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Job Loss and Understanding the CARES Act

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We’re in the midst of challenging times. With industries brought to a halt, social distancing guidelines in place and constant daily news updates, it’s hard to keep a handle on everything going on. 

I’m a freelance event manager, working in an industry that brings people together at live sporting events, charity galas, alumni parties and the like. The impact of the pandemic has been swift. My work is fueled by one-off and recurring contracts with clients. While 2020 had started out with an almost fully booked schedule, the calendar quickly cleared; cancellations and postponements have become the norm.

I own my own business, with me as my only employee, and I could feel the uncertainty creeping into my daily routine. I’m used to working gigs and moving on to the next, but what do you do when there are no jobs on the horizon?

I started to look at my finances to figure out a path forward so that I could jump back into my work when we’re all allowed to gather in one place. I read articles, listened to webinars and watched videos to learn about what I could and should do with my finances. While I was considering my options, the Coronavirus Aid, Relief and Economic Security (CARES) Act was signed into law March 27, 2020. The economic relief package, totaling over $2 trillion, was created to provide economic assistance for workers, families and small businesses. 

I dove into the CARES Act and other financial resources, and I’m sharing my story — and tips — in the hopes it will help others prepare themselves financially for the future.

Take a Look at Your Expenses

As my income dried up, I took a hard look at my expense reports from the previous few months to see what I could effectively “turn off” until events were back on. This was a great exercise, as in scrutinizing my bank statements, I found one or two subscriptions I totally forgot I had and canceled them. 

Washington state’s stay-at-home order actually helped with two of my bigger expenditures: travel and entertainment. Generally, I’m on the road two weeks of the month, but travel expenses are now down to $0 as are my entertainment costs, as sports, bars and gyms are closed. I was able to lower my costs as much as possible to cover the basics — rent, utilities, internet and groceries.

Call Your Credit Card Companies

If you have a balance on your credit card, call your credit card company to see if they’ll extend your payment deadline, waive late fees or decrease your interest rate. Many companies have programs to accommodate disasters like hurricanes and now COVID-19. USA Today has a useful article on which companies are offering relief

Track Your Economic Impact Payment 

This was one of the most talked about aspects of the CARES Act when it first passed because the clause affected the most Americans. According to the IRS website, you’re eligible for the payment if you’re a "U.S. citizen, permanent resident or qualifying resident alien,” are not claimed as a dependent on someone else’s tax return, and have a social security number. Adults are eligible for $1,200 if their gross income is less than $75,000. You can still qualify if you make over that amount, but the payment will be adjusted. Check out the IRS's Economic Impact Payment Information Center to understand what you qualify for.

According to the IRS, millions of Americans have already received their payments, including most of my family. If you haven’t received yours, the IRS has an online portal for checking the status. I’m still waiting on my payment. Up until recently, I had been receiving a “status not available” message when checking the IRS portal. From what I understand, it was most likely because the system hadn’t been updated with everyone’s data yet. The IRS has since updated the website to allow people to enter their bank information if they’ve filed taxes but never received tax refunds via direct deposit. I’ve added my bank information and have been alerted that the check is coming, though no date is specified. 

Apply for Paycheck Protection Program (PPP Loan)

Another initiative created by the CARES Act is the Small Business Administration (SBA)’s Paycheck Protection Program. The program expands the existing SBA loan programs and is meant to help small businesses with funds to cover two months of payroll; the funds can also be put toward rent and utilities. The assistance comes in the form of a loan, with the intention that any funds used for the proposed purpose (payroll, rent, utilities) will be forgiven, essentially making it a grant.

This funding is available to businesses with up to 500 employees; these businesses include myself, contract workers and gig employees. There are exceptions for businesses with larger workforces. See the SBA website for more information. 

According to the SBA website, you can apply through lenders already participating in the SBA’s primary small-business loan program or through any participating Farm Credit System institution or federally insured depository institution or credit union. Other regulated lenders are being vetted for inclusion in the program. The SBA advises business owners to check with their local lenders to see if they’re participating in the program, but you’re not limited to only applying with your existing bank or lender.

The PPP program originally launched April 3, but many small-business owners, including myself, found the process to be quite challenging. Most banks were not ready to accept applications on that day; others were only accepting applications from businesses that had an existing business account with them.

I missed my business bank’s deadline, as the bank opened its portal for only eight hours before closing it. I applied again April 16, but the program's funds had already run out. On April 24, another relief package was signed, with $320 billion earmarked for the PPP program.

I definitely suggest you apply if you qualify. I’ve applied to three different groups and am just waiting to see which makes it through first. The main documentation you’ll need is proof of payroll or income (1099-MISC forms, 2019 filed taxes or profit and loss statements). If you’re looking for lenders, you can search through the official SBA Lender Search. I also applied through two lendor marketplaces, Lendio and Boefly.

Apply for Economic Injury Disaster Loan (EIDL)

The CARES Act created this program to allow small-business owners to apply for business loans of up to $2 million and an advance on that loan of up to $10,000. The EIDL program is for any small business with fewer than 500 employees, including independent contractors, self-employed people and sole proprietorships, as well as nonprofits. Here’s where you can apply, though the Small Business Administration recently posted that it can’t accept new applications. I applied for this program when it was approved and still haven’t heard anything about my claim. If this is an option for you, I suggest checking the website frequently, as we’ve learned things can quickly change and the SBA might reopen the application process.

Unlike the PPP loan, this loan has no restrictions on what it can be used for. Businesses that apply and are eligible for the $10,000 advance on their larger loan may have that $10,000 given as a grant, which they don’t need to pay back. For the rest of the approved loan balance, the government is offering a very low interest rate, anywhere from 3% to 5%, and payment plans can reach up to 30 years.

Apply for State and Federal Unemployment Options

Another aspect of the CARES Act put aside $600 per week, per person for unemployment claims. This is an additional amount the federal government is giving on top of the weekly unemployment you collect from your state.

If you’re a full-time or part-time employee who’s lost work because of the pandemic, you can apply through your state’s traditional unemployment channels. Most states have recently opened up a separate system for the self-employed, contractors, and gig workers who in the past didn’t qualify for unemployment. For more information, the U.S. Department of Labor lists unemployment resources by state

Act Now and Document Your Process

Is your head spinning just a little bit? Mine has ever since I started exploring my options. My strategy has been to apply to everything and just wait to see what I get approved for. From what I understand, if you’re approved for the PPP loan, you can’t collect unemployment, but you can collect both the PPP loan and the EIDL loan. 

The biggest piece of advice I’ve heard over and over again is to apply now. No matter which option or combination is right for you and your business, the funding is limited and approvals are being granted on a rolling basis. The exception is unemployment. Most states are allowing backdating on your claims, so don’t worry if you’re not getting through online or through your state unemployment office. The important part is to keep trying and documenting your attempts, with screenshots, emails or other notes.

It’s a challenging time, but we’ll get through it, and hopefully, with a few of these financial aid options, you’ll be ready to hit the ground running when we’re able to get back to business.

Logan Clements

About Logan Clements

Logan Clements is a freelance event manager with a passion for people, to-do lists and problem-solving. Over the last six years, she’s worked with agencies, professional sports teams, brands, start-ups, nonprofits and individuals to create memorable events around the world, including in China and the U.S. She specializes in live sports and nonprofit events, working in multicultural and multilingual environments, and speaks Mandarin Chinese.

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