Sole proprietors and the PPP As long as your business was operational prior to February 15, 2020, you can apply to the Paycheck Protection Program. You will need to provide a Form 1040 Schedule C for either 2019 or 2020, depending on which year you used to calculate your loan amount.

Can a sole proprietor pay himself with PPP?

The PPP is designed to save jobs and wages. But owners of sole proprietor businesses (including independent contractors) do not pay themselves W-2 employee wages. Instead, they get passthrough income, referred to by the PPP program as owner’s compensation.

Can a sole proprietor apply for a PPP loan?

Previously, sole proprietors were able to apply for a PPP loan using their 2019 or 2020 net income as reported on a Schedule C. But changes were made on March 3, 2021 that affected the PPP loan calculation process. There are now two calculations depending on if you have payroll.

When is the deadline to apply for a PPP loan?

If you want to apply for a PPP loan, you currently have until May 31, 2021, and it seems unlikely the deadline will be extended. The government will allow time after that date for loans to be approved, but it’s a smart idea to start your application as soon as possible.

How long is an application for a PPP?

As government programs go, the PPP application is surprisingly short. No, really, it’s only two pages long. Your specific lender may have particular document requirements, but you should be prepared to provide tax documents, organizational documents, and government-issued identification.

When do the new PPP rules come out?

February 23, 2021 – The SBA has announced changes to the PPP, including a revised funding formula for sole proprietors, independent contractors, and the self-employed. We will update this article when the SBA releases further guidance on the new rules.