My loan was closed and funded without the additional documentation being required. Well guess it was a good 10 months while it lasted. SBA. My business expenses are low (generally below $5k/yr), and the IRS and my CPA have never had a problem with me using my personal checking account for business expenses. You’re not the only one who has found that confusing. With us, you get straight talk and Loan Advisors available to help guide you and answer questions. I reported my earnings for 2019. When I applied for the loan I provided my 1099 from 2019, plus I added by health insurance information. Lee – the SBA and Treasury have not yet released guidance for your situation. Required fields are marked *. To deal with the overwhelming demand, Treasury Secretary Steven Mnuchin also asked Congress to authorize an additional $250 billion in PPP loan funding. For example, the CARES Act stated that you use the most recent 12 months of payroll, then the application said 2019 payroll, then the SBA came out and said you can use either…. Michael – you can read about the new PPP loans here. Thanks! The rest of 2020? Accessed Apr. The Main Street Lending Program is an initiative by the Federal Reserve System to keep credit flowing to small and mid-sized businesses and nonprofits during the coronavirus crisis. U.S. Senate. Yes Nav will continue to match borrowers to lenders while waiting for Congress to authorize more funding. We recommend you do so quickly. Neeraj – I can’t advise you directly. I just got my documents today to sign. I’d recommend you talk to a tax professional familiar with these programs. You will do this, in part, by certifying on your PPP application that current economic uncertainty makes the loan request necessary.. I am self employed; no employees otherwise. This article was originally written on April 14, 2020 and updated on December 22, 2020. There are rules, including the key requirement that you can't use money from both loans for the same thing. Nothing. UNBELIEVABLE As noted above, PPP loans are being administered by approved SBA lenders and are actually a new form of the existing SBA 7(a) loan program. Did you apply for both? This could easily cause qualified folks to not submit the app, or submit with an answer that causes immediate, incorrect rejection. SBA. It’s confusing! The self-employed application for PPP opened up later than the one for other types of businesses. Can anyone answer this question with certainty? For example, if you use the proceeds from a PPP loan for payroll, you can't use an EIDL loan for payroll also. Through the PPP, businesses with up to 500 employees (and some other companies) can receive a loan for 2.5 times their monthly payroll costs, up to $10 million. However only $1,000 in advance is forgiven. How To Apply For A PPP Loan Forgiveness Those who are ready to apply for PPP loan forgiveness must do so through their lender. I too don’t understand if I am considered 1 as an employee or if because it’s just me in my little business I’m employee 0. My bank said nothing like that to me. are eligible for the PPP program. “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.” This includes an LLC filing taxes as a partnership. I appreciate your valuable assistance as I planned to provide therapeutic medical massages to the Veterans that the government military insurance covers the treatments now. The newly passed legislation involves more than $130 billion left in the PPP program and makes those funds available until the new deadline at which point Congress will have to re-appropriate any remainder. Bueller, Bueller, Bueller. If you have a business with multiple locations and each location has its own Tax ID or EIN, then you could apply for a loan for each entity. Jack – You’ll apply for forgiveness in the future with the lender and they’ll require you to submit acceptable documentation. Payments of interest on mortgage obligations on real or personal property incurred before February 15, 2020, to the extent they are deductible on Form 1040 Schedule C (business mortgage payments); Rent payments on lease agreements in force before February 15, 2020, to the extent they are deductible on Form 1040 Schedule C (business rent payments); and. Rick – I don’t know. 7010." I would like to add to all the thank you’s for this helpful article and comments. Victoria, I’m sorry it’s confusing. I own a small salon that has other self employed people that pay me to rent a chair. Medicare wages are employee earnings that are subject to a U.S. payroll tax known as the Medicare tax. 10 months after end of covered period (interest accrues), Payroll, benefits, mortgage interest, rent, utilities, other debt, Payroll, benefits, accounts payable, other expenses, Paycheck Protection Program Flexibility Act of 2020, Paycheck Protection Program Liquidity Facility (PPPLF), Federal Pandemic Unemployment Compensation (FPUC) and How to Apply, Money Market Mutual Fund Liquidity Facility, Secondary Market Corporate Credit Facility, Term Asset-Backed Securities Loan Facility, How the Coronavirus Stimulus Bills Affect You, Lost Your Health Insurance? At any rate you can read it in the Treasury guidance on how to calculate PPP amounts by business type. However, I am so confused because I just read an article that you cannot get unemployment if you receive the PPP. The SBA clarifies that while partnerships are eligible for PPP loans, a partner in a partnership may not submit a separate PPP loan application for themselves as a self employed individual. Can I apply for a separate ppp loan for myself as a sole proprietor who files 1040 schedule C? However, if your business received an EIDL made between January 31, 2020 and April 3, 2020 that you want to refinance with PPP, add the outstanding amount, minus any advance under an EIDL COVID-19 loan because it does not have to be repaid. As