What Do You Need for a PPP Loan?

If you’re a small business owner, you may be wondering what you need to apply for a PPP loan . Here’s a quick overview of the requirements.

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Applying for a PPP Loan

The Paycheck Protection Program (PPP) loan is a loan designed to help small businesses keep their workers employed during the COVID-19 pandemic. The loan is 100% guaranteed by the Small Business Administration (SBA) and can be forgiven if used for payroll and other eligible expenses. If you’re thinking about applying for a PPP loan, here’s what you need to know.

Find a lender

To apply for a PPP loan, you’ll need to find a small business lender that’s participating in the program. The SBA has a searchable list of all the lenders that are participating in the PPP.

Be sure to shop around before you choose a lender. Each lender has different requirements for how much paperwork you’ll need to provide and how long it will take to process your loan.

Gather required documents

In order to apply for a Paycheck Protection Program (PPP) loan, you will need to gather a few required documents. The Small Business Administration (SBA) will need to see evidence that you:
-Are a small business owner
-Have employees on your payroll
-Can demonstrate financial need

The SBA will also need to see your most recent tax returns and bank statements in order to verify your business income and expenses. If you are self-employed, you will need to provide additional documentation, such as profit and loss statements.

Once you have gathered all of the required documents, you will be able to fill out the online application on the SBA website.

Submit your application

You will need to submit your application through the Small Business Administration (SBA) website. The SBA has an online PPP Forgiveness Platform that you will use to apply for forgiveness.

To complete your application, you will need to gather the following documents:
-Your PPP loan forgiveness application
-A completed IRS Form 4506-T, giving the SBA permission to request tax return information from the IRS
-Documentation supporting your PPP loan forgiveness amount, including payroll reports, bank statements, and payment receipts
-Your most recent tax return

You will also need to certify that:
-You have used the loan proceeds for eligible expenses
-You have not laid off or reduced the salaries or wages of any employees (unless you have restored them by the end of the covered period)
-You are not subject to any pending litigation related to unfair labor practices or violations of wage and hour laws

What Do You Need for a PPP Loan?

Basic requirements

In order to qualify for a Paycheck Protection Program (PPP) loan, your small business must:

– Have been in operation on February 15, 2020
– Have paid employees who live in the United States
– Have paid employee salaries and payroll taxes

In addition, your small business must also:

– Be a for-profit business, a 501(c)(3) nonprofit organization, a 504 corporation, or a veteran’s organization
– Have fewer than 500 employees

.1 You must be in business as of February 15, 2020

To qualify for a PPP Loan, you must have been in business as of February 15, 2020. This means that you must have had payroll or paid independent contractors during that time. If you are a new business, you are not eligible for a PPP Loan.

.2 You must have paid employees

In order to qualify for a PPP loan, you must have paid employees. This is generally evidenced by payroll tax filings.

.3 You must have used or will use the loan for payroll costs, mortgage interest, rent, and utilities

In order to qualify for a PPP loan, you must have used or will use the loan for payroll costs, mortgage interest, rent, and utilities. Payroll costs include salaries, wages, tips, paid leave, severance pay, health insurance premiums, and retirement benefits. You can find more information on what constitutes payroll costs here.

Mortgage interest includes interest on loans used to purchase real estate that is leased or rented to your business. This can include real estate used for business purposes such as office space or retail space.

Rent includes payments made under leases and service contracts for real estate rented or leased by your business. Utilities includes payments made for electricity, gas, water, transportation, telephone, and internet service.

You can find more information on what qualifies as eligible expenses here.

Eligibility requirements

To be eligible for a PPP loan, you must:

-Have been in business for at least 2 years
-Have a good credit history
-Show that you have lost revenue due to COVID-19

.1 Your business must have fewer than 500 employees

To qualify for a PPP loan, your business must employ fewer than 500 people. This includes full-time, part-time, and seasonal employees. If your business is part of a larger group of businesses that400 employees or fewer per physical location, you may still be eligible for a PPP loan.

In addition to employing 500 people or fewer, your business must also fit into one of the following categories:
-A business that operates as a sole proprietorship
-An independent contractor
-A self-employed individual
-A private non-profit organization
-A small business concern

.2 Your business must be for-profit

To qualify for a PPP loan, your business must be for-profit. This means that your business must be organized as a:

Sole proprietorship
Partnership
Corporation
Limited liability company (LLC)
The business must also have employees. The number of employees will determine the size of the loan you’re eligible for.

.3 Your business must be based in the United States

To qualify for a PPP loan, your business must be based in the United States. That means that businesses with foreign branches or operations will not be able to receive a PPP loan.

Documentation requirements

The SBA’s list of required documentation for PPP loan applicants has six items. You’ll need to provide:

– personal information, such as your name, address and Social Security number
– business information, such as your business name, address, type of entity and EIN
– an explanation of how you will use the loan proceeds
– your loan amount request
– your bank account information
– your authorization to submit the application

.1 Payroll documentation

In order to qualify for a PPP loan, you will need to provide documentation of your payroll expenses. This can include:

-Payroll reports from your accounting software
-W-2 forms for your employees
– 1099 forms for any independent contractors you have
– A schedule of your employee compensation
– bank statements or cancelled checks showing payroll expenses

.2 Tax documents

To complete your PPP loan application, you’ll need to provide:

– Your most recent tax return
– Documentation of any untaxed income, such as child support or alimony
– Documentation of other debts, such as student loans or business debts

.3 Mortgage, lease, and utility documents

In order to apply for a PPP loan, you will need to provide evidence of your monthly mortgage, lease, and utility payments. You can do this by providing copies of your most recent bank statements or by providing a cancelled check for each of these payments.