Time is winding down. Unless Congress extends the deadline, the latest version of the Paycheck Protection Program will expire on March 31.
Can bloggers apply for the PPP? Does the Paycheck Protection Program make sense for podcasters, Youtubers and other content creators? If the following apply, you may qualify for PPP funding
- You earn money from your content
- You’ve been reporting that income on your taxes
- Your content business was established before February 15, 2019
- You certify that the pandemic has hurt your business
- You are not disqualified by other factors.
Don’t be psyched out by the “Paycheck protection program” name. A lot of self employed people think “paycheck” automatically rules them out.
The Paycheck Protection program is available for any business type. That includes independent contractors, self employed individuals, sole proprietors or any other way you want to put it.
In other words, if you earn from your blog, podcast, videos or other content, you qualify as a small business.
The Paycheck Protection Program in a nutshell.
Warning: I’m going to link to a number of articles here. These were written mainly with a focus on gig economy workers. However, most of what’s written also applies to those of us who are self employed content creators.
The Paycheck Protection Program was originally introduced with the CARES act early in 2020. It’s meant to keep peoples’ pay intact in spite of the pandemic. That pay includes earnings for self employed individuals.
A self employed blogger, podcaster, or content creator can borrow two and a half months worth of their income. That loan is fully forgivable.
Here’s how they calculate your eligibility. Take your annual income as reported on your Schedule C. Divide by 12 to get your monthly average. Multiply that by 2.5.
For example, if you received $12,000 in 2019 from monetizing your content, or for providing content for others, that comes out to $1,000 per month average. 2.5 times that is $2,500.
The latest version lets you use your 2019 or 2020 Schedule C numbers.
What is your income?
Originally they defined it as your profit. Profit is the money left over after you deduct your expenses. It’s the number on line 31 of your Schedule C. New rules introduced in early March 2021 changed that to gross receipts.
In other words, now you get funded based on your revenue. It’s based on all the money that comes in for affiliate revenue, sponsorships, advertising, influencer marketing income, commissions and any other money you receive because of your content. It’s no longer reduced because of your expenses (though your cost of goods sold does come into play here if you sell products).
How do you get the loan forgiven as a self employed individual?
By using it to pay yourself.
Essentially the formula for PPP loan forgiveness is the same thing as the formula for determining the loan in the first place.
The application for forgiveness is pretty simple. It boils down to calculating two and a half months worth of your income. Your tax documents are the proof of that income.
It’s a lot easier for us than it is for businesses who have employees.
Some who received the PPP in the past may qualify for a second round of PPP funding.
In the Stimulus program that passed late December 2020, Congress re-opened the Paycheck Protection Program. They also added an option to get a second draw if you already received one.
There was one major change that impacts self employed sole proprietors. To qualify for the second draw, you have to have had a loss of income in 2020 compared to 2019.
At least one quarter in 2020 had to be 25% lower income than the same quarter the year before. You can read more about qualification for second draw PPP funding and get a link to a calculator here.
Understanding the qualifications as they relate to bloggers, podcasters, and other content creators.
Here it is in a nutshell. If you were operating a business at the time the Pandemic hit, your business was hurt by the pandemic, and you are not disqualified, you are eligible for the Paycheck Protection Program.
Let’s look at those bullet points above. Most of them establish the part about being a business.
1. You earn money from your content
This one’s pretty simple.
The Paycheck Protection Program is meant to replace or guarantee continued income. It can’t do that if there was no income in the first place.
That income can come in a number of ways.
Maybe you received money for ads on your blog, videos or podcast. Perhaps you have a sponsor or you get payments for influencer marketing. Do you get commissions for an online store, or sell your own gear? Maybe you sell digital classes or e-Books or memberships.
I’ve probably just scratched the surface. The thing is, you’re running a business if you’re getting money because of your content.
As long as….
2. You’ve been reporting that income on your taxes
I had someone asking me what a Schedule C was and how could they get it so they can apply for PPP funding.
I was thinking, if you don’t know what a Schedule C is, you haven’t been reporting your income, have you? It probably wasn’t a good idea for him to go ahead and tell the government he’s been making money if he hasn’t been claiming it on his taxes.
This is a business loan and relief program. The primary evidence that you are running a business is your tax records. If your taxes show you had business income, that’s a strong case that you have a business.
This article is geared towards individual entrepreneurs and sole proprietors, especially those who pay their business taxes as part of their personal income taxes. That can include those who have created an LLC. I don’t really dive into how it works if you are taxed at a corporate level.
If you are a sole proprietor, self employed individual or even a single member LLC, your business income and expenses will be reported on a form called Schedule C.
If you have not filed a Schedule C, it’s going to be hard to convince the SBA you are running a business.
3. Your content business was established before February 15, 2019
Remember that this is a program to help existing businesses who were hurt by the pandemic. That means you need to document that your business was in existence.
The SBA asks that you provide a 2019 Schedule C. If you had business income in 2019 that’s pretty good proof you were in business before February 15, 2020.
As mentioned earlier, you can base your loan off of either 2019 or 2020 earnings. However, the SBA stipulates the following if you use your 2020 Schedule C:
If using 2020 to calculate loan amount, this is required regardless of whether you have filed a 2020 tax return with the IRS. You must provide a 2020 invoice, bank statement, or book of record to establish you were in operation on or around February 15, 2020Small Business Administration PPP rules dated January 6, 2021
In other words, you need evidence that shows you started your business by February 15.
