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The Paycheck Protection Program (PPP) is an excellent coronavirus relief resource for small business owners. The Entrepreneur Fund can help you understand the program, determine your eligibility, calculate how much you could receive, and help you prepare your application, whether you get a PPP loan at EF or another lender. The resources below will help you navigate the PPP program at any stage.

Still have questions? Complete our PPP Inquiry Form below to connect with Business Advisor to help with your questions. 


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What is PPP?

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PPP Loan Eligibility

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Calculate Your PPP Loan

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Prepare Your Application

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You've heard about PPP, but don't quite understand what it is? You're not alone. We're here to help.

Whether you are applying for your first or second PPP loan, there are certain criteria you need to meet in order to be eligible to apply.

Are you eligible for a PPP loan and want to know how much you qualify for? We have tools and resources to help you calculate your PPP loan.

Ready to apply? If you are applying for a PPP loan with EF or another lender, you'll need to have the same items. We have resources to help you get prepared.

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    General PPP Questions

    What is the Paycheck Protection Program (PPP)?

    The Paycheck Protection Program (PPP) provides 100% federally guaranteed loans to small businesses. You can receive funds to pay up to 24 weeks worth of payroll costs, including benefits. Funds can also be used to pay interest on mortgages, rent, utilities, operations and supplier costs, property damage and worker protection expenditures.

    • PPP funding used correctly for the above mentioned purposes can be forgiven (i.e.: you don’t have to pay your loan back).
    • Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness is reduced if full-time headcount declines, or if salaries and wages decrease during the loan period.
    • The PPP loan program originally opened in March 2020 and later closed. In January 2021, the PPP reopened for a second round, allowing eligible businesses to apply for their first or second PPP loan.
    [fa icon="plus-square"] What is a "forgivable loan"?

    If you meet the conditions of the PPP loan, it can be forgiven or turned into a non-taxable grant to your business.

    [fa icon="plus-square"] How does loan forgiveness work?

    PPP Loans may qualify for full loan forgiveness if during the 8- to 24-week covered period following loan disbursement:

    • Employee and compensation levels are maintained
    • The loan proceeds are spent on payroll costs and other eligible expenses; and
    • At least 60 percent of the proceeds are spent on payroll costs

    A PPP borrower can apply for forgiveness once all loan proceeds for which the borrower is requesting forgiveness have been used. You can apply for forgiveness any time up to the maturity date of the loan. If you do not apply for forgiveness within 10 months after the last day of the covered period, then PPP loan payments are no longer deferred, and you will begin making payments on your PPP loan.

    [fa icon="plus-square"] What can a PPP loan be used for?

    At least 60 percent of the PPP loan must be used to fund payroll and employee benefits costs.

    The remaining 40 percent can be spent on:

    • Mortgage interest payments

    • Rent and lease payments

    • Utilities

    • Operations expenditures such as software and accounting needs.

    • Property damage costs due to public disturbances not covered by insurance

    • Supplier costs such as cost of goods sold

    • Worker protection expenditures to be COVID compliant

    If you stick to these guidelines, you’ll be able to have 100% of the loan forgiven (effectively turning it into a tax-free grant).

    [fa icon="plus-square"] Where can I apply for a PPP loan?

    If you have an established relationship with a bank, you should reach out to the small business banker you work with to see if they are providing PPP loans and if you would qualify. 

    If you do not have a bank relationship, the Entrepreneur Fund is a PPP lender. In order to be eligible for a PPP loan through EF your business must be in our service region and meet all the PPP loan eligibility requirements outlined below. At this time, we are prioritizing our PPP funds for:
    • Sole proprietors
    • Food & accommodation industries; and
    • Diverse-owned businesses.

    If you are a match, please complete the PPP Inquiry Form below. 

    If these options aren't a fit...

    You can also check out the SBA’s Lender Match tool to find an eligible SBA 7(a) lender.

    More questions? Fill out the PPP Inquiry Form below.
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    PPP Loan Eligibility

    Whether you are applying for your first or second PPP loan, there are certain criteria you need to meet in order to be eligible to apply.

