Stop the PPP presses! Yes, writers can get a small business loan

For those who do the reporting, one application can lead to a welcome infusion of forgivable funding

Even the most sure-footed freelance journalists live an uncertain financial existence—one where even a sniffle sends a shiver through your carefully constructed house of cards. Your most lucrative client cuts ties without warning. Your gravy train turns into a rollercoaster. Bad quarterly tax estimates bite you in the butt come filing time.

Then along comes this little thing called COVID-19 and, as I like to say, you go from covering the news to being part of it. Your work pipeline seizes up and suddenly, you join millions of proprietors cast adrift. Too bad you don’t own a small business, or you could’ve landed one of those Paycheck Protection Program loans (PPP), right?

Sez who?

Yes, We the Freelance People can land a PPP loan. Trouble is, many self-employed writers don’t think they should even try for a number of reasons. Let’s dispel the myths and misunderstandings.

1) “I’m not a small business owner.”
On one level, that’s possibly a statement of low self-esteem more fit for a therapist than an accountant. As for your business status, many (though not all) freelancers file taxes as sole proprietors—thus making it easy to assume your work doesn’t constitute a business at all.

For the purposes of the PPP, however, things work differently. Here’s how: If you file a Schedule C for taxes as a sole proprietor then you’re automatically at the starting gate. Sure, you may not have a payroll per se, but the Small Business Administration has recognized for the purpose of this funding that yes, freelancers need love, too.

2) “They ran out of money.”
True, the first round of funds that went out April 3 ran out in days—and a ton of press ensued, much of it negative. But while many of us weren’t paying attention, another round hit the streets with much less fanfare on April 27—and as of a few weeks ago, $150 billion remained up for grabs, according to PYMNTS.com.

Why? For starters, the PPP program was no longer brand new and thus garnered much less media sizzle. Meanwhile …. business owners frustrated by dead ends in the first round gave up; others went bust waiting; still others turned to alternate funding sources via crowdfunding or benefit events.

3) “The PPP loans are a paperwork nightmare.”
Just typing the word “paperwork” makes me want to run for the Pepto bottle. And as I told the editor who gave me my first assignment as a personal finance columnist, “You want me to give financial advice when I can’t balance my checkbook?”

For those of us who shove receipts into bloated folders or scribble business notes on the same page as grocery lists, it’s plenty intimidating to know you’ll be asked to cough up financial information. But you know hard work for money: You’re a reporter.

So start here: This link will take you to Form 3058, the Rosetta Stone of the SBA’s PPP process. Is it intimidating? Better than letting that question clog your path, you may want to pull in a professional, such as an accountant or loan officer at your bank. But you can make plenty of headway on your own.

There’s also lots of great advice online to help freelancers get through this process. Among the pages I’ve pursued, this guide from Bench explains how PPP works for the self-employed, while this page walks you through the application steps.

4) “Loans are debt and debt is bad.”
As a rule yes. And if you’re a personal finance writer, you’ve probably done a ton of blogs about the subject. (Personally, I hope I never have to write another post about how skipping that one cuppa Starbucks every day can turn into a zillion dollars with compound interest.)

But in this case, PPP loans are forgivable—which means, among other things, that your sweetie will forgive you for taking one out once they learn how generous the terms are. The loans in essence are largely used to compensate for payroll, which is swapped out for net profit and referred to in PPP-speak as “owner compensation replacement.” Why they can’t just call it the “I’m In a Hole Fund” is baffling, but just because you hate jargon doesn’t mean that the federal government shares your common sense.

In sum: This means—lucky you—you can automatically get eight weeks of your net profit forgiven, without having to spend it on anything. The rest of the loan, so long as it goes towards your deductible expenses such as utilities, or even a portion of your mortgage, should also be forgivable if you keep good records.

Putting it all together: You’re far from alone

I stand guilty as charged of believing numbers 1-4 above, a crime that falls just short of believing everything Donald Trump tweets. That’s why writing pieces like this can be fun; I get to learn what it is I shoulda done in the first place.

In the end, you may feel as I do: that the COVID rallying cry of “We’re in this together” offers little salve for the writer who slugs it out solo every single day, in many cases for people they haven’t met or had a phone conversation with in years. You get to blog about everyone’s struggles at a time like this; far less frequently does some outlet offer you a voice for your own. I get it. I returned to the full-time freelance life in April after losing my job in the coronavirus quagmire, and it’s lonely business sitting the middle of your shattered fortress thinking, “Now what?”

Though the answer did not come simply, it came eventually: Pick up the pieces and build a platform. Which is what I’m trying to do here: to help answer questions, be a resource, build community and help others solve the very problems of career and livelihood I struggle with myself.

As a writer/editor/pun-ditz, I guess you can call this my platform. But not really. It takes you to make it sing, baby, sing. For only if you get use from it—encouragement, engagement, good information—will the words on this 2-D screen take on the crucial dimension of depth.

Questions? Hit me up at lou@qwoted.com