal place of residence is in the U.S.
  • Non-Payroll Expenses – For the below expenses to be a permissible use during the eight-week period, the applicant must have claimed or be entitled to claim a deduction for such expenses on their 2019  Form 1040 Schedule C. For example, if the business did not claim or is not entitled to claim utilities on 2019 1040 Sch. C, they cannot use the proceeds for utilities. Each of the below uses must have been incurred or in place prior to 2/15/20 to be eligible for forgiveness.
    • Mortgage interest payments on any business obligation for real or personal property (i.e. warehouse, auto used for business)
    • Business rent payments
    • Business utility payments
  • Refinance EIDL obtained between 1/31/20 and 4/3/20 that was used for payroll costs, less any EIDL advance up to $10,000
  • 75%+ must go for Payroll Costs for entire loan to be forgivable.   

How can I request loan forgiveness? You can submit a request to the lender that is servicing the loan. The request will include documents that verify the number of full-time equivalent employees and pay rates, as well as the payments on eligible mortgage, lease, and utility obligations. You must certify that the documents are true and that you used the forgiveness amount to keep employees and make eligible mortgage interest, rent, and utility payments. The lender must make a decision on the forgiveness within 60 days.

Can I pay my loan earlier than 2 years? Yes. There are no prepayment penalties or fees.

Do I need to pledge any collateral for these loans? No. No collateral is required.

Do I need to personally guarantee this loan? No. There is no personal guarantee requirement. (However, if the proceeds are used for fraudulent purposes, the U.S. government will pursue criminal charges against you.)

What do I need to certify? As part of your application, you need to certify in good faith that:

  • Current economic uncertainty makes the loan necessary to support your ongoing operations.
  • The funds will be used to retain workers and maintain payroll or to make mortgage, lease, and utility payments.
  • You have not and will not receive another loan under this program.
  • You will provide to the lender documentation that verifies the number of full-time equivalent employees on payroll and the dollar amounts of payroll costs, covered mortgage interest payments, covered rent payments, and covered utilities for the eight weeks after getting this loan.
  • Loan forgiveness will be provided for the sum of documented payroll costs, covered mortgage interest payments, covered rent payments, and covered utilities. Due to likely high subscription, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs.
  • All the information you provided in your application and in all supporting documents and forms is true and accurate. Knowingly making a false statement to get a loan under this program is punishable by law.
  • You acknowledge that the lender will calculate the eligible loan amount using the tax documents you submitted. You affirm that the tax documents are identical to those you submitted to the IRS. And you also understand, acknowledge, and agree that the lender can share the tax information with the SBA’s authorized representatives, including authorized representatives of the SBA Office of Inspector General, for the purpose of compliance with SBA Loan Program Requirements and all SBA reviews.

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