5 Tips for Navigating Your Way Through the Paycheck Protection Program (PPP)

1. 1) Create a Seperate Account for the Funds.
2. 2) 75 Percent of the Funds Go to Payroll.
3. 3) The Remaining Funds Have to Be Spent on Specific Things.
4. 4) Understand the Loan Forgiveness Process.
5. 5) The Loan Forgiveness Total is Not a Given.

Should I use my EIN or SSN for PPP loan?

First draw PPP borrower and they have an Employer Identification Number (EIN), they must use an EIN to apply for a loan. If they do not have an EIN, they can use their Social Security Number (SSN). Second draw PPP loan borrower the priority is to match the number that was used for the first draw PPP.

Does a side business qualify for PPP?

As a sole-proprietor who has filed the appropriate 1040 Form on your tax return in 2019, you will be able to demonstrate that your side-hustle is, in fact, a small business, and you should be able to proceed with your PPP loan application.

Can a partnership apply for a PPP loan?

As such, it appears that LLCs and partnerships may now apply for loan amounts using calculations that include the self-employment income of members and partners who are active in the business of the LLC or partnership.

How can I get a PPP loan for freelancing?

To calculate your loan amount, find line 31 on your 1040, your net income from freelancing. Unfortunately, if you were in the red last year and this number is negative, you won’t qualify for a PPP loan. If this number is more than $100,000, reduce it to $100,000, which is the cap.

How is self employment reported in a PPP loan?

Instead, the self-employment income of general active partners may be reported as a payroll cost, up to $100,000 annualized, on a PPP loan application filed by or on behalf of the partnership.

Is the Small Business Administration going to stop issuing PPP loans?

The U.S. Treasury Department has indicated that unless Congress authorizes additional funds for the PPP, it would instruct the Small Business Administration to cease authorizing pending or new PPP loan applications, as of today. Although it is likely that Congress will extend PPP funding, the timing of such legislative action is in doubt.