Filmmaker's Guide to Applying for US Coronavirus Federal Relief
Last Updated: February 25, 2021
Important Update: Special Two-Week Window for Very Small Businesses - President Biden has announced that from February 24 through March 9, the PPP application process will be exclusively available to businesses with fewer than 20 employees. Additional changes include revising eligibility calculations so that sole proprietors, independent contractors and self-employed individuals can receive more funds.
Through a series of Congressional economic stimulus packages over the course of 2020, culminating in the Economic Aid Act, documentary filmmakers impacted by the pandemic can apply for immediate and short-term federal relief from the US government.
Please note this guide was prepared to give general advice to filmmakers and production companies. It should not substitute for professional advice you may need for your unique situations. New federal guidance is being issued regularly. Information provided on this page may change as the situation evolves.
Where to Apply
Does it need to be paid back?
Individual state’s Unemployment Insurance (UI) Program
Individuals who have lost jobs or furloughed, including gig workers, freelancers and self-employed
Amount set by your state + an additional $300 per week
Paycheck Protection Program (PPP) First and Second Draw Loans
Small Business Administration (SBA)
Sole proprietor and independent contractors as well as 501(c)(3), 501(c)(19), tribal businesses, any small business structures (C-Corp, S-Corp, B-Corp, LLC, Partnerships) with fewer than 500 employees
250% of your average monthly payroll costs up to $10 million first draw loans) and $2 million (second draw loans)
An existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating in the PPP
*contingent on spending the loan on authorized costs and retaining employees and wages intact
Small Business Administration (SBA)
Sole proprietor and independent contractors as well as 501(c),(d), 501(c)(19), tribal businesses, any small business structures (C-Corp, S-Corp, B-Corp, LLC, Partnerships) with fewer than 500 employees
Maximum loan is $2 million with the exact amount based on economic injury suffered
*An amount up to $10,000 is a loan advance, aka a “grant.” You cannot use the PPP and EIDL grant for the same expenses. Any amounts greater than the loan advance is a traditional loan and must be paid back.
Small Business Administration Programs (PPP & EIDL) FAQ
What is the SBA's definition of a “small business” that qualifies for PPP and EIDL?
Qualifying businesses with 500 or fewer employees or the applicable size standard as assigned in the North American Industry Classification System Codes (page 30, 34, 40, 43). Click here for the SBA size standard calculation tool.
- Tribal business
In addition to the above types of small business, qualifying US residents with self-employment income (such as an independent contractor or a sole proprietor), that have filed or will file a Form 1040 Schedule C, are also eligible to apply.
What expenses do PPP loans cover? *UPDATED*
PPP loans cover payroll costs (including salaries, paid sick and medical leave, and insurance premiums and mortgage, rent and utility payment obligations in effect before February 15, 2020.
PPE expenses are also now considered eligible and forgivable expenses.
How are PPP loans forgivable? *UPDATED*
In general, payroll costs paid or incurred and non-payroll costs such as utilities, business rent and mortgage interest payments paid incurred during the covered period are eligible for forgiveness.
The December, 2021 legislation simplifies the forgiveness process for loans of $150,000 and less. Borrowers that receive a PPP loan of $150,000 or less shall receive forgiveness if the borrower signs and submits to the lender a certification that is not more than one page in length, includes a description of the number of employees the borrower was able to retain because of the loan, the estimated total amount of the loan spent on payroll costs, and the total loan amount.
What are the interest rate and payment terms of PPP loans?
The unforgiven portion of any PPP loan carries a 1% fixed interest rate with a 2-year repayment term after a 6 months deferral. Following the June 5th legislation, the loan term will move from being a two-year loan to a five-year loan for any new loans. If you already have a PPP loan, you can work with your lender to mutually agree to modify the term to 5 years. This is relevant for you if you expect, even with the new provisions, that you will not get the entire loan forgiven.
Is there a fee applying for PPP loans?
No, there is no SBA or agent fee. However, some banks may require you to be an existing customer or to have a certain type of product with them.
How will PPP funds affect my taxes? *UPDATED*
The PPP loan forgiveness amount will not be considered taxable income at the federal level. (consult with state and local tax authorities for guidance on that level)
The new bill allows the deduction of business expenses paid for with forgiven PPP loans.
