PPP Loan 2024 Application: Everything You Need to Know

The PPP Loan 2024 application process is now open, and businesses can start applying for the loan. The application process is relatively straightforward.

To be eligible for a PPP loan, your business must have been in operation on February 15, 2020, or before, and must have experienced a 25% reduction in gross receipts compared to the same period in 2019.

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To be eligible for PPP loan forgiveness, the amount of funding you received is equal to 2.5 times your average monthly payroll cost for 2019 or $10 million, whichever is lower.

If you received a loan of $50,000 or less, you'll be eligible for full forgiveness, even if you reduced your FTE employee count or reduced employee wages or salaries.

The PPP loan can be used for payroll costs, mortgage interest, rent, and utilities, which include electricity, gas, water, transportation, phone services, or internet access.

You can pay for mortgage interest as long as you signed your mortgage before Feb. 15, 2020, and rent as long as you signed your lease before Feb. 15, 2020.

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To apply for forgiveness, you'll need to download the application from sba.gov and fill it out yourself after your coverage period is up.

You'll need to collect documents that verify your mortgage, utility, or rent payments, as well as verification of the number of full-time employees on the payroll, and their wage rates.

Your lender must respond with a forgiveness determination within 60 days of receiving your PPP forgiveness application form.

If you received a loan of $50,000 or less, you're eligible for full forgiveness, even if you reduced your FTE employee count or reduced employee wages or salaries.

To qualify for forgiveness, you'll still need to meet the other forgiveness criteria, but you can skip the complicated calculations around FTE employees and payroll expenses.

The CARES Act specifies that you can use PPP funds for utilities, including electricity, gas, water, transportation, phone services, or internet access, as long as your services began before February 15, 2020.

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You can also use PPP funds for mortgage interest, rent, and payroll costs, including wages, salaries, PTO, and health benefits, as long as you meet the eligibility criteria.

Here's a quick rundown of what you can use PPP funds for:

The forgiveness rules can be a bit complex, but don't worry, I've got you covered. If you received a loan of $50,000 or less, you're eligible for full forgiveness, even if you reduced your FTE employee count or reduced employee wages or salaries.

To qualify for full forgiveness, you must meet the other forgiveness criteria and use at least 60% of the funding on payroll costs. This is a change from the initial 75% rule, and you can't include payments to independent contractors in this percentage.

You can still receive some forgiveness if you don't follow these rules, but the amount will reduce in proportion to the percentage you did spend on payroll. The remaining percentage can be used for other eligible expenses, such as mortgage interest, rent, and utilities.

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Here are the eligible expenses for PPP loan forgiveness:

Keep in mind that you'll need to provide documentation to support your forgiveness application, including verification of your payroll and expenses.

To take advantage of forgiveness options and stay on top of your loan, you need to take a few key steps. Verify your loan status, especially if you're a PPP borrower, and apply for forgiveness if necessary.

PPP borrowers, in particular, should prioritize this step to avoid any potential issues. Update your contact information with the SBA to ensure you receive all crucial communications.

Here are the steps to take:

Acting before the March 3 deadline is crucial to avoid referral for collection to the Treasury, which could lead to significant long-term financial problems.

To start your PPP loan application, you'll need to log into your Lendio account or create a new one. This is the first step in getting started with the PPP application process.

Once you're logged in, confirm whether you're applying for your first or second PPP loan. This will help guide you through the application process.

Before resubmitting your PPP application, make sure to review the necessary steps to ensure a smooth process.

To log in, start by accessing your Lendio account. You can do this by creating a new account or logging into your existing one.

Before you can proceed with your application, confirm whether you're applying for your first or second PPP loan. This step is crucial before resubmitting your application.

You'll need to log into your PPP Application to move forward. This will bring you to a page where you can confirm your loan application status.

After logging in, you'll be able to access your PPP application and make any necessary changes.

You can apply for a PPP loan as a self-employed individual once applications open for the 1,800 qualified SBA lenders.

