The Small Business Administration (SBA) has recently announced updates to the Paycheck Protection Program (PPP) for independent contractors.

The PPP is a loan program designed to provide small businesses with financial relief during the COVID-19 pandemic. Independent contractors, who are self-employed individuals or small businesses with no employees, were initially eligible for PPP loans. However, due to issues with calculating loan amounts for independent contractors, many were not able to access the full amount they were entitled to.

To address this issue, the SBA has released new guidance that allows independent contractors to use gross income instead of net profits to calculate their loan amount. This means that independent contractors can now apply for a PPP loan based on their total income, rather than their income after deducting expenses.

This new calculation method is expected to increase the amount of money available to independent contractors and ensure that they receive the full amount of financial relief they are entitled to. Additionally, the SBA has also increased the amount of time that independent contractors have to spend the loan funds from eight to 24 weeks.

To be eligible for PPP loans, independent contractors must have been in business as of February 15th, 2020, and have filed a Schedule C with their 2019 tax return. They must also meet other eligibility criteria, such as having fewer than 500 employees and being able to demonstrate a significant decline in revenue due to the pandemic.

If you are an independent contractor and are interested in PPP loans, it is recommended that you consult with a financial advisor or accountant for guidance on how to apply and calculate the loan amount.

In summary, the SBA`s recent updates to the PPP program have provided much-needed relief to independent contractors who have been struggling during the pandemic. By allowing them to use gross income to calculate their loan amount and increasing the time to spend the loan funds, the SBA is helping to ensure that these small businesses survive and thrive during these challenging times.