The CARES Act

This episode is for my US-based solo cleaners only. President Trump signed the CARES Act into law on Friday, March 27th. In this 900 page, $2 trillion bill, congress has earmarked $350 billion in personal stimulus to American families and $350 billion to the Small Business Administration (SBA) to disperse to small businesses across the fruited plain. The personal stimulus is automatic and requires no action. If the Treasury already has your bank's direct deposit on file, you'll receive your money in April 2020. Otherwise, it may take a few months. If you're like me, you just assumed you didn't qualify for any of the other $350 billion. Well, you're wrong. This episode covers the 4 main portions of the CARES Act that the self-employed can take advantage of. Some of the money is first-come, first-serve, so get applying!

Before I begin, let's give credit to my source. Denai Wolfe of The Chic CFO has been helping so many people figure this law out since our president signed it. Denai does daily FB Lives in her Profit Factor group and I've had the honor of two expert calls on Zoom with her on the SMART Cleaning Tribe membership that I run and the Total Life Freedom Community that my friend Vincent runs. This episode is a culmination of my knowledge and applying to us... the Solo Cleaning Owners! Make sure to check out this FREE RESOURCE from Denai as well!
 
There are 4 parts of this law that pertains to us, the self-employed solo cleaners. The EIDL is a given. Go apply ASAP!!! You could get up to $10,000. The FMLA, UC, and PPP are the others and you would have to select one! In this episode, I describe how to calculate your average monthly payroll and go through examples of each of these options. I also give an example of a sole proprietor solo cleaner earning $2,000 per month in payroll and how to decide which option to take. I'll share basics here, so make sure to listen to the full episode for more details.

Family Medical Leave Act (FMLA) - This law has been extended for the CARES Act. If you are sick, whether you have kids or not, you can take off of work for two weeks to recover. You would pay yourself your full salary out of your cash and get reimbursed by the government in the form of tax credits over the next year or two. The second section is for parents with kids under 18 years old. If you cannot work because your kid's daycare, summer camps, etc were canceled due to Corona, you can stay home to take care of your kids. This provision is allowed for up to 12 weeks and you pay yourself 2/3 of your weekly payroll. Again, this is reimbursed over time through tax credits. If you choose this option, make sure to detail your books to show "FMLA" payments.

Unemployment Compensation (UC) - The states have been given authority to open UC for the self-employed. That's you! This is a little more complicated and it's not available yet. Check your state UC page daily until it's available. You will need excellent records. Every state is different. In this episode, I go through a few scenarios. To keep it simple, just apply once it's ready. This could be our best option of the "3 boxes".

Economic Injury Disaster Loan (EIDL) - This is the NO-BRAINER! It's possible to get a $10,000 forgivable "advance" or grant and it's possible to get $1,000 as a single person operating your solo cleaning business. Either way, the application is 10 minutes. Do it!.

Paycheck Protection Program (PPP) - I thought this was for larger companies only. I only have 2 employees on the books. Those employees are also the owners, my wife and I. You can apply for a fully forgiveable 8-week loan of 2.5 x your average monthly payroll. Make sure to have your numbers ready and apply with the bank you already have a relationship with (as long as they are participating in the PPP).

Example: DBA Solo Cleaning Company earning $2,000 per month in payroll

• Box 1: FMLA - $2,000 x 2/3 = $1,334/mo or $307/week for 12 weeks & $3,684 paid back in tax credits over time
• Box 2: UC - $2,000/mo = $461/week. Let's say you are down partially to $200. Estimate 0.4 x $400 = $160/week PA + $600/week Feds = $760 / week for 15 weeks through July and $160/week for up to 24 more weeks. This would be $17,640 total in unemployment through 2020, but you have to keep qualifying. If your business is shut down completely, you would qualify for more.
• Box 3: PPP - $2000 x 2.5 = $5,000 / 8 weeks = $625/week for 8 weeks & $5,000 forgivable after the 8 weeks

Takeaways:

1. Get your books in order!
2. Apply for everything you can, including other free money like state and county grants!
3. Decide on the best "box" for your situation and only take that one. 
4. This is a ton of work, but it could lead to a significant amount of cash to help your family through 2020!