Keep an eye out on BILL's PPP loan hub for a link to the application once it becomes available.

The SBA has clarified the application process for self-employed individuals, freelancers, and 1099 contractors, making it easier to navigate the process.

To qualify, self-employed small business owners must file a Form 1040 Schedule C, which requires a unique layer of calculation for payroll.

Self-employed individuals without employees can follow these steps to determine their PPP loan amount: Find or complete your Form 1040, Schedule C.

Locate your net profit on line 31 and cap any net profit over $100,000.

Divide this total by 12 to find your average monthly net profit.

Multiply by 2.5 to determine the PPP loan amount to request, covering 2.5 months of average profits.

Gather documentation to substantiate this income, including 2019 IRS Form 1099-MISC, invoices, or bank statements.

Here's a quick breakdown of the calculation process:

Remember, every situation is unique, so be sure to read the Treasury Department's full interim final rule explanation with your financial and legal teams to determine what it means specifically for your business before you apply.

As you navigate the application process, you'll reach a crucial step: uploading or confirming your documents. This is where you'll need to ensure everything is in order.

You'll need to upload a color copy of the front and back of a valid Driver's License for each owner with a 20%+ share in the business. Double-check that the Driver's License is not expired.

If you're missing any of the following attachments, you'll need to upload them: Driver's License for all owners with 20%+ share in the business, and Acceptable Payroll Documents (listed in order of the SBA's seeming preference).

Here are the specific documents you'll need to upload:

Once you've uploaded or confirmed your documents, you'll receive an email assigning you a PLP number (preferred lending partner number). This means you'll be in the U.S. Small Business Administration's loan system, and the lender that accepted your application will be the only one who can make you a PPP loan.

Make sure your business information is accurate and complete to avoid any delays in your PPP loan application. Confirm that your business address is correct, including the 5-digit zip code.

Verify that you've selected the right business type, as this affects the documents you may need to provide. For example, if you're a sole proprietor or 1099 worker, you should enter 1 as your employee count.

When entering your Business Tax ID, double-check that it's a valid 9-digit number and not a 5-digit zip code. Also, ensure that your loan amount requested is 2.5 times your average monthly payroll costs, and not $0 or hundreds of millions of dollars.

In Step 2, you'll be adding or confirming existing business information. This is a crucial step, so make sure everything is fully filled in.

First, verify that your business address is accurate, including the 5-digit zip code. This is important, as using the 9-digit zip code can cause issues.

Your business type is also critical, as it determines the documents you may need to provide. Take a moment to ensure you've selected the right business type.

Next, double-check your business Tax ID. It should be a 9-digit number, and you should enter it carefully to avoid typos.

Don't forget to enter your loan amount requested, which should be 2.5 times your average monthly payroll costs. You can use our PPP loan calculator to help with this calculation, and remember that the amount should not be $0 or hundreds of millions of dollars.

Finally, verify your employee count. This should be between 1 and 500, with sole proprietors and 1099 workers entering 1. A count of 0 is not valid.

Here are the key details to keep in mind for this step:

Partnerships have unique considerations when it comes to PPP loans. A partnership can only have one PPP loan application, and partners cannot submit separate applications as self-employed individuals.

According to the Interim Final Rule, this limitation is necessary to ensure that as many eligible borrowers as possible obtain PPP loans before the statutory deadline of June 30, 2020.

To confirm ownership in a partnership, you'll need to check if anyone owns a 20% or larger stake in the business. If so, you'll need to enter the owner's percentage and add any additional owners with 20% ownership.

If no one owns a 20% stake in the business, you'll need to indicate and confirm that you're authorized to fill out the PPP application on behalf of the business.

Here's a quick rundown of the required documents for partnerships:

Note that you'll need to upload these documents or confirm that everything previously uploaded is correct to ensure a completed PPP application.

If you're a self-employed individual, you'll need to follow a specific process to apply for a PPP loan. The SBA has clarified the application process for self-employed individuals, freelancers, and 1099 contractors.