How do I calculate the maximum amount I can borrow through PPP? *UPDATED*
The 100% government-backed loan amount will equal 250% your average monthly payroll, up to $10 million cap.
Small businesses and self-employed individuals, see SBA’s ""How to Calculate Maximum Loan Amounts - By Business Type" memo for the calculation methodology.
What information will I need for PPP loan applications? *UPDATED WITH NEW APP FORMS*
Small businesses: SBA requires Form 941 and Form 940, evidence of business rent, mortgage interest payments, or utility payments with the loan application. Each lender may require additional documents. We recommend that you have something to document that you were operating prior to February 15, 2020 such as a profit / loss statement for 2019 and the first two months of 2020, and incorporation documents for corporations, LLC’s or partnerships.
Self-employed individuals: Individuals with self-employment income must provide the 2019 Form 1040 Schedule C and Form 1099-MISC with your PPP loan application. If you have not yet filed 2019 taxes, you still need to complete and submit both forms. You must also provide a 2020 invoice, bank statement, or book of record to establish you were in operation on or around February 15, 2020.
Click here for PPP Borrower First Draw Borrower Application Form.
Click here for PPP Borrower Second Draw Borrower Application Form.
How do I decide which bank to apply for PPP loans? *UPDATED*
You can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program.
If I already received a PPP loan, what are the eligibility requirements to receive a second one under the legislation that passed in December 2020? *NEW*
Your business must employ no more than 300 employees per physical location;
Your business has used, or will use the full amount of its first PPP loan
Your business has experienced at least a 25% reduction in quarterly revenues in at least one quarter of 2020, as compared to the same quarter of 2019.
When can I apply for the new round of PPP funding? *NEW* FIRST-TIME BORROWER CAN APPLY NOW
Applications for first-draw (first-time) loans open on January 11, 2021; Second-draw (second-time) loans on January 13. The program will be open through March 31, 2021.
Are there any types of businesses that get special consideration? *NEW*
The program has implemented a number of efforts intended to increase access to capital for underserved communities and very small businesses. It gives priority to community lending institutions, such as Community Development Financial Institutions Fund (CDFI)'s and minority depository institutions, with both set-aside funds and a 2-day advance window for those institutions to accept applications. It also sets aside funds for business with fewer than 10 employees and those located in distressed areas.
What if my business is seasonal and was dormant or not fully operating as of February 15, 2020? Can I still apply for PPP loans?
Yes, seasonal businesses are also eligible for PPP loans under new rule (TREAS-DO-2020-0009) released by the Department of Treasury. The alternative eligibility period in calculating your maximum loan amount is any 8-week period between May 1, 2019 and September 15, 2019.
I’m self-employed (independent contractor or sole proprietor) and I already filed for a PPP loan with a lender without Form 1040 and Form 1099-MISC. What do I do?
You should consult the lender where you applied.
What expenses does an EIDL cover?
EIDL may be used to pay fixed debts (rent, etc), payroll, accounts payable, workers’ paid leave and other business operational needs that can’t be paid because of the disaster’s impact.
Dividends and bonuses, disbursements to owners, expansion of facilities or acquisition of fixed assets, repair or replacement of physical damages, payments to pre-existing debt, payments to other federal(including SBA) or small business investment company (SBIC) loans are not eligible expenses under the EIDL. For the full list of ineligible uses, click here (page 75).
How is an EIDL forgivable?
Only the loan advance up to $10,000 is forgivable. The actual amount is determined by the size of your small business.
What are the interest rate and payment terms of an EIDL?
The interest rate is 3.75% for small businesses. The interest rate for non- profits is 2.75%.SBA offers loans with long-term repayments in order to keep payments affordable, up to a maximum of 30 years. Terms are determined on a case-by-case basis, based upon each borrower’s ability to repay.
Is there a fee applying for an EIDL?
No, there is no cost to apply.
Do I have to take the EIDL if offered?
No, there is no obligation to take the loan.
What information will I need for EIDL applications?
Basic information includes gross revenues, cost of goods sold, lost rents (for rental property owners), operating expenses, other reimbursement received (i.e. business interruption insurance), and the number of employees during the 12 months period prior to Jan 31, 2020. Click here for the online EIDL application.
SBA requires a completed application upfront. If your application is incomplete, it will be set aside. You will be notified what is missing, but you will fall back in the queue after submitting supplemental materials.
