Contract investigators who are incorporated: You are eligible for PPP money

Many contact investigators were required over the last few years by their vendors (CACI, Keypoint, etc) to incorporate. I was one of them. It was a pain and cost me a few hundred dollars to incorporate as Redacted Company LLC. (That should have really been the corporate name I used!)

The vendor I work for issues a 1099-MISC to my LLC, not me by name. Really didn’t change much other than making my taxes more complicated.

HOWEVER: sole-proprietor LLCs are eligible for the latest pot of PPP money. I have not been paid yet but I know other sole proprietor LLC guys who have. My bank said my application looks good and will submit it today.

This is not a scam or an encouragement to cut corners. This is entirely legal and within the intent of the PPP. And certainly consult with your banker, tax professional, etc.

Maybe many of you already knew this - I did not until a few days ago. I am optimistic that the cash comes through – it will be a big help. ICs who are incorporated as LLCs should definitely check into this. Good luck.

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Is the money that you receive from the PPP considered a loan?

It is considered a loan, but most/all of it is forgivable if you use the funds for a permissible purpose - such as paying yourself.

For example, your PPP loan of $10,000 would be deposited into your business checking account for your LLC, VelcroTech LLC. You as the corporate entity VelcroTech LLC would then pay yourself (Mr John Smith) personally. That is entirely permissible and in concert with the intent of the PPP - paying people who are now not working.

I am not clear if just 75 percent of the loan can be used for payroll or all 100 percent. So to be cautious the wise thing to do is to pay yourself $937 per week for eight weeks, totaling $7,500. That leaves $2,500 untouched that you can use to pay back the unforgiven part of the loan.

The rules on PPP are changing every day - check with your banker, your tax preparer and your financial planner. But, yes, it is considered a loan, but as much as 75 and maybe 100 percent is forgivable.

The pot of money is running out, so call your banker - do not delay.

I am a grown adult and expect zero consideration from the large company that I am a contract investigator for. But it would have useful, even classy, for the company to e-mail out-of-work contractors – and advise them that as LLC owners they are eligible for PPP funds. Like I said, I expect zero consideration from the company and that is exactly what I got.

Call your banker!

PPP money came through on Friday. Around $8,500. Big relief at our house.

Again, call your banker!

I did mine through the PayPal loan builder website. Entire process took only 48 hours. Funds in my bank account on the second day.

BOOM. Well done, IntjM.

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Is incorporation as an LLC required? What about sole proprietors (IC) that do not have an LLC? Do we qualify as well?

I unfortunately do not know the answer to your question. My brick-and-mortar bank would not have lent to me unless I was an LLC; fortunately I was.

You might try the PayPal loan builder site or another less traditional financial provider. But at least call your bank first. While the overall rules come from the SBA, I think every bank/financial institution has different underwriting requirements.

As an IC, you should be eligible for the stimulus unemployment , $600 per week.

I agree Regina, you should be eligible as an IC. However, I live in a state where the unemployment system is a disaster. Many applications have fallen into a black hole. I was more optimistic that my PPP funds would be approved than my unemployment application would make it through the system.