Coronavirus Resource Guide for Fashion Industry Businesses

Stimulus Benefits for Fashion Industry Businesses, Professionals, and Freelancers During the Coronavirus Crisis

In Fashion Features, Mingle Mentors by Shirin Movahed, Esq.

With the COVID-19 pandemic affecting everyone around the globe, industries of every sort are experiencing difficult times, and the fashion industry is no exception. As a Fashion and Business Law attorney, I’ve monitoring the updates to the CARES Act stimulus bill and detailing the benefits that fashion industry professionals, gig workers and freelancers should take advantage of as new funds are released. 

On April 16, 2020, the $349 billion allocated to the CARES Act ran out of money, but on April 24, an additional $484 billion has been set aside to fund small businesses and hospitals affected by COVID-19.  We highly recommend you apply as soon as you can as funds are expected to deplete again very quickly.

The following information was updated on April 29, 2020. 

Financial Resources for the Fashion Industry Provided by the Federal Government

Paycheck Protection Program

Small business owners can apply for the Paycheck Protection Program (PPP) for forgivable loans to help cover payroll, rent, mortgage payments, and utility costs. As long as all the company’s employees are kept on payroll for eight weeks and the funds are used for payroll, rent, mortgage interest, or utilities, then the loans will be forgiven.  Applications opened on Friday, April 3, 2020 and quickly ran out of funds but Congress has allocated another round of funding. 

If you weren’t able to get funding during the first round of the Paycheck Protection Program the good news is there’s an additional $310 billion of funding approved by the federal government on April 24th. This newly updated bill makes additional guarantees that at least $60 billion must be granted by small banks, community financial institutions, and credit unions to ensure that truly small, local businesses get a chance at funding.

Click here for more information about the PPP program. 

The highlights of the Paycheck Protection Program

  • The funding is meant to help retain workers, maintain payroll, and cover rent/mortgage/utility expenses.
  • Small businesses, sole proprietorships, independent contractors, and self-employed individuals can all qualify.
  • The loan covers expenses dating back to February 15, to June 30, 2020.
  • The loan can be forgiven and essentially turned into a non-taxable grant.

EIDL Program

These low-interest federal disaster loans for small businesses quickly ran out of funding in its first round. The newly approved bill provides an additional $60 billion to the program, including $10 billion to the EIDL emergency grant.

The highlights of Economic Injury Disaster Loan (EIDL)

  • Grant of $1000/employee up to maximum of $10,000 per business
  • The SBA’s Economic Injury Disaster Loan program provides small businesses with working capital loans of up to $2 million.
  • You can use this loan for typical day to day expenses such as mortgage payments, payroll, accounts payable, utility payments, or vehicle payments.
  • You cannot use this loan to refinance existing debt, to replace lost sales or profit, or fund purchases of equipment, vehicles, and supplies.
  • Loans that exceed $25,000 must be secured by collateral. The SBA will not decline a loan if you don’t have enough collateral but will ask for whatever collateral is available, which may include real estate owned by a business’ principals.
  • Removed previous requirement that you are not able to receive a loan from other sources

Click here for more information about the EIDL loan program.

SBA Express Bridge Loans

Have you applied for a Small Business Administration disaster loan but need cash, now? The Express Bridge Loan Pilot program authorizes SBA Express Lenders to provide emergency loans in amounts up to $25,000 while your small business applies for and awaits long-term financing through SBA’s direct Disaster Loan Program.

There is a catch, though—your small business must have an existing business relationship with an SBA Express Lender. Check with your banking institutions to see if they offer SBA Loans.

The highlights of the Small Business Administration disaster loan:

  • The small business must have an existing relationship with the funding bank prior to March 13, 2020.
  • Up to $25,000 in funding.
  • Fast turnaround.

Click here to learn more about an SBA Express Bridge Loan.

Employee Retention Tax Credit

You can be eligible for payroll tax credits on your 2020 federal taxes if you keep your employees on payroll, if you paid COVID-19-related sick leave for employees, or if you had to suspend operations.

The highlights of the Employee Retention Tax Credit

  • Employers with fewer than 500 employees are eligible for payroll tax credits, if they keep their employees on payroll throughout the COVID-19 crisis.
  • These tax credits can significantly lower your tax bill.
  • You cannot qualify for these 2020 federal tax credits if you’re also applying for the Paycheck Protection Program.
  • Relief is available for qualified wages paid after March 12, 2020, and before January 1, 2021.

2020 Stimulus Package FAQs for fashion industry businesses, professionals and freelancers. 

How big will this check be and how many payments will there be?

The majority of adults will receive a check for $1,200, which will come directly from the IRS.  Some will receive less, depending on their yearly salaries and tax returns. For those who have children under the age of 16, an additional $500 payment will be provided. So far, there is only one payment coming, however, according to the New York Times, there may be future bills seeking additional payments to individuals. 

