When to Apply for a Paycheck Protection Loan

With the recent release of the CARES Act, you may be wondering when can you apply for a CARES Act loan. The Treasury Department has recently released additional guidance concerning when to apply for a paycheck protection plan loan. Beginning April 3, 2020, small businesses and sole proprietors may apply. Beginning April 10, 2020, independent contractors and self-employed individuals may apply. Keep in mind there is a limited pool of loan funds. Congress appropriated $349 billion for this purpose. That sounds like a lot, but there are a lot of eligible borrowers in the US. So review your books and your financial projections and make your application as soon as you can.

And yes, this Treasury guidance DOES beg the question, how do you distinguish a sole proprietor from a self-employed individual? Are Schedule C taxpayers considered sole proprietors, and S corporation shareholders and general partners considered self-employed? At this point I have not seen clear guidance on this point. I will update this post as soon as I do.

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