A Lifeline Now Available to Unemployed Contractors During COVID-19


It has been noted, especially by those who are independent contractors, gig economy workers and freelancers, that the government assistance money provided by the Federal government to offset the economic/labor disruption caused by COVID-19, was not readily accessible to those who didn’t hold a W2 job. With the increased numbers of those workers who fall into those three categories, a wide swath of the American labor force was denied this lifeline. It would seem however, that this injustice is about to be rectified. Here’s the latest.

On March 27, 2020, Congress passed the CARES Act. This legislation provides independent contractors, gig workers, and freelancers impacted by COVID-19 the ability to request government grants in the amount of $1000 through the Small Business Administration (SBA). It is critical to note that although these are referred to as “grants”, these advances are not required to be repaid.

The $10 billion allocated for these grants led to a quickly overwhelmed SBA application process and the suspension of the program in mid-April when the appropriation of these funds lapsed. However, the SBA has now lifted the suspension thanks to April legislation which has allocated an additional $60 billion for this and other types of grants.

All a contractor needs to do to participate is to complete a simple form at the SBA requesting an Economic Injury Disaster Recovery Loan (EIDL). You can find that application form here. Again, while characterized as a loan, these “advances” do not require repayment and the advances are given even if the EIDL loan is not granted.

So, who is eligible to receive these grants? In addition to those already eligible for SBA disaster grants and loans, the SBA has expanded eligibility for worker classifications including:

  • Sole proprietorship’s (with and without employees)
  • Independent contractors
  • Gig economy workers
  • Freelancers

All that is required is that the applicant shall have been established in business as of January 1, 2020. Also, it is important to note that this newly expanded eligibility criteria as well as the grants themselves will be available only through the end of the year – December 31, 2020. Also, those who qualify should apply quickly as possible because as we’ve seen before, the SBA money will likely be snapped up quickly by the overwhelming numbers of ICs, freelancers and gig workers who really need this lifeline as the pandemic stretches on.

We recommend if you qualify, that you apply as soon as possible and we are here at nextSource to answer any questions you may have about your eligibility and the process overall. Reach out if you have questions.

To read more on this subject turn to nextSource for expert guidance and visit our solutions page.

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