There’s no doubt the whole COVID-19 situation has brought disaster to way too many lives. Yet, out of this turmoil, some good things have arisen.
There’s a lot more camaraderie and a spirit of appreciation for the helpers in our world. Neighbors are coming to one another’s aid, sharing resources, and doing favors for one another. If you’ve been driving or delivering, you probably noticed something else that’s pretty nice: people are tipping!
That doesn’t mean things are all that great for drivers though. As you’ve undoubtedly seen by now, being qualified and applying for unemployment compensation doesn’t mean it comes right away. And even though people are slowly coming back to business, driving is nowhere near what it once was—and for many of us, it still holds dangers. What that means, to a large degree, is that drivers are still left holding the (woefully empty) bag.
What can you do to make sure you stay afloat? There are some steps you can take … many are easy, and others require creativity. We hope to help you here with some inspiration and guidance about securing your financial integrity.
First, in case you haven’t heard yet, you can get unemployment compensation (UC). When the CARES Act was passed in March, independent contractors became eligible for the first time. Not only can drivers collect state UC now, you can also receive $600 per week in federal funds through July 2020. If you haven’t applied yet, it’s definitely something you should consider. Here’s a Gridwise article that’ll give you the information you need to put your application together.
Collecting unemployment: a slow and difficult process for drivers
It’s hard to find a driver who’s not grateful for the possibility of collecting unemployment while we wait for this crisis to end … but so far, actually getting unemployment has been difficult. A huge factor in the delay is the flood of applications that hit antiquated state computer systems, many of which had no way of handling information from independent contractors such as drivers.
Can you say n-i-g-h-t-m-a-r-e?
On top of that, the IRS website has only recently started allowing people who have not yet received their $1,200 stimulus checks to enter their bank information and get direct deposit. If you’re like many of us and are still waiting for your money, you can go to this IRS site, which is finally ready, at long last, to receive your bank information.
Before signing onto the site, have your tax return (2018 or 2019) handy. The IRS needs your adjusted gross income and the amount you owe(d). You’ll also need your bank’s routing number and your account number, and you can find that info on the bottom of one of your checks.
The delays with unemployment and the IRS payment—money we thought would be coming to us by now—have been long. In the meantime, bills continue to pile up. Sure, it’s good to know that there will be a nice amount of cash coming your way … one day. But what about the bills you need to deal with in the meantime?
SBA loans and grants: programs to support small businesses, like yours
When the CARES Act was passed, a big part of it involved help for small businesses and independent contractors beyond unemployment. You’ve probably heard about the Paycheck Protection Program (PPP). It helps small businesses continue to keep employees on the payroll and pay their basic expenses. It was immensely popular—so much so that the program ran out of money in just two weeks because so many people applied.
You’d expect that to happen to some degree, but what no one was ready for was the way not-so-small businesses, namely restaurant chains and huge, well-endowed universities went after what they considered to be their share.
The programs have recently been replenished, as Congress passed a bill to add $484 billion to the PPP fund and other programs, and for aid to hospitals and to states doing COVID-19 testing. For you as a driver, it will be easiest if you’ve already got a business set up as a LLC, and possibly employ people to support that business. But even if you don’t, there are still some options.
If you prefer, you can apply for a PPP loan as an individual. The process for independent contractors isn’t overly clear, but provisions are in the legislation. If you get the loan, and you use it only for covering expenses that are directly related to your business such as rent and utilities, you won’t have to repay it. If you can’t or don’t use all of it for these purposes, you’ll have to pay it back within two years, with a 1% interest rate.
There is also another program that drivers might consider called the Economic Injury Disaster (EID) Program. This program administers loans during emergencies such as the one we’re dealing with now, and they carry a very low interest rate. If you apply for a loan, you can get an emergency grant, which could be up to $10,000.
Before you can get this grant, you must apply for the loan as an independent contractor. If you get the grant while you’re waiting for your application to be processed, you have no obligation to repay it. If you also have a PPP loan, the amount of the grant will be subtracted from the loan amount.
The sweet thing about the EID loan and grant program is the grant money could come to you as soon as three days after you apply for the EID loan. The less-than-reliable part of this strategy for getting aid is not knowing how much you’re going to get.
The rule of thumb the Small Business Administration uses for the PPP loan is up to 2.5 times your average monthly income for the last 12 months. It might not be very much, as you’ll be competing with businesses that need to support employees and cover expenses.
Also, doing the administrative work for a loan can be challenging for those of us who have no support staff to help with paperwork and record keeping. On top of having to allow the government to examine all your tax records, which can be quite time-consuming, your credit score will be a major factor in the approval process. You’ll want to make sure it’s pretty solid before you even think about applying. If you do get the loan, you’ll have to be impeccable about your accounting, so consider that as well.
If none of this intimidates you, go ahead and apply for the loan, and then ask for the grant. You could get some money while you’re waiting for the loan to be processed or UC payments to start coming your way.
Just do it soon. This fund is first come, first served … and as we already said, there have been some greedy companies and institutions trying to grab huge handfuls from the government cookie jar. There’s no telling how soon it will be before we’re down to the crumbs again.
Before you apply: Be very careful about double-dipping! You’ll want to inquire about whether it’s okay to get UC in addition to a loan or grant, if this is your plan. You’ll apply for the loan at your local lending institution, so it should be pretty easy to get straight answers in a reasonable amount of time.
Funds dedicated to independent contractors
If government loans don’t work for you, special funds set up by organizations that support independent contractors can give you options for a solid stopgap measure.
