1099/Sole Proprietors & Covid-19

1099/Sole Proprietors & Covid-19

If you are looking for funding for your business / 1099 / sole proprietorship, CLICK HERE to visit the COVID-19 Page at SBA.GOV


We covered 4 key ways that you can get funding as an agent / ISO. Here they are with the specific links under each one.

#1 – Economic Injury Disaster Loan Advance (EIDL) Funding: Up to $10,000 Who Can Apply: If you are a 1099 Contractor, you can apply. If you are a sole proprietor, you can apply. If you are an ISO organized as any entity type, you can apply. If you are a W2 employee with a “side business”, you can apply. How to Apply: You apply directly on the SBA Website, use the link below to go directly to the application.

EIDL Advance Application

#2 – Payroll Protection Program (PPP) Funding: The lesser of $10,000,000 or 2.5x Average Monthly Payroll / 1099 Compensation (Watch the Replay Video for More Details) Up to 100% of this amount can be forgiven, meaning you never pay it back. One of our attendees was a 1099 merchant sales rep that made $96,000 last year. That means his average payroll expense is $8,000 per month. We multiplied that number by 2.5 and he is requesting $20,000 from the Payroll Protection Program. If he uses this money to pay office rent, utilities, and compensation, he can submit these expenses in 8 weeks and the entire $20,000 will be forgiven (as long as he follows the program guidelines). No program like this has ever existed in the US. Make sure you understand how it works! Who Can Apply: If you are a 1099 Contractor, you can apply. If you are an ISO organized as any entity type, you can apply. How to Apply: You apply through your local bank. There are other lenders who are qualified to offer this program, but the best way to get started is through your local bank. The button below will take you to the SBA page describing this program in detail.

If you want detailed info, CLICK HERE for the final ruling sent by the SBA to banks and lenders.

Payroll Protection Program

#3 – Unemployment Funding: State Maximum + $600 Per Week from CARES Act Who Can Apply: If you are a 1099 Contractor with reduced income, you can apply. If you are a W2 Employee that has reduced income, you can apply. How to Apply: You apply through your state’s unemployment program. More details will follow, stay in touch with your state unemployment program for updates.

#4 – Stimulus Check Funding: $1,200 per adult / $500 Per Child Who Can Apply: You do not need to apply. This program is run by the IRS and will be distributed by them, based on your most recent tax return. If you make less than $75,000 per year or $150,000 per couple, you qualify for the full amount. If you make more than this, your amount decreases. Click below to learn more on the IRS website.

IRS Webpage

There is tons of information out on the internet. Unfortunately, the guidelines are changing almost daily with changes be made. We will try to keep you informed of updates as we get them.

Important Update as of 4/6/2020 on the EIDL Advance. Long story short it is looking like $1,000 per employee up to $10,000 which means individual 1099 contractors are probably looking at closer to $1,000 than $10,000. The Payroll Protection Program still looks like a great option though. CLICK HERE for more info.

This question was asked:

As a 1099 person, can you file for both of these, the disaster loan and the PPP? As in, get the forgivable $1K from the loan and whatever you qualify for with the PPP? Or does the loan amount get deducted from the PPP amount?


You can file for both. The first $10k of the EIDL is waived. If you file for PPP, then the max 1099 comp you can claim is $100k. You can’t claim comp you pay others via 1099, only W2. So as 1099, you can max out PPP at $20,833. If you are a 1099 and make, say $500,000, and you employ two people at $40k, then you could claim $100k from your 1099 and then $80k in salaries. The total claim for PPP would be $37,500. Of course, you can add in the state and local taxes plus any 401k contributions you make and health care payments. The form and calc are pretty easy for PPP. And you can apply for both, but anything over $10k on EIDL is rolled into your PPP loan and basically refis EIDL into PPP. The first $10k on EIDL is forgiven.

We hope you find this information helpful. Please let us know if we can be of any additional assistance.

Stay safe!