    PLUS The eligibility criteria has changed from the first round in 2020.

    Is my business eligible to receive a PPP loan?

    Paycheck Protection Program loans are farther reaching than SBA disaster loans. Small businesses, sole proprietorships, independent contractors, and self-employed individuals are all eligible.

    • Sole proprietorships will need to submit a Schedule C from their tax return filed (or to be filed) showing the net profit from the sole proprietorship.

    • Independent contractors will need to submit Form 1099-MISC (now 1099-NEC in 2020) in addition to their Schedule C.

    • Self-employed individuals will need to submit payroll tax filings reported to the Internal Revenue Service.

    [fa icon="plus-square"] I have NOT received a PPP loan in the past. Am I eligible now?

    First draw PPP loans

    If the following statements apply to your business, you are eligible to apply for your first PPP loan in 2021.

    • Your business was operational before February 15, 2020
    • Your business is still open and operational
    • You have no more than 500 employees
    • If your business has multiple locations, you have no more than 500 employees per location
    [fa icon="plus-square"] I HAVE received a PPP loan. What do I need to be eligible for a second draw?

    Second draw PPP loans

    If the following statements apply to your business, you are eligible to apply for your second PPP loan in 2021.

    • You have used up your first PPP loan
    • Your business was operational before February 15, 2020
    • Your business is still open and operational
    • You have no more than 300 employees
    • If your business has multiple locations, you have no more than 300 employees per location
    • You can show a 25% or greater reduction in gross revenue which can be shown in one of two ways:
      • Comparing your annual gross revenue as reported on your tax return in 2020 to 2019
      • Comparing your gross revenue in any quarter in 2020 with your revenue in the same quarter of 2019

    For example, if a business wants to use the second quarter (Q2) of 2019 where they recorded $20,000 in gross revenue, they are eligible if they recorded a gross revenue of $15,000 or less in Q2 2020.

    [fa icon="plus-square"] How do I calculate a 25% reduction in revenue for PPP 2?
    You can show a 25% or greater reduction in gross revenue which can be shown in one of two ways:
      • Comparing your annual gross revenue as reported on your tax return in 2020 to 2019
      • Comparing your gross revenue in any quarter in 2020 with your revenue in the same quarter of 2019

    For example, if a business wants to use the second quarter (Q2) of 2019 where they recorded $20,000 in gross revenue, they are eligible if they recorded a gross revenue of $15,000 or less in Q2 2020.

    [fa icon="plus-square"] When calculating a 25% reduction, what are gross receipts?

    What are gross receipts?

    Gross receipts is the total amount of money your business has received in a given period.

    The SBA provides a detailed explanation on what’s included in gross receipts:

    Receipts means all revenue in whatever form received or accrued from whatever source, including from the sales of products or services, interest, dividends, rents, royalties, fees, or commissions, reduced by returns and allowances.

    You can find your gross receipts by looking at line 1 or 1C of your respective tax return. You can also find your gross revenue and returns and allowances by looking at your income statement.

    Do not include any relief received in 2020 in your gross receipts.

    [fa icon="plus-square"] What if my business opened in 2020?
    If a business started in 2020 and was operational on February 15, 2020, it is eligible for a second PPP loan. You must use Q1 2020 as your comparison period. The 25% reduction can be shown using Q2, Q3, or Q4 2020.
    [fa icon="plus-square"] What could disqualify me from being eligible?

    General disqualifiers for the PPP loan

    If any of the following statements apply to your business, you are not eligible for any PPP loan.

    • You were not in operation on or before February 15, 2020
    • You only employ household employees such as nannies or housekeepers (this is not considered a business)
    • An owner of 20% or more of the business is incarcerated, on probation or parole, or has been convicted of a felony within the last year
    • You, or any business owned or controlled by you or any of your owners, is delinquent or has defaulted on a loan from the SBA or any other Federal agency within the last seven years
    • You or your business is bankrupt or is currently in bankruptcy proceedings
    • You are an officer or key employee of the lender you are applying with, or a close relative of one (you may only apply for the PPP with an unaffiliated lender)
    • Your business is a hedge fund or private equity firm
    • You do business in an industry that is generally not eligible for SBA 7(a) loans, such as speculation or multi-sales distribution
    More questions? Fill out the PPP Inquiry Form below.
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    Calculate Your PPP Loan

    PPP loans are calculated using the average monthly cost of the salaries of you and your employees. If you’re a sole proprietor, your PPP loan is calculated based on your business’ net profit.

