How To Apply For The Ppp Loan As A Sole Proprietor

09 Feb, 2021

There is one application form for first-time PPP loans and a different form for second draw PPP loans. This will be your PPP loan amount.

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Open a Chase business checking account here or at your local branch if you dont have one.

How to apply for the ppp loan as a sole proprietor. Im super happy that Paypal came through and fast. UPDATE on 4232020 - I received all PPP loans that I applied for. I also received 1k for the EIDL.

The top part of the form shown below provides the fields you fill in. Sole proprietors who are married. It may take up to 10 days upon account opening before you are able to apply for a PPP loan.

You may be eligible for a second draw provided your business does not employ more than 300 employees has used or will use the full amount of the first PPP and can demonstrate at least a 25 percent reduction in gross receipts in the first second or third quarter of 2020. Completed PPP Application Form. However since sole proprietors usually dont have payroll their PPP loan is instead based on 2019 net profit as reported on the 2019 Schedule C tax return divided by 12.

If you are running payroll costs your PPP loan calculation requires a few more steps. Employer paid health insurance premiums included in Schedule C line 14 retirement benefits included in Schedule C line 19 and unemployment taxes paid on employees are. If a sole proprietor employs no W-2 employees the maximum first draw PPP loan equals 20833.

The new round of PPP loans offer a second draw for harder-hit businesses that received PPP funding in 2020. To receive that loan amount the sole proprietor needs to generate at least 100000 in gross income in either 2019 or 2020 You provide a copy of your tax. The forgivable portion is equal to 25 months worth of their 2019 net profit.

Bank account information - You will need your bank account number and routing number. Add the sole proprietors 2019 Schedule C line 31 net profit up to 100000 to 2019 gross wages paid to employees up to 100000 max per employee to calculate the gross earnings portion of the loan amount calculation. When it comes time to apply for forgiveness sole proprietors can claim Owner Compensation Replacement which allows them to automatically claim a portion of their PPP loan as lost profit.

Applying for PPP Loan Once you have your number you grab a copy of the PPP Loan applicationfrom either the Treasurygov or the SBA website. Check Yes or No for all questions on the form. Tax documents for either 2019 or 2020 - Sole proprietors and independent contractors should use form 1040 Schedule C.

Multiplying this by 25 will give you your PPP loan amount. Include your contact name and email address. Notice that you provide your name and address and your taxpayer identification number.

In essence the PPP loan should be roughly ten weeks worth of 2019 net profit. To find your average monthly payroll expense take your gross income up to a maximum of 100000 and divide it by 12. If you are using 2020 to calculate payroll costs and have not yet filed a 2020 return fill it out and compute the value.

Next in order for a sole proprietor to properly apply for the PPP loan it is absolutely required that they have their 2019 1040 Personal Tax Return filed and the accompanying Schedule C. If you run a sole proprietorship informally with a spouse you will only apply to the PPP once and your spouse would not be considered to have a salary through the business unless they were paid as a contractor prior to February 15 2020. Youll need an active business checking account to apply with us.

Sole proprietors with payroll costs. From your 2019 or 2020 IRS Form 1040 Schedule C you may elect to use either your line 31 net profit amount or your line 7 gross income amount. Heres a list of items to gather.

The application for sole proprietors and independent contractors has been greatly simplified. Take your average monthly payroll expense and multiply it by 25. You can apply on the 11 th business day.

This monthly average net profit is then multiplied 25 times to equal the PPP loan amount. Indicate your Business Type Independent Contractors and Sole Proprietors have slightly different document requirements. Starting as soon as Monday sole proprietors independent contractors and self-employed individuals may apply for a PPP loan equivalent to the figure listed on line 7.

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