It’s not just businesses that can get money from the government’s new “PPP” loans, artists too. here’s how
For the first time, many artists and independents have found that they are now eligible for unemployment benefits under the United States Government’s Aid, Relief and Economic Security Act (or CARES Act).
But what they may not know is that they can also benefit from the new Paycheck Protection Program loan program, commonly known as PPP. The loan is designed to provide incentives for small businesses and nonprofits with fewer than 500 employees to keep their staff, but many sole proprietors are also eligible.
“If you run your own business, even if you don’t officially pay yourself as an employee, you are a sole proprietor,” says labor lawyer Dana Lossia. “As long as you report business income on Schedule C of your income tax returns. It is a very good way for individual artists to benefit from the PPP.
If at least 75 percent of the loan is used for payroll, the loan will be canceled.
Some artists have already taken advantage of it. “PPP has been omnipresent in the news. I investigated and was happy to hear that freelancers and non-LLC freelancers could apply, ”said artist Natalie Frank, who hosted a show this month.t Half Gallery which has been postponed, as well as several works intended to be shown at the Tang Museum and the Yale University Art Gallery.
“Everything is delayed. Without an income and with all my extensive commitments, it seemed logical to apply, ”she says.
The key is whether an artist can show banks proof that they are operating with a payroll, rather than filing 1099 forms like many freelancers.
“Most artists use a Schedule C on their income tax return,” says Amy Davila, CEO of Art Smart, a business management company that caters to the art world. “The money comes in as income from art sales and then they deduct their business expenses. But that’s not what will get them the PPP. Banks examine payroll data and reports. They must therefore be able to show a mechanism of the studio business paying the artists as “employees” of the business. “
“So if an artist can show that he is paying himself, then he is considered an employee of the studio company and can therefore get the PPP,” Davila adds.
However, not all artists who use payroll have had a chance to apply for PPP. Some report delays, minimal government communication, and poor advice from big banks in particular.
Takako Tanabe, director of the Ulterior Gallery in Brooklyn, says her gallery submitted a PPP request via Bank of America on the first day the program started accepting bids, but she heard nothing until she learned that the first round of funds was gone. “Although Bank of America sent me a message stating that my application was complete and ready to be submitted to the Small Business Administration, it was a day after the news revealed that there was no more. silver.”
Many of the galleries and artists we spoke with were more fortunate to use smaller vendors than a large bank.
Tanabe says she subsequently submitted a PPP asks Square, the company that allows sellers to accept credit card purchases with small card readers, and had its funds at the end of this week.
Scott Ogden, founder of the Shrine Gallery in New York City, also got lucky with Square. “The experience was so much easier than Chase’s platform, and they’ve been in email contact with three updates already, and Chase hasn’t sent me much along the way,” says -he.
Frank found success with PayPal, which she tried after applying with two other lenders on the approved list, “a regional bank and a larger bank, which either did not respond or were delayed in the process,” she said. “PayPal was excellent and processed my request within days.”
“My advice?” she adds, “apply quickly”.
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