    The loan calculation itself requires you to use your annual salary, and the annual salary of any W2 employees whose primary residence is the United States.

    The maximum amount you can receive is your monthly average payroll cost in 2019, 2020, or the one year period before the application. Multiply it by 2.5, up to a maximum of $2 million. For businesses in the food and accommodation industries, you are eligible for 3.5 times your average payroll costs, also with a maximum of $2 million.

    If you are a: Your salary will be: Other payroll costs you can include: Downloadable Tools
    1099 contractor Your 2019 or 2020 net profit (max $100,000) as reported on your Schedule C (line 31). None.
    Sole proprietor Your 2019 or 2020 net profit (max $100,000) as reported on your Schedule C (line 31). U.S. annual employee salaries, including wages, commissions, tips, and state and local payroll taxes. Each employee is capped at $100,000 annually.
    Partnership Your 2019 or 2020 self-employment earnings as reported on your Schedule K-1 (line 14), then multiplied by 0.9235. You may include K-1 earnings as salary for each partner, up to $100,000. U.S. annual employee salaries, including wages, commissions, tips, and state and local payroll taxes. Each employee is capped at $100,000 annually. Worksheet for Partnerships
    LLC LLCs should use the Loan Sizing Worksheet that applies to their tax filing status in the reference period used to calculate payroll costs (2019 or 2020)—i.e., whether the LLC filed (or will file) as a sole proprietor (self-employed), a partnership, or a corporation in the reference period.


    S corp Your salary as reported through a payroll service (max $100,000). Your salary may only be considered if it was paid through payroll while remitting payroll tax. U.S. annual employee salaries, including wages, commissions, tips, and state and local payroll taxes. Each employee is capped at $100,000 annually. Worksheet for C-Corps and S-Corps
    C corp Your salary as reported through a payroll service (max $100,000). As a C corp, your salary may only be considered if it was paid through payroll while remitting payroll tax. U.S. annual employee salaries, including wages, commissions, tips, and state and local payroll taxes. Each employee is capped at $100,000 annually. Worksheet for C-Corps and S-Corps

     

    How are PPP loans are calculated?

    PPP loans are calculated using the average monthly cost of the salaries of you and your employees. If you’re a sole proprietor, your PPP loan is calculated based on your business’ net profit.

    The maximum amount you can receive is your monthly average payroll cost in 2019, 2020, or the one year period before the application. Multiply it by 2.5, up to a maximum of $2 million.

    SBA PPP Loan Sizing and documentation requirements vary by entity type. A general outline is below along with templates created to help you determine your maximum PPP request. 

    [fa icon="plus-square"] How do I calculate salary as an owner?
    Your salary as an owner is defined by the way your business is taxed. If you are taxed as an LLC, your salary is directly linked to your business’ profit, and is the amount you paid self-employment tax on in 2019. If you are taxed as a corporation, your salary is dependent on running payroll for yourself—meaning you must be remitting federal and state payroll taxes. Corporations paying owners through owner draws won’t qualify for the PPP.
    [fa icon="plus-square"] What if I am in the food and accommodation industries?
    For businesses in the food and accommodation industries, you are eligible for 3.5 times your average payroll costs, also with a maximum of $2 million.
    [fa icon="plus-square"] What if I am a seasonal employer?

    If you are a seasonal employer, the monthly average payroll cost will be calculated differently. You can use any 12-week period between February 15, 2019 and February 15, 2020.

    More questions? Fill out the PPP Inquiry Form below.
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    Prepare Your Application

    Whether you are applying with the Entrepreneur Fund or another lender, follow the list below to prepare your application. 