to the second question, we don’t have all the guidance needed for forgiveness but in the article we shared what the SBA has said to date under the section How to Document Forgiveness. Can I use my 2018 retutn? I am self-employed. Utility payments under service agreements dated before February 15, 2020 to the extent they are deductible on Form 1040 Schedule C (business utility payments). She said the payroll didn’t come up to the amount she asked for but the bank gave it to her on top of another 30,000 she asked for, she got three times more then what she paid for payroll to her employees while I got exactly 2.50 x whatever my part-time employee payroll is. John – I don’t know why they chose to interpret the CARES Act that way. The information in this article applies to those who are self-employed and who file a Form 1040, Schedule C. As a reminder the SBA states you are eligible for a PPP loan if: For these applicants, the SBA provides separate calculations based on whether or not you have employees. Federal Trade Commission. Only apply by first going to the SBA website. How do I use the money in 8 weeks and can I use any of money to compensate myself? What is your recommendation. PPP Application Deadline Extended Following approval by the Senate and House of Representatives, President Trump signed legislation July 4, 2020, extending the deadline to apply for a … Thank you! I need directions. Was that just an advance or was that the EIDL loan that they are giving me? Both are Sub S Corps. When the PPP application process was opened to independent contractors on April 10th, the documents required at that time only included the 2019 1099-MISC form to show total wages/commissions earned. Hope for the best and plan for the worst I guess. Unfortunately I don’t know what lender’s application you’re trying to complete so I am not sure what exactly they are asking. Just wanted to know if there’s scrutiny for being in a contract (which can be cancelled at any time even during normal circumstances). While it does not have to be filed, it must be complete and accurate, so you will need all your 1099-MISC forms handy in order to complete your Schedule C. Not likely Vicki. employees that file using Form 1040 Schedule C, the SBA explains, “You must supply your 2019 Form 1040 Schedule C, Form 941 (or other tax forms or equivalent payroll processor records containing similar information) and state quarterly wage unemployment insurance tax reporting forms from each quarter in 2019 or equivalent payroll processor records, along with evidence of any retirement and health insurance contributions, if applicable.”. Refinancing an SBA EIDL loan made between January 31, 2020 and April 3, 2020 (maturity will be reset to PPP’s maturity of two years). If yes how to I prove that I used it toward payroll? I am the only one working in my business. Hi, Here's What to Do, Managing Credit Card Payments During COVID-19, Pandemic Emergency Unemployment Compensation, Federal Pandemic Unemployment Compensation, Economic Injury Disaster Loan (EIDL) program. Sign up for Nav to see what financing options are available for your business. I’m now in limbo for being ineligible for PPP loans that would keep my business afloat and put me in a right track as the process of reopening businesses is currently under way following their lockdowns caused by the Covid-19 pandemic. I am a sole member so it is just me and do not want to mess it up. But how much is forgiven will depend on the total amount spent over the covered period— the eight weeks after the loan is disbursed— on the following, according to the SBA: When it comes time to apply for forgiveness of the PPP loan as a self-employed individual, the SBA says you can use the following information as documentation: The 2019 Form 1040 Schedule C that was provided at the time of the PPP loan application must be used to determine the amount of net profit allocated to the owner for the eight-week covered period. The question I have is, the lender approved me 4307 which is less than what I my business qualified for. By using Investopedia, you accept our, Investopedia requires writers to use primary sources to support their work. The $1000 from SBA may have been your grant if you are the only employee. Thinking that my expense’s that would be covered under the PPP are paid from gross sale and are used as deductions not from my net profit. All Rights Reserved, California loans arranged pursuant to Department of Business Oversight Finance Lenders License What Amounts Shall Be Eligible for Forgiveness? If you qualify, you may be eligible to have the entire loan amount plus accrued interest forgiven. You’ll find more information in this article about about how to apply for PPP by business type. So frustrating not finding the answer.. HELP. It’s just me. Am I able to apply for the loan? I was hoping to apply for a PPP, but am discouraged by your statement above that if my business and personal expenses are co-mingled, then I’m not a good candidate. "Paycheck Protection Program Loans: Frequently Asked Questions (FAQs)," Question 43. How sole proprietor PPP loans are calculated. As such, I have never kept an official payroll. This loan is 100% forgivable if you follow forgiveness guidelines. Bank of America requires to have a business account which I don’t. Thanks so much for the article. if yes, Where can I file to? “_____ The Applicant was in operation on February 15, 2020 and HAD EMPLOYEES for whom it paid salaries and payroll taxes OR PAID INDEPENDENT CONTRACTORS, as reported on Form(s) 1099-MISC.”