On March 27, 2020, the Coronavirus Aid, Relief and Economic Security (CARES) Act was signed into law. The economic relief plan extends unemployment options and provides billions of dollars to small businesses with specific provisions for freelancers, a category that many photographers fall under. Learn more about the CARES Act below and how to find out if you’re eligible for any assistance. Keep in mind that this is an evolving situation and we will continue to keep you updated here at AlphaUniverse.com.
See how the CARES Act might be able to provide you financial relief as a photographer.
Unemployment Under The CARES Act
Usually those who are self-employed, freelancers or contractors can’t apply for unemployment, but the bill creates a temporary Pandemic Unemployment Assistance program through the end of the year.
What Does The Temporary Program Do?
The program will allow those who in the past didn’t qualify to receive 50% of their state’s average benefits payout. This will be complemented by a $600 weekly payout from the federal government for up to four months through July 31. State-level unemployment insurance is extended by an additional 13 weeks, bringing most state benefits lasting 26 weeks to 39 weeks, through December 31, 2020. You can learn more about unemployment provisions in this document provided by the Senate's Committee On Finance.
Am I Eligible For Unemployment?
Not everyone who is self-employed will qualify for unemployment, but the new law greatly increases the chances that you do as a photographer. Each state has its own website that will help you determine your eligibility and apply. Find details on your state’s unemployment program here.
Small Business Loans Under The CARES Act
The CARES Act contains a Paycheck Protection Program Loan Guarantee, allocating $349 million for the U.S. Small Business Administration (SBA) to guarantee loans through its 7(a) loan program.
The CARES Act also allocates $10 billion for Economic Injury Disaster Loans (EIDLs). These loans have always been available in the event of a disaster, but this is the first time a pandemic has been declared as a disaster.
More On Small Business Loans & EIDLs
Small Business Loans: These loans can be up to 2.5x the average monthly payroll cost for your small business during the one-year period before the date the loan was made, with a limit of $10 million. If you weren’t in business in 2019, they will get the average from January and February of this year. The maximum interest rate for loans under the program is 4%, the term is up to 10 years and there’s no personal guarantee or collateral required. Payments for the loan are deferred up to six-12 months and part of the loan could be forgiven if it’s spent on operating costs in the first eight weeks.
EIDLs: The CARES Act brought expanded provisions to the already-existing EIDLs to help small businesses. These loans can now be approved by the SBA based only on credit score and you won’t be disqualified by a previous bankruptcy. EIDLs less than $200,000 can be approved without a personal guarantee or requirement of real estate as collateral. Approved applicants can receive $10,000 in emergency cash that will be forgiven if spent on certain obligations that can’t be met due to revenue loss like payroll and mortgage or lease payments.
Am I Eligible To Apply For A Loan?
Small Business Loans: These loans are through local lenders and offered to small businesses with less than 500 employees, specific types of businesses with less than 1,500 employees, 501(c)(3) non-profits with less than 500 workers and some 501(C)(19) veteran organization (if in operation before February 15, 2020). More importantly for many photographers – self-employed, freelancers, sole proprietors and gig workers are also eligible to apply for these loans, as long as you’ve been in operation since February 15.
You can apply for these loans directly through your local lending institution.
EIDLs: Since the pandemic has been declared a qualifying disaster, businesses in every state and territory are now eligible to apply for Economic Injury Disaster loans. Access to these loans has been expanded to sole proprietors or independent contractors, as well as tribal businesses, cooperatives, and ESOPs with fewer than 500 employees and all non-profits including 501(c)(6)s.
You can apply for an EIDL directly through the SBA at sba.gov.
You can also find more insight into what economic tools you might have at your disposal, such as loans, grants and filing for unemployment, as well as information about the virus itself in Sony Artisan Colby Brown's Photographer's Guide To Navigating The Pandemic.
This is an evolving situation containing exceptions, and further research may be required for your specific situation and options for loan forgiveness. Stay tuned to AlphaUniverse.com for more information as it becomes available.