Other information that may be requested by SBA for an EIDL include:
- SBA Loan Application (SBA Form 5 or 5C)
- Personal Financial Statement (SBA Form 413)
- Schedule of Liabilities (SBA Form 2202)
- Tax Information Authorization (IRS Form 4506T)
- Federal income tax returns (with schedules) for principals, general partners or managing member, and affiliates for 3 years
- If the most recent Federal Income Tax Return has not been filed, a year-end profit-and-loss statement and balance sheet for that tax year
- A current year-to-date profit-and-loss statement
- Additional Filing Requirements (SBA Form 1368) providing monthly sales figures.
What if I'm rejected for an EIDL?
You have six months to provide new information and submit a written request for reconsideration.
Can I change an EIDL amount after acceptance?
If more funds are needed, applicants can submit supporting documents and a request for an increase. If less funds are needed, applicants can request a reduction in the loan amount.
Can I apply for both a PPP loan and EIDL? *UPDATED*
Yes, you may apply for both a PPP loan and an EIDL. The EIDL loan advance no longer needs to be deducted from the PPP loan forgiveness amount.
When can I apply for SBA loan programs?
SBA lenders and SBA have resumed processing PPP loans and EIDL applications. They are prioritizing those who have already submitted an application before accepting new ones. You should apply as soon as possible.
How long do I need to have been in business in order to qualify for SBA programs?
You need to have been in operation prior to February 15, 2020.
How do you estimate the loss of revenue from planned projects?
The PPP program is based upon your payroll, not your lost revenue. The EIDL specifically addresses loss of revenue. If you apply for an EIDL, you will need to work with the SBA in underwriting your loan.
My revenue varies greatly from one month to the next and one year to the next. How do I calculate the average monthly payroll?
You add the payroll for each of the last 12 months then divide by 12.
If I want to make sure that I don’t have to pay the government back for either EIDL or PPP, what conditions do I need to meet? Are they different for the two programs?
EIDL is a traditional loan program with an “advance” up to $10,000 that does not have to be repaid and certain payroll tax credit benefits that must be repaid. PPP is an unconventional loan program with loan forgiveness for certain covered expenses. If you apply for both, make sure you do not use the loans for the same purpose.
Will payroll for part-time employees or new hires be forgiven?
Payroll paid between February 15 and December 31, 2020 is eligible for forgiveness.
Can residents of Puerto Rico receive funding?
How can I find more information from the SBA?
For questions, please contact the SBA disaster assistance customer service center at 1-800-659-2955 (TTY: 1-800- 877-8339) or e-mail email@example.com. You can also try your regional SBA administrator.
FAQ Specific to Single-person Entities
I am the owner of my business. My income comes both from payroll I run for myself, as well as from quarterly distributions. What can I count as my income?
You should work with your banker to determine the correct amount.
How do I determine if I’m considered a sole proprietor or an independent contractor?
There is no clear distinction as the terms are often used together. Often a sole proprietor may receive his or her income through 1099 payments.
I do a mix of W-2 and 1099 work. I file taxes as an individual, not as a business. Can I file for SBA programs in addition to unemployment benefits?
You can apply for unemployment for your W2 wages and an SBA loan for your 1099 work. However, you can only collect once so total payments should not exceed your average income.
How do I decide if I should apply for unemployment benefits or for SBA programs?
You should consult your advisors such as your accountants and lawyers.
FAQ Specific to Multiple-person Entities
Can company principals be included in the employee count for payroll protection?
I have an LLC, but I am the only W-2 employee of it. Everyone that I hire (crew, editors, associate producers), I pay as independent contractors on 1099s. Am I filing for PPP for just my own payroll costs, or should I include my contractors as well?
You would apply only for your own payroll costs.
Because filmmakers often have multiple LLCs, LLPs, Corporations etc. built around their films, how does that affect how we would apply?
Each LLC should apply separately for its own payroll costs.
Can we apply if we use a payroll company?
Common Filmmaker Scenarios
I received grant money in 2019. Should that be considered 1099 income?
You should consult with your accountant and the foundation or organization that made the grant for guidance.
I’m a permanent resident who may want to apply for citizenship. Does receiving funds from any of these programs impact being denied citizenship based on Public Charge Grounds?
You should consult your immigration attorney.