To start, you'll need to find or complete your Form 1040, Schedule C. This form will help you calculate your net profit, which is used to determine the amount of your PPP loan.

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The maximum annualized income for PPP loans is $100,000, so if your net profit exceeds this amount, you'll need to cap it for the calculation. To find your average monthly net profit, divide your total net profit by 12.

The PPP loan amount you can request is determined by multiplying your average monthly net profit by 2.5. This will cover 2.5 months of average profits, also known as "payroll", for your self-employed business.

To gather documentation to substantiate your income, you'll need to provide 2019 IRS Form 1099-MISC detailing non-employee compensation received (box 7), an invoice, or a bank statement showing self-employment. You'll also need a 2020 invoice or bank statement covering February 15, 2020, at the latest.

Here's a step-by-step guide to calculating your PPP loan amount:

The PPP loan forgiveness process for self-employed individuals is similar to that for other borrowers. However, the rules may limit the amount forgiven due to the lower overhead costs associated with self-employment.

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The Paycheck Protection Program (PPP) loan terms are quite straightforward. First time applicants may borrow up to $10 million or 2.5 times their average monthly payroll costs, whichever is less.

For second time applicants, the max borrowing amount is capped at $2 million or 2.5 times their average monthly payroll costs, also whichever is less. The loan term is 2 years, and interest rates are a fixed 1%.

You'll also get a 6-month deferment on payments, though keep in mind that interest will still accrue during that time. This can be helpful for businesses that need some extra time to get back on their feet.

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When applying for a PPP loan in 2024, it's essential to understand how the funds can be used and what restrictions are in place. You can use your PPP funds for employee payroll or replacing owner compensation, mortgage interest, rent, utilities, debt interest, and upgrades to your business, such as installing plastic sneeze guards or drive-through windows.

To qualify for these expenses, ensure you're using the funds for legitimate business purposes. Some examples of approved expenses include employee payroll or replacing owner compensation, which can help you keep your business running during the pandemic.

You should avoid using PPP funds for certain expenses, including buying new equipment or property, mortgage payments (principal), and other debt payments. Be cautious not to use more than 25% of your PPP on non-payroll costs, as this is also prohibited.

Here's a summary of approved and restricted expenses:

You can use your PPP funds for employee payroll or replacing owner compensation, which is a huge relief for many business owners. This can help ensure that your employees receive their regular paychecks during this challenging time.

Mortgage interest and rent are also eligible expenses, which can help you cover essential costs. Utilities and debt interest are also on the list, so be sure to review your business's expenses to see where you can apply these funds.

Upgrades to your business, such as installing plastic sneeze guards or drive-through windows, are also allowed. This can help you adapt to changing circumstances and keep your business running smoothly.

Here are some specific examples of what you can use your PPP funds for:

However, there are some restrictions to keep in mind. You can't use PPP funds to buy new equipment or property, which can be a bummer if you've been eyeing some new gear.

Mortgage payments (principal) are also not eligible, so be sure to review your loan terms to understand what's covered. Additionally, any expenses that you can't claim on your Form 1040 Schedule C are also off-limits.

You can't use more than 25% of your PPP funds on non-payroll costs, which can help you stay focused on what really matters.

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To qualify for a Second Draw, you'll need to demonstrate a significant revenue reduction. This means you'll have to show at least a 25% drop in revenue compared to the previous year.

You'll need to gather financial data from 2019 and 2020, including your Gross Receipts for each quarter. This will help you calculate the revenue reduction.

To calculate the revenue reduction, you'll need to enter your Expenses for each quarter of 2019 and 2020 as well. This will give you a clear picture of your financial situation.

Once you've entered the required information, you'll be able to verify it and click "Next." This will generate a financial statement that meets the SBA's requirements.

The application process also requires you to confirm your personal details, including your full legal name and Social Security number. Make sure to enter these correctly to avoid any issues.

Here's a summary of the required financial information: