Sole Proprietor - Independent Contractor - Self Employed

Step 1

We recommend that you pull these documents together before you start the application.

If this is your 1st PPP Loan

In most cases you are allowed to use either 2019 or 2020 payroll costs to calculate your loan amount. *Wherever you see “2019 or 2020”, choose the year that you are using for payroll costs.

The SBA’s intention is to provide those businesses hurt by the pandemic with a forgivable loan valued at two and one half months of payroll costs. In order to calculate that loan amount, you must calculate your total Payroll Costs. You will need the following:
• 2019 or 2020 IRS Form 1040 Schedule C (if you use 2020 numbers but have not yet filed a 2020 tax return, download a 2020 Schedule C from the IRS and create a “draft” version using 2020 numbers. If you have no employees, your total payroll cost is the money you paid yourself, (Net Income on line 31, capped at $100,000 for the PPP loan calculation)
• If you are an Independent Contractor grab your 2019 or 2020 IRS Form 1099-MISC or Form 1099-K that you received, to support the number provided in Gross Sales on Schedule C
• February 2020 bank statement, establishing you were in operation on February 15, 2020.
• Picture of front and back of your driver’s license

**If you have employees, then you ALSO need to provide:
• 2019 or 2020 Payroll summary report (or W2’s on all employees), which reflect all employee annual wages, taxes withheld, etc. If you include contributions for healthcare and/or retirement in your payroll costs, then your report must include those figures.
• If you include state unemployment insurance tax in your payroll costs, provide a copy of the form you submitted to your state.
• 2019 or 2020 IRS Form 940 or 941 forms for all 4 Quarters
• A payroll statement or 941 form from Q1 2020 to establish you paid employees at that time.

If this is your 2nd PPP Loan

In most cases you are allowed to use either 2019 or 2020 payroll costs to calculate your loan amount. *Wherever you see “2019 or 2020”, choose the year that you are using for payroll costs.

To be eligible for a 2nd draw PPP loan, you must have experienced a 25% drop in Gross Revenue in either the entire year of 2020 or in any single quarter as compared to the corresponding quarter in 2019. If your loan is lower than $150,000 then you can wait to show evidence of this drop when you apply for forgiveness. However, you ARE required to provide the gross revenue figures that you are comparing along with the application. Since you have to come up with those numbers anyway, we recommend you go ahead and provide Profit and Loss statements, or some form of comparison sheet, to substantiate your eligibility with the application.

The SBA’s intention is to provide those businesses hurt by the pandemic with a forgivable loan valued at two and one half months of payroll costs. In order to calculate that loan amount, you must calculate your total Payroll Costs. You will need the following:
• 2019 or 2020 IRS Form 1040 Schedule C (if you use 2020 numbers but have not yet filed a 2020 tax return, download a 2020 Schedule C from the IRS and create a “draft” version using 2020 numbers. If you have no employees, your total payroll cost is the money you paid yourself, (Net Income on line 31, capped at $100,000 for the PPP loan calculation)
• If you are an Independent Contractor grab your 2019 or 2020 IRS Form 1099-MISC or Form 1099-K that you received, to support the number provided in Gross Sales on Schedule C
• February 2020 bank statement, establishing you were in operation on February 15, 2020.
• Picture of front and back of your driver’s license

***If you have employees, then you ALSO need to provide:
• 2019 or 2020 Payroll summary report (or W2’s on all employees), which reflect all employee annual wages, taxes withheld, etc. If you include contributions for healthcare and/or retirement in your payroll costs, then your report must include those figures.
• If you include state unemployment insurance tax in your payroll costs, provide a copy of the form you submitted to your state.
• 2019 or 2020 IRS Form 940 or 941 forms for all 4 Quarters, (the SBA does not allow more than $100,000 for any one employee)
• A payroll statement or 941 form from Q1 2020 to establish you paid employees at that time.

Step 2

Your loan amount:
After adding up all of those payroll costs (your net income, employee wages, healthcare contributions, retirement contributions, and state unemployment insurance tax) you then divide by 12 months to get an Average Monthly Payroll (seasonal employers have different rules). Then, multiple the Average Monthly Payroll by 2.5 months. That result is the loan amount you are eligible to apply for. Have these figures ready for the application.