PPP loans: can influencers, YouTubers, TikTokers, Twitch streamers qualify?

In this 6-minute read:

  • Can YouTubers, TikTokers, Twitch streamers, Instagrammers and other social media influencers get PPP loans?
  • Important 2021 PPP rules changes for Schedule C applicants
  • Additional eligibility requirements for first and second draw PPP loans
  • Follow these steps to calculate your maximum PPP loan amount
  • How can social media influencers spend their PPP loans?
  • Apply for PPP loan forgiveness

PPP loans for social media influencers, vloggers, YouTubers, TikTokers, etc. is a hot topic right now. There’s tons of debate out there as to whether or not social media influencers need or should be able to apply for the PPP loan. We’re not here to discuss the should or shouldn’t. We’re here to give you the facts and help you make an educated decision if you decide to apply for your PPP loans.

The fact is, we’ve all been impacted by the coronavirus pandemic. Some more so than others for sure, but the Paycheck Protection Program was created as a relief source to help businesses AND individuals during a time of uncertainty and financial crisis. 

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Can YouTubers, TikTokers, Twitch streamers, and other social media influencers get PPP loans?

The first thing anyone that wants to apply for the PPP loan needs to know is who is eligible to apply for the loan. The first eligibility requirement is that you must be a small business owner, sole proprietor, independent contractor, or another type of self-employed individual, and you must be able to verify your status as such with tax documentation. 

Most social media influencers, particularly those that get paid by brands to promote their products or services, generally work as independent contractors. Their work is contracted with the businesses they promote and they receive a 1099-NEC and file IRS Form 1040 Schedule C to report their income. That absolutely hits that first eligibility requirement. 

YouTubers, TikTokers, Twitch streamers, and other online video streamers generally receive a 1099 form if they made over $600 in a year. If you fall under that category and meet the minimum annual income requirement of $4800, you can apply to receive the PPP loan too. 

Read more about the $4800 annual income minimum for PPP loan qualification.

Important new PPP loan calculation for Schedule C borrowers

New PPP rule as of March 2021: On February 22, 2021, the Biden-Harris administration announced PPP rule changes that allow self-employed individuals filing IRS Form 1040 Schedule C to use their gross profits (instead of net profits) to calculate their maximum loan amount. This can help more people become eligible for the loan and provides the opportunity to get an even larger amount. 

Read more about the new 1040 Schedule C PPP calculation.

See the new PPP application and forgiveness forms.

Additional eligibility requirements for first and second draw PPP loans

Beyond having the right tax filings and employment status, there are some additional requirements that social media influencers (and all borrowers) must meet in order to continue in the application process. 

Currently, there are first and second draw PPP loans for which an individual or business can apply. First draw loans are for those who haven’t received a PPP loan and second draw loans are available for those who have received a PPP loan already. 

First draw PPP loan eligibility requirements:

  • You must have been in business as of February 15, 2020

Second draw PPP loan eligibility requirements:

  • You must have already received a PPP loan
  • You must have spent your first PPP loan funds on authorized expenses by the time your second draw loan is disbursed
  • You must be able to show at least a 25% revenue reduction when comparing any quarter in 2020 to 2019
  • (You must also have fewer than 300 employees)

Learn more about special circumstances regarding eligibility requirements with our FAQs:

Follow these steps to calculate your maximum PPP loan amount

You can’t apply for any loan amount that you want. These funds are limited and there’s a specific formula in place to calculate the maximum loan amount that any business or individual can apply for. 

Follow the steps below to calculate the max PPP loan you can receive if you don’t have employees:

  1. Get your 2019 or 2020 IRS Form 1040 Schedule C (you can choose which year to use). Find the number on line 7 for your gross profits OR line 31 for your net profits. Using your gross profits will generally get you a bigger loan, and this is also up to you to choose which one you use. Just be sure whichever number you choose doesn’t exceed $100,000, and if it does, reduce it to $100,000. 
  2. Take the number you got in Step 1 and divide it by 12 to calculate your average monthly profit/income. 
  3. Multiply your average monthly profit by 2.5 to get your maximum loan amount. 
  4. Optional: If you received an Economic Injury Disaster Loan in 2020, you can add any outstanding amount of that loan made between January 31, 2020 and April 3, 2020 to your maximum PPP loan amount from Step 3. Just don’t add the advance if you received one since that doesn’t have to be paid pack. 

If you have employees for your business (not independent contractors but W2 workers) then your calculation will look a little different. Follow the steps in this FAQ to find your max loan amount. 

How can social media influencers spend their PPP loans?

It’s really helpful to know what you can spend your PPP loan before you even apply (or shortly after) so that you can plan how you’ll use those funds in order to receive loan forgiveness. As a social media influencer, your expenses might look different from a brick-and-mortar business, so we’ve outlined what the approved expenses are for your PPP funds. 

Payroll/income

First, it’s important to know that at least 60% of your PPP loan must go towards payroll costs. If you have any employees, that portion of the loan has to be used to help maintain employees and their compensation levels (including your own). If you are your only employee, then you can use that 60% (up to 100%) to pay your own income. 

The other 40% can be used on the expenses outlined below. 

Mortgage, rent, utilities

You can use your PPP loans to help cover the mortgage, rent, or utilities that are related to your business. Maybe you rent or lease a studio that you operate out of. Or maybe part of your home is used for your streaming/office space. Whatever portion of your rent, mortgage, or utilities you can deduct on your business taxes, you can use your PPP loan to help cover. 

Interest payments on debts

Do you have any business credit cards or loans that were used to help keep your business going? Interest payments on business-related debts are eligible expenses for your PPP funds. 

Operational costs

Certain operations expenses are eligible for PPP loan coverage. If you use a business software or cloud computing service to help in essential business functions like product or service delivery, invoicing, processing payments, inventory management, or tracking expenses, then use your PPP loans to help cover the associated costs. As an influencer or streamer you might have project management software or invoicing software to send invoices to the brands you work with. 

Supplier costs

If you have any supplier costs associated with contracts or purchase orders made before your PPP loan covered period begins, then your PPP funds can help cover those. 

COVID-19 protection

Businesses have picked up new expenses that they might have never needed prior to the coronavirus pandemic. PPE, sneeze guards, and business expansion costs related to helping your business stick to COVID-19 guidelines from public health officials can be covered by the PPP loan. 

Property damages

Any property damages caused by the 2020 public disturbances and riots that you didn’t receive insurance coverage on are eligible for PPP loan coverage. 

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Apply for PPP loan forgiveness

Perhaps the most important step in the entire PPP loan process is applying for loan forgiveness. In order to receive loan forgiveness on the PPP loan, you must spend it on approved expenses and apply for forgiveness within 10 months of the last day of your covered period. 

To apply for loan forgiveness, you should first check if your lender has opted-in to the new SBA PPP Direct Forgiveness Portal. If your PPP loan was for $150,000 or less, AND if your lender has opted-in to the use of the platform, you will be able to submit your PPP loan forgiveness application online directly to the SBA, using the electronic equivalent of SBA Form 3508S. For full details, read our post about the new SBA PPP Direct Forgiveness Portal and other recent rule changes.

If the above doesn’t apply to you, contact your PPP lender and complete the correct application form. Fill out your application and gather any necessary documentation to verify how your PPP funds were spent. This might include bank statements, invoices, lease agreements, receipts, or cancelled checks. 

Turn all of that back into your lender and they’ll process your application with the SBA. All communication for loan forgiveness will be with your lender (unless you qualify for the new SBA PPP Direct Forgiveness Portal; see above), so stay in touch with them throughout the process. They’ll notify you when a decision has been made. 

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