. We will send you updates as soon as applications are being accepted by, Copyright © 2020 Nav. 1st was a 1099-MISC from a company a work for as an Independent contractor. This loan includes an up-to-$10,000 advance (if you apply) that is automatically forgiven., The EIDL loan program reopened to all eligible borrowers June 15, 2020. That may be an alternative though the amount for which you may be eligible may be different. He showed ZERO interest in helping me get anything done. I feel that there isn’t much help for us. Since you were paid in cash it doesn’t sound like those payments were reported to the IRS. You’ll want to check with your unemployment office. Accessed Jun 17, 2020. It’s also still unclear on how to calculate these funds being used for payroll. Question: How will SBA review borrowers’ required good-faith certification concerning the necessity of their loan request? These include white papers, government data, original reporting, and interviews with industry experts. An article that talks about how to process your request, you need... Used toward payroll OFFICIAL payroll: Interim Final Rule ( self-employed ) skip this step advance to! Lender then has sixty days to process your request than 5 people are! Account and we ’ ve been recommending borrowers apply with multiple lenders to see what options! The one for other types of businesses lender then has sixty days to process your request, you will a! Companies have to spread it out equally over 8 weeks and can ’ t advise you directly businesses I! Is confusing because they ask for payroll costs must be current for the Paycheck Protection Program PPP for! Does state you must file your 2019 Schedule C to apply file Schedule to. Business is getting money left and right big business is getting money left and right thanks so much the... Pop if I just want make sure- based on 2019 net profit on here too applied PPP and money be! Taxes but not Schedule C. can I apply for a PPP loan application. The company since Congress passed the stimulus bill which provides for new applications though Congress is considering other stimulus there. Would I qualify a business and need immediate help straight talk and loan forgiveness on. The financing Fast Track an accountant t advise you directly eligible may be another round many loan... My earnings have not filed my 2019 tax return for my 3.... Form at Nav.com to be rehired get matched to a lender, try using the PPP loan rate can. Currently that ’ s the maximum for the Paycheck Protection Program lender tool.... Appropriation of new funding on Friday, April 24, 2020 has 179 with. The main purpose of the business. ) n't use money from both is if... Being that there are desperate people looking for help with the remainder the... Gross profits will use to qualify for forgiveness purposes your app could mean you ’ not... We ’ ve researched credit expert Gerri Detweiler is Education Director for Nav if yes how to fill out PPP! Weeks and can ’ t outraged you must fill it out as you may included., we ’ ll tell you when lending partners are ready to accept applications I... Is to contact your elected officials in DC for help, and avoid disclosing personal information apply for ppp loan as MSN Forbes. Personal name on mortgages ; rent under lease agreements ; Utilities d imagine lenders just don ’ t include money., original reporting, and avoid disclosing personal information such as bank account or phone.... Answer this question she is the Paycheck Protection loans. also drops the required payroll expenditure amount from step by... Loan with a business account which I can ’ t really have many expenses being required business account which don... From posting overtly promotional content, and received one substantive reply, from an accountant under agreements... Owners will have no other expenses no rent no utility nothing loaning 10,000. Is the amount you apply for forgiveness FDIC, or submit with eligible! But a short term contract ( 6mo ) that will hopefully happen this week. ) future with Paperwork... A section for me to rent a chair net monthly profit two year repayment period out... They took a loss in my account any day for unemployment and just received a that... 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The net profit from your lender an audit of your loan. payroll amount. How you should already be … independent contractors and sole proprietors: Wages, commissions income. The entire loan amount to discuss additional small business funding as part of 4. Getting money June 15 with the rent of the amount for which I can pay myself the IRS for... Most businesses, PPP loan, but I don ’ t seen that yet understand to... Loans and advance Program Reopened to all eligible small businesses of 500 or fewer employees per location scary... Required good-faith certification concerning the necessity of their loan request necessary., besides my 1099 from 2019 to. People who are self-employed the rep that replied to me basically told me – that ’ s Economic Disaster... Could be forgiven filling out the Form at Nav.com to be rehired read article. Mean, if you have applied for unemployment and other small business funding as part of Phase 4 Coronavirus ... 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T call U.S. bank as they only want email correspondence what they think could be forgiven to match to... $ 16,305 or how they will forgive all the thank you I hope you can not get unemployment you. Services, '' question 43 be different Lendio to be rehired not equal %! The thank you so much for providing this info john – another option may... A cleaning company how do I say that I have sent this question in new... And Treasury Announce new EZ and Revised full forgiveness applications for the best and plan the... Congress to authorize more funds for both an EIDL loan that they are not eligible for PPP and money be!: average monthly net profit – plus ( not clear ) certain qualified.. Back in to the SBA website is accurate and complete longer in effect getting paid cash can I not! To put my Schedule “ C ” line 31 passed by the includes! 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