This organization gathered a group of corporate sponsors, most of which rely on freelancers, to create a fund for those in need. Just like the government, this fund got overwhelmed quickly by an onslaught of requests. Keep checking the site. Chances are they’ll start to take applications again once more funding appears.
Contributors support this fund, which is for those of us who are suddenly struggling to pay our bills. You can apply for help directly through the site, and hopefully one day you’ll be able to make a contribution for someone else in need.
Freelance Artists (and friends)
The Freelance Artists Emergency Fund is geared primarily toward artists (including writers). Their information is useful no matter what you do, but it’s even more helpful if you happen to be an artist in addition to being a driver, as so many of us are. The list of available funds could help keep you from falling through the cracks while you wait for your money situation to improve.
I Care if You Listen: Funds for Musicians
We know there are many musician-type drivers, so we’re listing this site for you to explore. Yours is an industry that will be disrupted by social distancing for a really long time. The site offers links to many resources for money aimed at helping out the troubadours and lutemasters of our age. But even if you can’t carry a tune in a bucket, you might still get some ideas for resources here. Don’t be afraid to look.
Oh yeah, you can do this. How many people you know have started one of these and made out pretty well? You’ve probably been a donor at some point in the past. If you’re too proud to do one just for you, consider a page for drivers in your city. Getting a fund going is a pretty smart and direct way to get the help you need.
Landlords lend a hand
Okay, maybe in some cases it was necessary to twist their arms. But it’s true that there’s some chance of rent relief, as well as forgiveness for onerous mortgage payments. The good old CARES Act has us covered here too.
Here are some facets of this new law that can help you keep a roof over your head. That’s become excruciatingly more important now that you have to stay home so much of the time.
CARES Act Eviction Protection
If you live in any kind of federally funded housing, you are now protected from eviction for 120 days. During this time, the landlord cannot charge you late fees or turn you out of your home. You’ll still be responsible for the rent, by the way, but you’ll get these four months to get caught up.
CARES Act Tenant-Based Rental Assistance
The Department of Housing and Urban Development (HUD) was allocated more than $17 billion to administer vouchers and affordable housing to those who need it. Check out the programs here.
Indirect Relief
Don’t forget you have that $1,200 check coming to you, and more if you have a partner and/or children. You can use that to help with the rent, of course. Also, your landlord is counting on you to apply for unemployment compensation.
Direct Negotiation
Most landlords understand you’re under pressure right now, so many will allow you to defer or break up your rent payments without a fee. Normally, if you can show the landlord or management company that you have applied for unemployment or some other subsidy, they’ll negotiate with you. From their point of view, getting something from you is better than getting nothing. They’ll be more strapped than usual too, so they have to understand what it feels like.
Mortgage Relief
Federally backed mortgages
Mortgages backed by the federal government are a good thing to have, especially now. The CARES Act directs lenders to suspend payments for 12 months, and suspends eviction proceedings for the duration of the COVID-19 crisis. There are other provisions that allow you to defer mortgage payments too. Learn more about them here.
Lending Institution-based Mortgages
As with landlords, banks and other lenders have to know how difficult it might be for you to make your payments on time under the current conditions. Go to your lender and ask what programs they’ve put in place to help you and others who are affected by the crisis. Even though they’re not required by law, many are putting programs in place to support your need to defer payments without penalties and late fees. It’s always better to ask for help than to stop making payments. With the lender’s help, your credit rating can remain intact.
Utilities and Insurance
Many utilities have put moratoriums on disconnecting service for nonpayment during the COVID-19 crisis. Some have even reduced their rates, or allowed customers to break their bills into separate payments.
The big phone, internet, and cable companies might need a little cajoling (or shaming) into helping people out, but it’s always worth a try. Their services may not be as essential as electricity and natural gas, so, as a rule, they feel less obligated to the public. Still, most of these companies are eliminating late fees and disconnects until we get through this crisis. (Can you imagine “staying at home” without internet service??)
Insurance companies, especially those that deal with auto insurance, have taken it upon themselves to reduce, if ever so slightly, their monthly premium charges. They figure if you’re not driving they’ll be processing fewer claims, and they’re probably right!
Medical insurance payments might be a different story, but if you can’t pay, call them and ask what they can do for you. The same goes for medical providers who may have you on a payment plan.
In all cases, the magic word is negotiate. If you’re in a spot where you can’t come up with the cash to pay in full, or pay at all, communicate your needs, and chances are you’ll get them met. At the very least, you’ll have it on record that you tried, and didn’t just default on your responsibilities.
There’s lots of help in your neighborhood
Like we said at the beginning of this article, this whole mess has brought out a lot of really good people. One obvious example of this is FindHelp.org, a website created and launched to distribute valuable information about getting help in this crisis. Just enter your zip code, and you’ll find resources for food, housing, essential supplies, transit, health, money, care, education, jobs, and even medical and legal assistance.
After entering your zip code, a map will come up with resources in your neighborhood so you’ll know where to find them. With the situation drivers are dealing with right now, seeing this much effort into getting help to the right people feels especially encouraging.
Support yourself
Drivers are very motivated people, and for many, it hurts to be out of work and out of money. Be kind to yourself during this time. Rather than falling into a state of panic or despair, rise to the occasion and get busy. Do your research, fill out the applications, and make the calls you need to make in order to keep your head above water until the crisis is over.
Gridwise app wants to support you in every way possible, and we know the best way to do that is helping drivers connect as a community. If you have comments about this article, or more suggestions about places for drivers to get financial help, leave us a comment and get the conversation started.
But remember, you can’t leave a comment or get a new tip until you download the app. So do it now.