    First Draw Application Prep

    First Draw Application Preparation

    1. Review the SBA program guidelines and summary guide here to ensure you meet all eligibility requirements.
    2. Complete the appropriate worksheet below to calculate the size of your loan. This is based on the SBA PPP Loan Sizing Guidance.
      If you are a: Downloadable Tools
      1099 contractor
      Sole proprietor
      Partnership Worksheet for Partnerships
      S corp Worksheet for C-Corps and S-Corps
      C corp Worksheet for C-Corps and S-Corps
      LLC LLCs should use the Loan Sizing Worksheet that applies to their tax filing status in the reference period used to calculate payroll costs (2019 or 2020)—i.e., whether the LLC filed (or will file) as a sole proprietor (self-employed), a partnership, or a corporation in the reference period.


    3. Download, complete, and sign the SBA Form 2483 Paycheck Protection Borrower Application.
    4. Organize the documents you will need to provide with your application.
      1. Photo Identification: Unexpired government issued photo ID (can be a scan or digital image of the the ID)
      2. Completed Loan Sizing Worksheet (from Step 2)
      3. Completed and signed SBA Form 2483
      4. Document(s) to support your Average Monthly Payroll figure
      5. Document(s) to prove in operation
    Second Draw Application Prep

    Step 1. Check with your existing PPP lender first to see if they can assist with your Second Draw. 

    Step 2. Make sure you that you’ve reviewed the program guidelines and meet the Second Draw eligibility requirements:

    • Received a First Draw PPP loan, has fully used that loan, and used it solely on eligible expenses
    • Has 300 or fewer employees
    • Experienced a 25% or greater revenue reduction in any 2020 calendar quarter compared to the corresponding quarter in 2019

    Step 3. Download, complete, and sign SBA Form 2483-SD PPP Second Draw Borrower Application (preferably electronically as you will need to upload it to our online application form in step 4). Here are a couple tips based on common questions we’ve seen:

    i) Make sure you initial all applicable questions on the SBA form.
    ii) NAICS Code: Your NAICS or North American Industry Classification System Code is a standard code for the industry your in. Typically you can find this on your business tax return, search for it here, or simply google  “barber shop NAICS code” (swap out with your business type)

    Step 4. Organize the following supporting documentation:

    i) Photo Identification: Unexpired government issued photo ID (can be a scan or digital image of the the ID)
    ii) Financial documents supporting 25% reduction in revenue: For Second Draw loans over $150,000, these are required. For loans $150,000 or less, they are optional with your application but must be submitted on or before the date of your Second Draw forgiveness application. Suitable Documentation may include relevant tax forms, including annual tax forms, or, if relevant tax forms are not available, quarterly financial statements or bank statements.
    iii) Financial documents used to determine your Average Monthly Payroll figure: They are required for all new client applicants.  Here are a few options, with the most preferable being listed first: Tax Returns, annual 940 or quarterly 941 statements, Schedule C (for businesses filing as as Sole Proprietor), K-1 filings (for partnerships), or Payroll Service Records (ADP, Gusto, etc.). *Important: make sure your backup documents clearly support the Average Monthly Payroll figure on your SBA Form 2483-SD. If we are unable to easily confirm this number, it will delay your application review and could jeopardize its ability to be approved while funding lasts. Review your calculations using this How To Guide from SBA.
    iv) NEW: Proof Business was In Operation on Feb. 15, 2020: You will need to provide a document that demonstrates your business was in operation on or around February 15, 2020. This can include a payroll statement that covers that date, a bank statement, an invoice, or other suitable document. SBA has added this requirement to reduce fraud and ensure PPP relief is only going to operational businesses.
    More questions? Fill out the PPP Inquiry Form below.
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    Still have questions? Interested in a PPP loan?

    If you still have questions or are interested in applying for PPP with the Entrepreneur Fund, please fill out the PPP Inquiry Form below. Depending on your request, we will connect you with the appropriate staff member to help. In order to be eligible for a loan with EF your business must be in our Service Region

    Please note, we are currently prioritizing our PPP lending to:

    • Diverse-owned businesses
    • Food service and accommodations industries
    • Sole proprietors

    All are welcome to inquire about a PPP loan.


    PPP Inquiry Form