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Sole Proprietor Resource Guide

Funding and Aid Sources:

  • Pandemic Unemployment Assistance (PUA): Beginning May 1st, the Maine Department of Labor will begin accepting applications for PUA, which expands unemployment benefits to many groups previously ineligible, like independent contractors, self employed individuals, farmers, fishermen, gig economy workers, etc. You’ll find more details and how to apply in this DOL press release.
    • Updated 2:45pm on 5/1/2020 – see this Facebook post for more detailed instructions on the application process, or this Google doc for easy viewing.
    • PUA benefits start at $172/week for the self-employed and those who do not meet monetary eligibility for regular unemployment (calculated at 50% of the average weekly state unemployment benefit). If you are self-employed, once we are able to verify documented earnings, PUA benefits will be adjusted retroactively. The maximum benefit available under PUA is $445/week.
    • If you receive any unemployment, the Federal Pandemic Unemployment Compensation (FPUC) program provides an additional $600 / week through July 25, 2020
    • To expedite the benefits process, claimants are not required at this time to send the Department paper or electronic copies of documents showing their earnings. The Department will let claimants know later in May when these documents should be uploaded to finalize their claims.
    • These are the 6 steps that the DOL has outlined to get self-employed people efficiently signed up.
      • Create a ReEmployME account
      • Verify your email address in ReEmployME – click on the Benefit Maintenance menu and follow the instructions to receive a confirming email
      • Sign up for direct deposit – also through the Benefit Maintenance menu. This is faster than the debit card option
      • File your PUA claim – through the Unemployment Claim menu
      • File your weekly certification for any weeks after your loss of employment
      • Continue filing your weekly certification every week
    • IMPORTANT: If you receive unemployment, you cannot utilize the PPP simultaneously. However – you should still be able to get retroactive unemployment benefits for the weeks prior to PPP disbursement. It may take a phone call (or several) to get it straightened out, though.
    • There remain unanswered questions for this program. If you have more questions, get in touch with us and we’ll let you know as much as we can.
  • Paycheck Protection Program (PPP): As of April 27th, open to Sole Proprietors, Independent Contractors and Self-Employed Persons. The PPP is a loan that can be fully forgiven under specific conditions. You will need to apply for this through a bank. See if your bank is on the list of participating lenders by state.
    • At least 75% of the forgiven loan amount must go toward payroll. It can also go toward rent and utilities, but only up to 25% of the forgiven loan amount.
    • For more detailed information on funding programs included in the CARES Act (including PPP and EIDL Advance, see our CARES Act Explainer)
    • Regardless of whether you have filed a 2019 tax return with the IRS, you must provide the 2019 Form 1040 Schedule C with your PPP loan application.
    • In order to qualify for forgiveness, you will need to keep a consistent paper trail. If you do not pay yourself through payroll, keep records of direct deposits, checks, and transfers via bank statements.
  • Economic Injury Disaster Loan (EIDL) Emergency Advance: This program will grant you $1,000 per employee (including yourself) up to $10,000 that does not have to be repaid. As of April 28th the SBA is not accepting applications due to a lapse in funding, but funding is widely expected to become available soon, so keep checking back.
  • Finance Authority of Maine (FAME) COVID-19 Relief Consumer Loan Program: Provides no to low-interest consumer loans up to $5,000 for those who have experienced a reduction in income due to COVID-19. These loans are administered by your local bank or credit union, you will need to contact your bank to see if they participate.
  • Greater Portland Council of Governments (GPCOG) Rapid-Response Micro-Loan: For businesses that have not been able to secure aid through other means, like PPP or EIDL. Up to $10k per business, partially forgivable. More information here. Note: If your business is Portland-based, you should connect with the Portland grant and loan programs first (see below for more on those).
  • MaineStream Finance Business Booster Loan: Focuses particularly on sole proprietors and self-employed in Maine who may not have accessed PPP or EIDL. Up to $10k, partial payment coverage may be available. More info here.
  • City of Portland Microenterprise Grant Program for very small businesses with two or fewer employees. Applications are expected to open on May 19th. Background info here.
  • Maine Tourism Relief Fund: Created by the Maine Tourism Association and Poland Spring. One-time grants of $500 for individuals or $1,000 for businesses with fewer than 50 employees will be disbursed directly to the applicant following the review and confirmation of eligibility. Application period: Monday, May 4 – Friday, May 8. Applicants can be from any traditional tourism business or employee. Details here.
  • Economic Impact Payments (Stimulus Check) – You will get your payment faster if you have direct deposit set up. Paper checks could take weeks to months, according to current guidance. Go to https://www.irs.gov/coronavirus/get-my-payment to give deposit information.
  • Artist Relief Funds

 

For more information / additional resources:

Coastal Enterprises, Inc. (CEI): CEI provides business advising services directly and through the Maine Small Business Development Center (SBDC); they are the host organization for the SBDC in the Portland area. They have also compiled a list of COVID-19 resources for individuals and businesses. 

SCORE Portland Maine: SCORE provides free business advising and has also put together a helpful COVID-19 resources page.

 

Definitions:

Sole Proprietor: An individual who owns an unincorporated business by themselves. Is self employed or an independent contractor who files a Schedule C.

LLC – Do you file a Schedule C? If so, you are likely a sole proprietor. LLC is a legal shield known as a limited liability company. But, it is disregarded by the IRS if you file your taxes using a Schedule C and take owner draws rather than using a payroll service.

S-Corp – S-Corp files corporate taxes and receives payroll. 

Self-Employed – As a self-employed individual, one may be a sole proprietor with or without a LLC agreement. If you are a sole proprietor and electing S-Corp filing status with IRS, then you are a corporation as far as the IRS is concerned and an employee of your company (so sorta not self-employed).

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