This is an image of a self-employed individual doing research on how to obtain a Paycheck Protection loan.

Paycheck Protection Loans for Self-Employed Individuals


The Paycheck Protection Program, part of the new CARES stimulus package, is a federal loan program aimed at helping small businesses, including sole proprietors, independent contractors and eligible self-employed individuals, who have been severely impacted by COVID-19. The main objective of the loan is to help these businesses retain their workforce. As a self-employed individual, this program will provide funds to pay yourself.


Am I considered a self-employed individual?

Self-employed individuals are defined as:

  • Sole proprietors: You report income and pay taxes on a Schedule C in your personal tax return
  • Independent contractors: You collect 1099-MISC forms


How do I apply?

Sole proprietorships can apply starting April 3 through existing SBA lenders. Independent contractors and self-employed individuals can apply starting April 10 through existing SBA lenders. You have until June 30, 2020 to apply for the PPP, but we encourage you to apply with a qualified lender as soon as possible. There is a finite amount of funding available through the PPP and we do not know when the total amount of funds will be exhausted.

In order to apply for the PPP as a self-employed individual, you must prove you were in operation on February 15, 2020. You also must submit documentation to establish eligibility such as payroll processor records, payroll tax filings, Form 1099- MISC, or income and expenses from a sole proprietorship. For borrowers that do not have any of the above documents, your lender will request other supporting documentation, such as bank records, to demonstrate your qualifying payroll amount.

Payroll for sole props, self-employed and independent contractors is based on the sum of payments of any compensation to or income that is a wage, commission, income, net earnings from self-employment or similar compensation. To calculate the payroll expense, you can count your wages AND any amount of net income on the business up to $100,000 under the guidelines of the CARES Act. Your loan amount will be calculated by taking your average monthly payroll and multiplying it by 2 1/2.


Will Paycheck Protection Program loans be forgiven?

The terms of loan forgiveness are forthcoming from the Federal Government. We fully expect more detailed guidance prior to your actual forgiveness calculation. We’ll update information as we continue to receive guidance from the SBA and Treasury.


When will I receive my money?

You will receive payment shortly after your application has been approved. According to the latest guidance from the SBA, your bank must make the first disbursement of the PPP loan no later than 10 calendar days after the loan is approved.

For additional information about COVID-19 relief options and to access other helpful content, visit our small business resources page.