This announcement is specifically for family child care providers who are sole proprietors or self-employed with NO employees. Gary Romano, Civitas Strategies, has shared the following new information about an opportunity with the federal Paycheck Protection Plan for these individuals:
Good afternoon,
We have some big news. The Small Business Administration recently announced a change to the Paycheck Protection Program (PPP) funding formula for sole proprietors or self-employed people without w-2 employees.
If you have not already received a PPP loan you can now get around 2 to 3 times more funds.
Previously, your funding was based on your net income (that is the money you made after your expenses like diapers, wipes, etc.).
Now you can get funding based on gross income which is the money you took in (before expenses).
Here’s an example of the difference using data based on a real family care provider:
- The provider had a 2019 gross revenue of $41,000 and a net income of $18,000 (i.e., after all her expenses were taken out).
- Under the old PPP rule she would get a loan of $3,750.
- Under the new PPP rule she would qualify for a loan of $8,541.
Many of the banks are still changing their systems to accept the new formula, but some are now open for this additional funding!
Here’s what we recommend:
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If you have not applied for the PPP, do so! One bank that is open for the new formula and works well with family care providers is: PayPal/LoanBuilder.
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If you already have an application in with a bank - email them and ask how you can take advantage of this new formula. You can also apply to more than one bank (including PayPal/LoanBuilder).
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If you already received or had your PPP loan approved, unfortunately there is no way to make this formula retroactive, so no action is needed.
This video briefing from New Jersey which was conducted yesterday can give you more detail on these changes – in both English and Spanish.
For more information on applying, see our Stimulus Navigator or email Home Grown Child Care’s national support provider at ppp@civstrat.com.
Please note that VECF is NOT able to provide individualized responses, but help is available for relevant family child care providers by emailing ppp@civstrat.com.
