Drivers May Be Eligible for Small Business Support
IMPORTANT NOTE: As of April 27, the Small Business Administration has resumed accepting new applications for the Paycheck Protection Program. For the Economic Injury Disaster Loan Advance, the SBA is currently processing existing applications, and may reopen to new applications. We will keep you updated as we have new information.
During this challenging time, Lyft drivers play a critical role, connecting people to essential services and goods—like healthcare, food and medicine. We deeply appreciate your contributions to your communities, and also understand that earning money may be difficult right now.
Under the CARES Act, the Small Business Administration (SBA) created new programs to support small businesses, including those who are self-employed, sole proprietors or independent contractors. Many drivers on the Lyft platform are self-employed or own their own business and may be eligible.
These SBA programs are new and still in development, so there is a lot we don’t know about how the programs will work and details may change. We are closely monitoring these developments, and will continue to share updates based on our understanding of the programs. Funds are limited, so we are encouraging those who would like to apply to take action as soon as possible.
There are two programs available that could provide cash grants and forgivable loans to eligible drivers. Read on for more details, and you can also find information through the US Chamber of Commerce and Small Business Administration.
Economic Injury Disaster Loan Emergency Advance: opportunity for small businesses, including independent contractors and self-employed individuals, to receive a cash loan advance that does not have to be repaid. You can apply online through the SBA here.
What is this program? Small business owners, including independent contractors and self-employed individuals, are eligible to apply for an Economic Injury Disaster Loan advance of up to $10,000.
How much will I receive? According to the SBA, the grants could be up to $10,000, but the actual amount awarded will be determined by the Small Business Administration and could be significantly lower.
How do I apply? You can access the grant by applying for a COVID-19 Economic Injury Disaster Loan. The application form is on the SBA’s website here, and should only take 5-10 minutes to complete. There is a check-box on the application where you can indicate that you would like to be considered for the cash advance. You do not have to take out or be approved for a loan to receive the cash advance. You can also find detailed directions from the US Chamber of Commerce here.
When can I apply? The cash advances are available now through the end of 2020. We recommend applying ASAP.
When will I receive payment? According to the SBA, advance funds will be made available within 3 days of a successful application. However, processing times have been delayed due to the large volume of applications.
Paycheck Protection Program: in addition to the Economic Injury Disaster Loan Emergency Advance, some drivers may also want to apply for loans through the SBA’s Paycheck Protection Program. This is a new government program so we encourage you to review the conditions of the program in detail. Loan processing times may be very delayed as banks and the government work to meet the overwhelming demand for the program. Note that if you intend to apply to the Paycheck Protection Program, you may contact your local unemployment office to determine whether participation will impact your eligibility for unemployment benefits.
What is this program? This is a new program from the SBA that can provide loans to cover lost earnings for small businesses (including independent contractors) for an 8-week period, and can be forgiven with proof that the loan has been used for payroll costs.
How much can I borrow? Up to 2.5X average monthly wage, commission, income, net earnings from self-employment.
How do I apply? You can apply for the loan through your bank or credit union. Note that not all banks / credit unions are participating. The SBA has a tool for finding participating lenders here. You will need to complete the loan application form (your bank may have an online version), and provide documents as proof of your income (the government has not yet finalized the requirements, but it will likely include tax forms such as the 1099-MISC).
When can I apply? Independent contractors and self-employed individuals can apply beginning April 10 through June 30. There is a cap on the funds available for the loan, so if you choose to apply, you should do so ASAP.
How do I get the loan forgiven? Submit a written request to your lender. At least seventy five percent of the loan proceeds must have been spent on qualified payroll expenses in order for the loan to be eligible for forgiveness. Note: The SBA has not yet shared the process for how the loan forgiveness will work for self-employed independent contractors. If the loan is not forgiven, you will have to pay it back over two years at an interest rate of 1%. In addition, if you have received an Economic Injury Disaster Loan Emergency Advance, this amount will be subtracted from the amount forgiven.
Where can I find more information? You can find more information about the Paycheck Protection Program at the following links: