It’s Not Just Businesses That Can Get Cash From the Government’s Coveted New ‘PPP’ Loans—It Turns Out Artists Can Too. Here’s How

For the first time, many artists and freelancers
have found that they are now eligible for unemployment payments
under the US government’s Coronavirus Aid, Relief, and Economic
Security Act (or CARES Act).

But what they may not know is that they can also receive
benefits from the new loan program Paycheck Protection Program,
commonly known as PPP. The loan is designed to provide an incentive
for small businesses and nonprofits of fewer than 500 employees to
keep their staff on payroll, but many sole proprietors qualify as
well.

“If you run your own business, even if you don’t officially pay
yourself as an employee, you’re a sole proprietor,” says employment
attorney Dana Lossia. “As long as you report the business income on
Schedule C of your tax returns. It’s a really good way for
individual artists to benefit from PPP.”

If at least 75 percent of the
loan is used for payroll, the loan will be
forgiven. 

Some artists have already been taking advantage of the
benefit. “PPP has been
ubiquitous in the news. I investigated and was happy to learn that
freelancers and self-employed non-LLCs were eligible to apply,”
says artist Natalie Frank, who had a show this month at Half
Gallery that was postponed, as well as several works intended to be
shown at the Tang Museum and the
Yale University Art Gallery.

“Everything is delayed. Without
income and with all of my commitments pushed, it seemed logical I
should apply,” she says. 

The key is whether an artist can
show banks proof that they operate with a payroll, rather than
filing with 1099s, like many freelancers.

“Most artists use a Schedule C
on their tax return,” says Amy Davila, CEO of Art Smart, a
business management firm that caters to the art world. “Money comes
in as revenue from art sales and then they deduct their business
expenses. But that’s not what’s going to get them the PPP. The
banks are looking at payroll data and reports. So they have to be
able to show some mechanism of the studio business paying the
artists as ’employees’ of the business.”

“So if an artist can show that
they are paying themselves then they qualify as employees of the
studio business and thus can get the PPP,” Davila adds.

Not all artists who use payroll have had luck applying for PPP,
however. Some report delays, minimal communication from the
government, and poor guidance from large banks, in particular.

Takako Tanabe, director of Ulterior Gallery in Brooklyn, says
that her gallery submitted a PPP application through Bank of America the first
day the program began accepting submissions, but she did not hear
anything back until learning that the initial round of funds was
gone. “Although Bank of America sent me a message that my
application was complete and ready to be submitted to the Small
Business Administration, it was a day after the news revealed there
was no more money.”

Several of the galleries and artists we spoke with have had
better luck using small vendors, rather than a big bank.

Tanabe says that she later submitted a PPP application to Square, the company
that lets vendors accept credit-card purchases with small card
readers, and had her funds by the end of that week.

Scott Ogden, founder of New York’s Shrine gallery, also had luck
with Square. “The experience was so much easier than Chase’s
platform, and they have already been in touch via email with three
updates, whereas Chase sent me virtually nothing along the way,” he
says.

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, who didn’t reply
or were delayed in the process,” she says. “PayPal was excellent
and processed my application in a few days.”

“My advice?” she adds, “apply
quickly.”

The post It’s Not Just Businesses That Can Get Cash From the
Government’s Coveted New ‘PPP’ Loans—It Turns Out Artists Can Too.
Here’s How appeared first on artnet News.