Start A Ppp Loan Application – With the second stimulus package came a top-up of the popular Paycheck Protection Program (PPP) loan. This means access to fully forgivable loans for all small businesses with payroll or self-employment income. If you are applying for PPP for the first time, it is considered a first draw PPP loan. If you already got a PPP loan in 2020, see our guide to applying for your second PPP loan.
Editor’s Note: On Tuesday, May 4th PPP ran out of general funding and the SBA stopped accepting new PPP loan applications. Funding reserves are still available for community financial institutions that lend to businesses run by women, minorities and underserved communities. In addition, funding remains reserved for applications previously submitted but not yet reviewed by SBA. If you have already submitted your loan application, however, this does not guarantee you funding.
Start A Ppp Loan Application
Here, we will cover how you can apply and also walk you through the application form for your first PPP loan.
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If the following statements apply to your business, you are eligible to apply for your first PPP loan.
Whether it’s your local bank, Community Development Financial Institute (CDFI), or FinTech, there’s a PPP loan option that’s right for you.
Online lenders will provide you maximum ease of application. They are equipped to take your information through a streamlined online portal and review your application very quickly. Local banks are great options if you’re looking for a more personalized experience.
Form 2483 is the main form that most businesses will use. Form 2483-C is specifically for self-employed individuals who will apply for a PPP loan using their Schedule C gross or net income.
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If you are not filing with Schedule C, read on for more information on Form 2483. If you’re applying using Schedule C, go to our overview of Form 2483-C.
If you are not applying with Schedule C, apply with Form 2483. We will go to the application form box. We recommend that you download and follow the PPP Loan Application here. Check with your lender before filling the application. Some lenders will require you to submit your information through their online portal as opposed to submitting a paper application.
Start by choosing the business structure that best represents your business. Try to be as specific as possible. E.g.
You must provide both your business legal name and your DBA or tradename, if applicable. Your business’s legal name appears on any government form. The DBA or Tradename is what appears on bank statements or invoices if it is different from the legal name of your business. Your business address is also found in these documents.
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If you are not a self-employed person or a contractor, you must provide the year of establishment of your business. This must be consistent with the documents you file to make the business official.
You can find your NAICS code on a website like NAICS.com. NAICS codes are self-assigned meaning you choose the code that best suits your business rather than having it assigned to you. Start by searching keywords for what you do or find the NAICS code of a similar business.
Your EIN (Employer Identification Number), TIN (Taxpayer Identification Number), or Social Security Number (SSN) is found on a previous tax return. If you’re having trouble finding this information, follow the IRS steps to find your EIN here. Note that the SSN should be provided only if you do not have a business EIN or TIN.
Finally, provide the primary contact name, business phone and email address for the application. This will be who all future communications will be directed to.
Ppp Loan Forgiveness
Calculating your loan amount starts by finding your average monthly payroll costs. Your average monthly payroll expense can be calculated using one of the following:
Step 1: Add payroll costs for all employees whose principal place of residence is in the United States. Payroll expenses include:
If you are including your net or gross income as shown on Schedule C, use Form 2483-C.
Step 2: Subtract any compensation paid to the employee in excess of $100,000. This step is necessary because the PPP imposes a cap on salary of $100,000 per employee. For example, if you have two employees earning $120,000 a year, deduct $40,000 from your total salary.
Smartbiz Ppp Loan Application Customer Tutorial On Vimeo
Step 3: Divide the total amount from Step 2 by 12 months and put it in the Average Monthly Payroll box.
Once you have your average monthly payroll cost, multiply it by 2.5. This will be your loan amount. The exception is if you are refinancing with your PPP loan if you have an EIDL loan. To be eligible to do this, you must have received your EIDL loan between January 31 and April 3, 2020. Do not include your EIDL advance, as the advance does not need to be repaid.
The PPP loan amount is capped at $2 million. Enter the lower of your calculated loan amount and $2 million dollars in your loan request amount box.
Add all employees at all locations and affiliates. There are three main cases in which your business and another business will be considered ancillary:
When Can I Submit My Ppp Loan Forgiveness Application?
Check all applicable boxes. The purpose of a PPP loan is to secure a paycheck. If you do not select “Payroll Expenses” in this section, your application may be rejected.
List all members of ownership who own 20% or more of the business. If you have more owners than there is room on the application, attach them as separate sheets.
This section is completely voluntary and will be used for reporting purposes only. Any information you provide here will not affect your loan application.
Answer each question and start where indicated. Answering yes to questions 1, 2, 5, or 6 will mean you are ineligible for a PPP loan.
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On page three of the application form, there are 10 statements. Each statement must be signed to certify that you are applying in good faith that these statements apply to your business. Signing any of these statements later found to be false is punishable by imprisonment or fine.
If you are applying with Schedule C, apply with Form 2483-C. We will go through the application form box by box. We recommend that you download and follow the PPP Loan Application here. Check with your lender before filling the application. Some lenders will require you to submit your information through their online portal as opposed to submitting a paper application.
Select the box that best describes your business. For example, if you do contract work on the side or work for a business like Uber, choose an independent contractor. Or if your business is a full-time gig, choose Sole Proprietor. If you are not sure, you can also choose self-employed person.
Provide the primary contact name, business phone and email address for the application. This will be who all future communications will be directed to.
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This can be taken directly from line 7 of your Schedule C. You can use 2019 or 2020 Schedule C for your application. If you haven’t filed a 2020 Schedule C, you can draft one for filing purposes, but it must be tax-ready (meaning completed and ready to file).
Select 2019 or 2020, the same year you will use Schedule C to apply.
If you don’t have an employee, you can put one in this box. Otherwise, provide the head number of all employees, including yourself, even if you are not on the payroll at the business.
There are two sections for calculating your PPP loan amount: one for businesses with employees and one for businesses without.
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Start with your gross income from your 2019 or 2020 Schedule C. This amount is reported on line 7. Put this amount in box A.
In box B, divide this value by 12. If the value is greater than $8,333.33, you must use $8,333.33. Multiply box B by 2.5 and use that value to fill in box C. This will be your PPP loan amount.
Start by calculating your gross income minus any payroll expenses reported on a 2019 or 2020 Schedule C. This can be found by taking the amount entered on line 7 and subtracting the amounts on lines 14, 19, and 26. Put this amount in the box. a.
In box B, divide this value by 12. If the value is greater than $8,333.33, you must use $8,333.33.
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In Box C, you must report your average payroll costs. You can review how to calculate average monthly payroll expenses in Part 2 of our Form 2483 overview above.
Finally, add the B and C boxes together. Multiply this amount by 2.5 to find your PPP loan amount. The PPP loan amount is capped at $2 million. Enter the lower of your calculated loan amount and $2 million dollars in your loan request amount box.
Select all that apply. Even if you have employees, payroll costs should be investigated
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