The disbursement of these checks have not yet reached everyone. Please continue to be patient and check the status here.

How do know if you’ll get the full amount?

It all comes down to your income.  Single adults with Social Security numbers who have an adjusted gross income of $75,000 or less will be eligible for the full amount. Married couples that don’t have children and earn $150,000 or less will receive a total of $2,400. Taxpayers filing as the head of the household will get the full payment if they earned $112,500 or less.  

If you earn above those income figures, payments will decrease until it stops altogether for single people earning $99,000 or married people who don’t have children and earn $198,000. The Senate Finance Committee stated that a family with two children will no longer be eligible for any payments if the income surpasses $218,000.

You won’t be eligible for a payment if you are claimed as a dependent, even if you’re an adult. Everyone must have a valid Social Security number in order to be eligible. Although, there is an exception for those serving in the military.

Your adjusted gross income can be located on Line 8b of the 2019 1040 federal tax return.  If you haven’t filed your tax return for 2019 as a result of the automatic extension through July 15, then the IRS will base your eligibility on your 2018 tax return. 

Are college students eligible?

If they are claimed as a dependent on a tax return, then they are not eligible. Students under the age of 24 are usually dependents for taxing authorities if a parent pays for at least half of their expenses.

Benefits for the Gig Economy, Freelancers, Entrepreneurs, Non-profits and More

If you live or work in a state that has been declared a major disaster by the President of the United States, and you are an artist, entrepreneur, freelancer, service employee, or other occupation interrupted by the COVID-19 pandemic, then you may qualify for the Pandemic Unemployment Assistance (PUA) program through the CARES Act that came into effect on March 27, 2020.  This program provides unemployment benefits to individuals who may not otherwise qualify for unemployment benefits and have become unemployed or their self-employment has been lost or interrupted during this pandemic.

To check eligibility for the Disaster Unemployment Assistance (DUA) program click here.  For those who live in New York, you can click here for more information.  

If you’re unable to receive funding from the federal or state government, there are alternative resources available. Many large companies and industries have stepped up for the small business community, and we encourage you to look within your professional network for available grants. Here are some alternative options:

CFDA / Vogue Fashion Fund Fundraiser

The fashion industry isn’t just relying on the government for assistance. The CFDA has joined forces with the Vogue Fashion Fund to create the fundraising initiative, “A Common Thread, which provides designers space to share stories of how their businesses are being affected by COVID-19, while raising funds to help design houses large and small and the factories that cultivate their merchandise. Click here for more info. 

The Photographer Fund: Format is providing up to $500 in grants to impacted photographers.

Facebook Small Business Grants Program: Facebook is providing cash grants and ad credit to small businesses with 2–50 employees.

  • Applications will be open to cities on a rolling basis. Visit the site to see if it’s open for your city.
  • Must be a for-profit company that has been in business for over a year.

Apply here for the Facebook small business grants.

Google Ad Credits for Small and Medium-sized Businesses

CERF+ Emergency Assistance is providing up to $3,000 in grants to established artists working in a craft discipline.

Kiva has expanded its eligibility, increased the maximum loan size from $10,000 to $15,000 and introduced a six-month grace period on its zero-interest crowdfunded loans. For more Information click here.

Mainvest has introduced the “Main Street Initiative”. Existing bricks-and-mortar businesses negatively impacted by the virus that launch a funding campaign for a Mainvest revenue-based loan may be eligible for an immediate, $2000 zero-interest loan. For more information click here.

New York Community Trust Funds for Non-Profits

The New York Community Trust’s NYC COVID-19 Response and Impact Fund is offering loans and to NYC-based nonprofits struggling to meet the new and urgent needs that impact the city. Priority will be given to nonprofits addressing essential healthcare and food insecurity; however, arts organizations are also eligible.  Information and applications here

We’re Keeping You Informed

Fashion Mingle will continue to update this page as we learn more.  In the meantime, if you have a question regarding your business, contact me at Shirin Movahed, Esq.  As a lawyer and strategic legal business advisor,  I have been helping clients navigate through the eligibility requirements for the various relief programs available, as well as exploring alternative courses of action to manage their businesses through this period. Join Fashion Mingle’s global network to get connected to fashion industry professionals in your local fashion community.


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About Shirin Movahed, Esq.

Shirin Movahed, Esq has been recognized by Thomson Reuters as a New York Super Lawyer and one of the top female attorneys in New York. She has over a decade of experienced in financial, entertainment, consumer product, celebrity, fashion and art industry law. Shirin is a frequent guest speaker at universities, trade organizations, and cultural institutions on intellectual property rights.

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