Start a Business Using Your Unemployment Money

Start a Business Using Your Unemployment Money

Due to the Covid-19 virus many Americans are receiving unemployment compensation right now. That could be an excellent opportunity for you to start a business.

Individual’s collecting unemployment can start a business and it is a workable option supported by the Department of Labor and several states.

Self-Employment Assistance Program (SEAP)

If you’re one of the millions of people receiving or applying for unemployment insurance, visit your state’s labor department website. Look to see if the Self-Employment Assistance Program (SEAP) is offered. Next, look at the criteria for applying to see if you are eligible. 

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Set up Your Business 

SEAP will allow you to work on setting up your business while collecting weekly unemployment checks and you won’t need to actively look for work while on the program. 

If your state’s labor department website doesn’t offer it, unemployment insurance payments can still be used to start your business. However, any money earned from the business must be reported and will be deducted when you make weekly UI claims. This same rule would apply if you took a part-time job, so working on your business and getting paid would be considered part-time work. 

Effects on Unemployment Benefits

If you start earning money from your new business, that cash will not be deducted from unemployment payments while you’re on SEAP. Additionally, there are online instructional videos for support and training. You can also get more training with a business consultant. 

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Starting your own business while collecting unemployment benefits could affect your eligibility if you make money from the business. A person who accepts a part-time job while collecting weekly benefits must report the income to the state unemployment office.

Business Planning

Before you start a new business, you want to make sure it’s going to be right for you and for the market. Research everything you need to do before your start your own business. Understand rules, regulations and laws and select the right business entity. Most importantly create a business plan, failing to plan is planning to fail.

Can you collect unemployment if you Already own a business?

Yes, if you have been paying your unemployment insurance on yourself, you can still collect. However, it will require more than normal proof of your unemployment since the unemployment administration believes that a person that owns their own business controls their business and whether they are earning wages or have employment available.