In this 4-minute read:
- Can beauticians apply for the PPP loan?
- Additional PPP loan eligibility requirements for beauticians
- Important updates to the PPP loans that could help beauticians receive more funding
- More helpful resources for beauticians applying for the PPP loan
In 2020, the Paycheck Protection Program was authorized under the CARES Act to help small businesses through the financial crisis resulting from the coronavirus pandemic. Millions of small business owners, non-profits, partnerships, independent contractors, sole proprietorships, and eligible self-employed individuals applied for and received funding through this program. For 2021, we have another round of funding this program during which applicants can get this vital stimulus funding again (or for the first time) until May 31, 2021 (the extended application deadline).
Beauticians like hair stylists, nail techs, cosmetologists, and others may well be qualified to receive this funding, and as of March 2021 there are some important updates to the program that may impact you in a positive way.
Gig workers, freelancers, sole proprietors, independent contractors, self-employed individuals and more are eligible for PPP loans. Check your eligibility with Womply in as little as 5 minutes, and you could receive up to $50,000 in forgivable PPP loans!
Can beauticians, stylists, cosmetologists, nail techs, aestheticians, etc. apply for the PPP loan?
Beauticians and similar can apply for PPP loans as long as their employment classification deems them as a small business owner, independent contractor, or self-employed individual. You’ll need to verify your employment status with the form that you report your income on during tax season—if you use a 1099-MISC and/or IRS Form 1040 Schedule C you likely qualify. These forms are also used to help you determine the max loan amount that you can apply for, since you can only receive loan funds based on 2.5 times your average monthly payroll costs or income. Read how to calculate your max PPP loan amount if you don’t have employees.
If you do not qualify as a self-employed individual or are an employee for a business and receive a W2 to report your income, then you don’t qualify for the PPP loan. However, the owner of the business you work for could apply in order to keep paychecks flowing for a short time (if needed).
Additional PPP loan eligibility requirements for beauticians and other independent contractors.
There are a few more requirements that you must meet if you wish to apply for the PPP loan. And these requirements differ depending on if you are applying to receive the PPP loan for the first or second time.
First draw PPP loan eligibility requirements include (this is not an all-inclusive list):
- Beyond having the right employment status, you must also have been in business as of February 15, 2020
For a more exhaustive list of first draw loan requirements, visit our First Draw PPP Eligibility FAQ.
Second draw PPP loan eligibility requirements:
- You already received a PPP loan
- You must spend your first PPP loan funds on approved expenses by the time you receive your second draw loan disbursement
- You must demonstrate that your revenue decreased by at least 25% in any quarter of 2020 when compared to 2019
- (You must have fewer than 300 employees)
For a more exhaustive list of second draw loan requirements, including special circumstances, visit our Second Draw Eligibility FAQ.
Important updates to the PPP loans that could help beauticians and other “Schedule C” applicants receive more funding
Some recent updates to the Paycheck Protection Program were made to give underserved businesses additional benefits and allow more businesses access to these vital funds. These benefits may provide great advantages to beauticians as they apply for their PPP loan as well.
- Previously, applicants with student loan delinquency could not apply for the PPP loan. This rule has changed so these business owners can now apply for the program
- The PPP loan was only available to U.S. citizens prior to these rule changes. Now non-citizen businesses who are lawful residents and have an ITIN can apply for the loans
- Most important: Applicants who report their income using IRS Form 1040 Schedule C can choose to use their GROSS (instead of net) profits to determine the maximum loan that they can receive. This can impact how much you are able to borrow depending on how you’ve previously reported your profits. For more information, read about the latest 1040 Schedule C/PPP loan rule changes. See the new PPP application form for Schedule C borrowers.
More helpful resources for beauticians applying for the PPP loan
Check out these additional resources to learn more about the Paycheck Protection Program and how it can help you in your beauty business.
- Can I get a PPP Loan if I’m an independent contractor? | PPP FAQ
- Can I get a Second Draw PPP if I’m a 1099 worker, etc.? | FAQ
- Tracking PPP expenses to maintain forgiveness (tools and tips!)
- 5 responses to your PPP loan application and what they mean (important tips!)
- Simplest PPP application for independent contractors, gig workers, etc? PPP Fast Lane is here!
Simplify the application process with PPP Fast Lane
Contractors, gig workers, sole proprietors, and eligible self-employed individuals can qualify for up to $50,000 in forgivable PPP loans for 2021! We built Fast Lane for you.
- Simple, five minute data collection process
- Guides you through every step along the way
- Automated first and second draw loan applications