The Paycheck Protection Program (PPP) is a loan program designed to provide financial assistance to small businesses during the COVID-19 pandemic. The program provides loans that can be used to cover payroll costs, rent, utilities, and other expenses.
To be eligible for a PPP loan, businesses must meet certain criteria, including:
- Have fewer than 500 employees
- Have been in operation for at least one year
- Have experienced a decline in revenue due to COVID-19
Businesses that meet these criteria can apply for a PPP loan through a participating lender. The application process requires businesses to provide certain documentation, including:
- For corporations, professional corporations, general partnerships, LLCs, and nonprofits:
- Color copy of government-issued ID (front and back)
- Organizational documents (e.g., Articles of Incorporation, Certificate of Existence)
- 2019 IRS Form W-3
- 2019 IRS Form 940
- W-2s for employees living abroad (if applicable)
- W-2s for employees making over $100,000 (if applicable)
- For sole proprietorships, independent contractors, self-employed individuals, and single-member LLCs:
- Color copy of government-issued ID (front and back)
- 2019 1040 Schedule C
- 2019 IRS Form W-3
- 2019 IRS Form 940
- W-2s for employees earning more than $100,000 (if applicable)
- Payroll statement covering 2/15/2020
- Substantiation of self-employment (e.g., 1099-MISC for independent contractors)
- 2020 invoice, bank statement, or book of record to establish operation as of 2/15/2020
Businesses that have not completed the 1040 Schedule C for 2019 must fill it out and compute the value for line 31. Businesses with a line 31 value of less than $2,400 are not eligible for a PPP loan.
Once a business has gathered the necessary documentation, it can apply for a PPP loan through a participating lender. The lender will review the application and documentation and make a decision on whether to approve the loan.
If the loan is approved, the business will receive the funds and can begin using them to cover eligible expenses. The loan can be forgiven if the business meets certain requirements, such as maintaining its payroll and using the funds for eligible expenses.
The PPP is a valuable resource for small businesses that have been impacted by COVID-19. Businesses that meet the eligibility criteria should consider applying for a PPP loan to help them weather the storm.
Additional Resources
PPP Breakdown For FIRST Time Applicants | EVERYTHING YOU NEED TO KNOW
FAQ
What documentation is required for PPP loan?
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All businesses of this type should provide the following
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Color copy of government issued ID (front and back) Organizational Documents* 2019 IRS Form W-3 2019 IRS Form 940
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If you have employees outside the US
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W-2s for employees living abroad
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What were the requirements for the first PPP loan?
Who is not eligible for a PPP loan?
How do I apply for a Paycheck Protection Program (PPP) loan?
The Small Business Administration (SBA) closed the Paycheck Protection program (PPP) to new applications on May 31, 2021. If you had previously received a PPP and are interested in applying for forgiveness, you can do so online at the SBA PPP Direct Forgiveness Portal . What are Paycheck Protection Program (PPP) Loans?
Do borrowers have to certify a PPP loan request?
Although the CARES Act suspends the ordinary requirement that borrowers must be unable to obtain credit elsewhere (as defined in section 3(h) of the Small Business Act), borrowers still must certify in good faith that their PPP loan request is necessary.
How do I determine eligibility for a PPP loan?
Answer: In addition to reviewing applicable affiliation rules to determine eligibility, all borrowers must assess their economic need for a PPP loan under the standard established by the CARES Act and the PPP regulations at the time of the loan application.
How do I apply for a PPP loan?
Business owners need to fill out a PPP loan application — SBA Form 2483 for first-draw loans and SBA Form 2483-SD for second-draw loans — and gather all supporting documents. You can apply for a new PPP loan through any participating lender.