Beauty Industry Update Regarding PPP Loans

IMAGE Studios Beauty Industry Updates

There’s a lot of news out there right now, and it can be overwhelming during these uncertain times. IMAGE Studios is sorting through the noise to help you understand what it means for you & your business.

More PPP funding expected: Apply to be first in line

The government is expected to pass a new stimulus package this week which includes an additional $310 billion for the Paycheck Protection Program (PPP), providing more sole proprietors, independent contractors, self-employed, and small businesses with the opportunity to receive the forgivable loan. With a high demand for PPP funds, it is likely that the additional funds will be distributed quickly. Many applications are already lined up to receive the next round of funding, so it is recommended that you apply as soon as possible to get your application in line. It’s highly recommended that you apply through your bank, as people with accounts get preferential treatment during this process.

What is the PPP?

PPP loans are part of the COVID-19 government stimulus program (CARES Act) and are made to help sole proprietors, independent contractors, self-employed, and small businesses cover payroll and other business expenses like rent and utilities. The original funds were quickly exhausted, and more are expected to be distributed soon. This includes payroll for yourself, even if you have 0 employees. When used for qualifying expenses, you may be eligible for a 100% forgiveness grant, meaning you wouldn’t need to pay it back if you meet their criteria (find more info here).

Am I eligible for the PPP if I don’t have any employees?

Yes, you can still apply for the PPP. Even if you’re a sole proprietor, independent contractor, or self-employed, and have no employees, you can apply. Your own net earnings count as qualifying payroll costs, which you can find on your 2019 Form 1040-C.

How do I prove my payroll costs?

Depending on your type of business, you can use your 2019 Form 940/941, 1040-C, K-1, tax returns or W-2 statements (if you issue them).

What To Do Now

Step 1: Gather Your Info

Here’s our complete list of business info you’ll need when it’s time to file the PPP application. When you access the application below, you’ll be walked through how to submit it.

  • Payroll records: you will need payroll tax forms (i.e. Forms 940 and/or 941) from January 1, 2019, to the most current filing. Note: You will need to be able to identify any employees paid over $100K. Sole proprietor or independent contractor? Get your 2019 1040 Schedule C too.
  • Tax returns: for the last two years. If you haven’t been in business that long, all tax returns you have.
  • 1099-Misc (if applicable): If you have filed form 1099-Misc and are counting contractor compensation as part of your average payroll, you will need to provide this form.
  • Copies of driver licenses: for business owners with ownership stakes of 20% or more
  • Voided check: from the account where the loan will be deposited.
  • 6months of bank statements: from your business accounts for the most recent six months of business.
  • PPP Worksheet: Download and fill out the PPP worksheet here. Watch this video for a step-by-step on how to fill it out.

Step 2: File Now

Apply now directly with your bank. Don’t delay. Even though funds have run out for PPP, it’s expected more money will continue to open up so it’s important to get your application in now to secure your position in the queue. If you do not have a banking relationship that you prefer to use, we recommend Cross River Bank.

Our partner, GlossGenius, is working with SBA approved Cross River Bank and they are continuing to accept applications ahead of the anticipated funding (even if you’ve never banked with them before). While they can’t commit to providing loans until the government approves the additional funding, it’s best to apply now so you’re first in line. Watch this video if you want help walking through the application and this video that will show you how to fill out the spreadsheet that is part of the application.

Please note: As of April 20, Cross River is still reviewing and accepting PPP applications, however, the funds allocated by the government for the PPP have run out. If additional funding is authorized, it may be helpful to apply now and get in line.

APPLY NOW

Step 3: Help Others 

There’s a lot going on, but thankfully there’s a lot of help. If you know other business owners struggling, please send this page to anyone you think should be applying for PPP.