I really couldn’t find any other definition beyond this rule on what they mean by “in operation.”
Showing that you had income for your content is a good first step. You need proof of that income. A bank record and documentation of what that income was for (maybe a copy of your agreement) helps.
What if you started before February but didn’t start getting income until later? Would your expenses related to the business be enough to show you were in operation?
I couldn’t find a definitive answer to that. I would say that the better your record keeping and the better your documentation, the better your chances.
If you established a bank account for business only prior to February 15, 2020, that might work. Signed agreements related to your business (especially if they relate to you getting money) might help. Government registration (such as an EIN or creating a tax account) could help.
I can’t make guarantees what they’ll accept. However, don’t be discouraged from applying. If you think you have good documentation to make your case, the worst thing that could happen is they say no.
4. You certify that the pandemic has hurt your business
If you’ve been doing great and weren’t impacted at all by this pandemic, this aid wasn’t meant for you.
If this is your first draw of the program, independent contractors are pretty much on their honor for that. Can you in good conscience say you were negatively impacted?
For example, my niche for my content focuses on gig delivery. The delivery business boomed because of the pandemic. Pay potential for contractors skyrocketed in some places. However, many took time off for safety reasons or because they or someone at home were at risk.
How did it impact content creators, bloggers and the like? For some, business took off because people had more time to consume content. But if you were a travel blogger, this virus may have practically killed your revenue.
There’s no hard and fast rule. Ultimately, it comes down to you.
If you are applying for the second round of funding, the government did add a qualifier. At least one quarter of 2020 had to be a minimum 25% loss compared to the same quarter in 2019. That’s pretty significant.
5. You are not disqualified by other factors.
This last one gets into all of the technical qualifications or disqualifications.
You are not eligible if you operate certain businesses. If you have certain felonies, you won’t be able to receive funds. If you were not a legal resident in the United States during the time you claim your business, that may get in the way of qualifying.
This screenshot is taken from Womply’s Fast Lane application. It asks you to certify that you can say no to each of the points above.
There were more restrictions. A felony record was an automatic disqualifier. If you were able to work in the US legally but had an ITIN (individual taxpayer identification number) instead of a social security number, you couldn’t apply. A default on student loans could keep you from receiving funds.
Fortunately, the same set of new rules that allowed you to receive more PPP aid opened the door for more people to apply.
Not sure if you are disqualified? The best answer is walk through the application and read all the questions carefully. If you don’t qualify, you’ll find out soon enough.
The SBA wants sole proprietors to apply. Bill Briggs, deputy associate administrator to the SBA, was on this video with the CEO of Womply strongly encouraging independent contractors, solo entrepreneurs and self employed individuals to apply. The theme of his message was pretty much don’t talk yourself out of applying. If you think you possibly qualify, apply.
Okay, so you qualify. What now?
Don’t wait. As I write this, there are only three weeks remaining (unless they extend the deadline, which literally takes an act of Congress).
And here’s the thing: The SBA has been backed up. The funds are still there, and more funds were added through the American Rescue Plan. The biggest challenge is if it can all get processed in time.
Where can bloggers, podcasters, freelancers and content creators apply for the Paycheck Protection Program?
PPP applications are processed through independent lenders. That probably includes your bank.
If you have a good working relationship with your bank, reach out to them. Find out if they can process your application quickly.
One option I would recommend is using Womply. I have used them myself. Womply is an agent that works with several lenders.
I ran into a situation with a lender that was so overwhelmed with applications that they couldn’t continue with my application. Womply was able to connect me with another lender who had me processed and paid within 72 hours.
Womply has now created a Fast Lane application that streamlines the process. Streamlining is important because of the time crunch. They take your information, get your Schedule C and set up the banking for your deposit, and then submit that all to the best lender for getting your application done at that moment.
You can see where I walk step by step through the Fast Lane application to get a feel for what it’s like. It’s an incredibly easy application compared to when I originally applied for the PPP. You can also read my step by step on applying for the PPP second draw if you’ve already received funding for the first draw of the Paycheck Protection Program.
You can also search for lenders directly. The main thing is, find someone who is able to take your application and get it submitted quickly.
What happens after you apply?
You’ll receive emails notifying you that your application has been received.
If there is additional documentation or information needed, you’ll be notified. Be ready to respond quickly.
If everything is approved, you’ll get a followup asking to sign your application. You may have to certify information further, verifying that you qualify. At that point you will likely have to submit photos of your identification and then you’ll electronically sign your agreement.
And then it’s a matter of waiting for the deposit.
Womply has suggested that it’s possible to apply for the first and second draw back to back. I’m skeptical, especially given the time frame. However if it’s your first time applying and you think you meet the loss of income qualification, it doesn’t hurt to give it a try.
If that happens, you’ll be funded the first time and then they’ll move forward on getting your 2nd draw application submitted. They’ll let you know when to apply and what steps to take.
We’ve been through a tough time. Things look to be getting better. I can’t tell you whether you should or shouldn’t apply. It’s your decision as to whether it’s the right or best move for your content business.
While things seem to be getting better, there’s still some uncertainty ahead. For a lot of us, content creation was just the ticket as a lot of people had more time to consume that content. But what happens as people start getting back out and about?
The PPP could be just the shot in the arm that you need.