For undocumented people who are self-employed, independent contractors via their own LLC, are they eligible for the small business provisions of the stimulus package even if the person has no DACA/SSN?
Undocumented people are typically not eligible for SBA programs. You should contact your advisors.
You can learn about other government benefits (including food security benefits and stimulus checks) that are available to individuals with varying levels of documentation in this PowerPoint by the National Immigration Law Center.
My company is operating at a negative balance (no income yet). Can I still qualify for relief?
Yes, if you were making payroll payments.
I have a single-member LLC. I signed a documentary distribution deal, eligible for obvious but unprovable loss of income. An example is anticipated but unprovable loss of income from spring education distribution aimed at universities.
PPP is not designed for loss of income but to replace payroll expenses and certain other fixed costs. If applying for an EIDL, you will need to work with the SBA in underwriting your loan.
I have a single-member LLC, which brings in around $50,000/year from renting gear to productions. Am I able to apply for the SBA PPP loan?
You are eligible for PPP if you have payroll expenses. If you only paid yourself via an annual distribution, aka “owner’s draw,” you should consult your local banker. Some banks have reportedly been encouraging applicants to include owner’s draw in their total income, while others have suggested not doing so. It seems that this is up to the bank’s discretion.
Is a tiny incorporated production company or its sole employee/owner eligible for government relief even if the company is still receiving client checks for work completed before the COVID shutdown?
You are eligible if your business has been impacted by the shutdown. If you have money that was earned before but are not completing new jobs, you are also eligible.
I have a fiscal sponsor, am I eligible for any of these programs?
If your fiscal sponsor practices a “Model C” regranting model of fiscal sponsorship (most arts and media fiscal sponsors including IDA, Women Make Movies, IFP, Film Independent, Southern Documentary Fund, The Film Collaborative and Fractured Atlas are “Model C”) you are an independent entity and may apply on your own if you otherwise qualify.
If your fiscal sponsor practices a “Model A” direct project model of fiscal sponsorship (less common for film and media projects) where they pay your staff directly, manage your payroll or are the employer of record for project expenses, you are likely not eligible to apply on your own. Discuss your situation with your fiscal sponsor.
Additional Resources *UPDATED*
For resources on unemployment compensation, please check out our other resource "Navigating US Unemployment Compensation as a Filmmaker"
UPDATED! PPP resources from the Department of Treasury is frequently updated; make sure to bookmark. Read More
NEW! Top-line Overview of PPP First Draw Loans from SBA Read More
NEW! Top-line Overview of PPP Second Draw Loans from SBA Read More
NEW! "Second Draw PPP Loan Regulations Are Out: What You Need To Know" from Forbes, 1/7/21 Read More
NEW! Journal of Accountancy's "New PPP guidance", 1/7/21 Read More
NEW! "Guidance on Accessing Capital for Minority, Underserved, Veteran and Women-Owned Business Concerns" by SBA Read More
UPDATED! Fiscal Management Associates (FMA PPP) Toolbox, excellent guides for both small businesses and freelancers. Registration open for FMA’s new PPP Forgiveness Racial Equity Initiative through 1/15/21.
Applying for SBA Disaster Loans (EIDL) Presentation from SBA West Virginia Office View PDF
F.A.Q. on Coronavirus Relief for Small Businesses, Freelancers and More from the New York Times Read More
SBA PPP Overview from Cornerstone Government Affairs Read Memo
SBA COVID-I and COVID-II small business loan programs overview from Cornerstone Government Affairs Read More
Resources for Undocumented Immigrants
National Immigration Law Center FAQ: Understanding the Impact of Key Provisions of COVID-19 Relief Bills on Immigrant Communities READ MORE
National Immigration Law Center webinar from 4/16/20: Equal Opportunities to Thrive: Covering Rebates, Tax/SSN/ITIN, Food Security & Access to Food Programs. View Powerpoint
FAQ for Immigrant-Owned Worker Cooperative Businesses on Federal Coronavirus Funding Options READ MORE
InformedImmigrant.com State-Level Directory for Resources for Immigrants during the coronavirus crisis READ MORE
COVID-19 Resources for Undocumented Communities (organized by state) READ MORE
Fact Sheet on Eligibility for Unemployment Benefits During COVID-19, National Employment Law Project READ MORE
Access COVID-19 Support as a DACA Recipient or as an Undocumented Immigrant from Immigrants Rising read more